Making a fresh start after identity theft

The Wall Street Journal

As companies roll out a growing variety of tools to combat identity theft, some Americans are taking a more radical step: changing their Social Security number.

Traditionally, trading in an old number for a new one is something attempted in only the most extreme circumstances. Not only does the Social Security Administration demand heavy, documented proof of hardship -- but it also means that an individual must then track down every bank, utility, credit-card association and government agency that might have the old number on file, and persuade them to use the new one.

Despite the obstacles, in the 11-month period ended in March, roughly 1,000 people were issued new Social Security numbers for reasons of identity theft. While the Social Security Administration started keeping statistics on the specific reasons people are issued new numbers only last year, consumer advocates expect the number of identity-theft-related requests to increase. Last year, the agency received 75,000 allegations of Social Security number "misuse," up from just 11,000 in 1998.

Social Security numbers can be particularly valuable assets in the hands of a criminal. With little more than a valid Social Security number and street address, a thief can often fraudulently open credit-card accounts or apply for loans in someone else's name, severely damaging his credit record.

People who change their number are hoping not only to cut off their assailant, but also to make a fresh start with a clean credit history. Many people, though, are frustrated to discover that it doesn't solve their problems. In fact, some privacy advocates, government officials and consumers who have been through the ordeal warn that it can actually make matters worse in some circumstances.

Identity theft affects nearly 5 percent of the adult population, according to the Federal Trade Commission, costing businesses and individuals a combined $53 billion annually. Last year, the FTC received 246,000 reports of identity theft, nearly triple the number received in 2001.

Concern is particularly high right now following a spate of recent security breaches, which compromised the data records of some 50 million people and left many more wondering whether they were affected. The scandals have implicated institutions ranging from ChoicePoint Inc., a data broker, to Bank of America Corp., to the University of California at Berkeley.

People who have gotten new Social Security numbers report mixed results. Scott Lewis, an X-ray technician from Wintersville, Ohio, changed his number a few years ago to untangle his identity from a repeat drunken-driving offender who at one point faced murder charges.

Lewis first noticed a problem during a job search: Several times he was told he was a top candidate for a job, but then would never hear back. Finally, "one manager picked up the phone and said, 'You're an unsavory character, don't ever call here again,'" Lewis says. He did a background check on himself and discovered that, because of a clerical error -- a sheriff's office in Ohio had mistyped the arrested man's Social Security number, putting in Scott Lewis's instead -- his identity was being confused.

At the advice of a prosecutor, he got the SSA to change his number. "That was the beginning of a big mistake," he says. "By doing that, I now had no credit history, so I can't get credit, and it appears that I'm using a fraudulent Social Security number."

Even people who have had more success offer warnings. Ted Wern, a 30-year-old corporate attorney in Chicago, changed his number in 2000 after someone started impersonating him and racked up large charges on credit cards. After years of effort, he persuaded credit-card companies and other organizations to start using his new number. Wern calls his decision "a success, but a rarity," and says the move makes more sense for young victims who haven't built up lengthy credit records.

Currently, there are several bills in Congress designed to give individuals more control over their personal information. Among them is a proposal from Senate Judiciary Chairman Arlen Specter of Pennsylvania and ranking Democrat Patrick Leahy of Vermont that would restrict the sale of Social Security numbers by companies that buy and sell lists of personal data. The proposal would require that consumers be able to obtain copies of files that these so-called data brokers have on file for them.

Changing a Social Security number starts with a trip to one of the Social Security Administration's 1,300 branches. Applicants must demonstrate a relentless pattern of abuse at the hands of identity thieves, prove that they've already taken the usual steps to combat it -- contacting creditors and law enforcement, working with credit bureaus and the FTC -- and show that "economic or personal hardship" persists.

Though the SSA doesn't track an acceptance rate, more applications are denied than accepted. "It's not just because you were a victim of identity theft; you have to meet a higher standard." says Mark Lassiter, an SSA spokesman.

Getting approved for a new number can take months. Only then can the process of tracking down creditors and others begin. People who have been through it say this is a fitful process, since banks, credit-card issuers, auto dealerships and others vary widely in their reaction to such an unusual request. In addition, some may work with all three major credit bureaus, Equifax Inc., TransUnion LLC, and Experian, a unit of GUS PLC, but others may work with only one, creating more snafus. Once a new number is in use, consumers must work separately with each of the credit-reporting agencies to dispute credit filings using the old number.

In addition, when a new number is assigned, the SSA doesn't delete the old one. Instead, it links the two numbers, because it needs both to compute benefits when a person retires. That means when a potential employer, landlord or bank looks at the victim's credit report, they see a clean record linked to a troubled one. It raises flags, and a victim may have even more explaining to do.

"It looks kind of suspicious," says Fritz Streckewald, an assistant deputy commissioner of the SSA. "There's nothing in our system that would automatically tell a credit bureau, 'Oh, this is a new number we issued because the person was a victim of identity theft.'"

The agency changes numbers in other rare circumstances, such as when two people are mistakenly assigned the same number. Victims of domestic violence get consideration, too, as well as individuals who request a new number on religious grounds. For example, the SSA would consider changing a number if it contained an objectionable series like "666."

Wrong number

Some identity-theft victims change their Social Security number, but it's a tough task:

  • Experts advise against it in most cases, saying it creates new problems, extra work and lots of explaining to banks and other institutions.
  • Changing numbers isn't easy; considerable evidence is required to persuade the government you really need it.
  • Even if you get a new number, the old one won't be deleted.
  • Getting creditors to use the new number is a significant hassle that can take years.


Citi Credit Monitoring Service

Owned by: Citibank N.A.

Cost: $9.95 a month; 30-day free trial

Services: Monitors Equifax credit report, daily alerts; identity-theft insurance.

Equifax Credit Watch Gold

Owned by: Equifax

Cost: $129.95 a year

Services: Monitors reports by all three bureaus, daily alerts; no deductible identity-theft insurance.

Identity Guard

Owned by: Intersections Inc.

Cost: $25.95 a month for 3 months, then $12.99 a month

Services: Monitors reports by all three bureaus, sends daily alerts; $20,000 identity theft insurance after $250 deductible.

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