Identity theft complaints high and rising

Complaints about identity theft have risen 73 percent from a year ago, according to a new report from the Federal Trade Commission.

Identity theft topped the list of consumer complaints in 2002, accounting for 43 percent of all complaints, the FTC said Wednesday. While people should be careful about safeguarding their personal information from casual thieves, some of the identity theft is coming from inside sources, said Howard Beales III, director of the FTC's Bureau of Consumer Protection.

"What we're seeing increasingly is ID theft that occurred because some insider sees information and steals it from a company. It may be an ID list or a customer list. And there's very little a consumer can do to prevent that," he said.

The complaints are gathered by the FTC's Consumer Sentinel program, which combines data from several sources, including the Social Security Administration, the Internet Fraud Center and the National Consumer League. Some of the rise in complaints may be attributed to the program's having added new partners and to increased media attention to the FTC's complaints program, Beales said.

Internet auctions were the second-highest problem category, accounting for 13 percent of consumer complaints, up from 10 percent in 2001. Reports of problems with Internet services and computers--which include being unable to cancel Internet service provider (ISP) accounts and malfunctioning PC equipment--accounted for 6 percent of complaints, down from 7 percent last year.

Even if such complaints didn't directly involve an Internet service, odds are the Net was involved. Of the complaints that didn't concern identity theft, about half had some relation to Internet--such as problems arising from solicitations in e-mail or Web ads, for instance.

"It's clear that the growth of the Internet has changed the kinds of fraud that appear," Beales said at a press conference. "There are kinds of frauds that were virtually dead that the Internet has brought back, because it's so easy to contact large numbers of people--chain letters are an example. But we don't have any evidence that it's changed the total amount of fraud, just changed the channels (that fraudsters) reach people through."