(Consumer News) - Identity theft has been the No. 1 complaint filed with the Federal Trade Commission for eight years in a row, with an estimated 9 million victims each year. And while recovering from identity theft has never been an easy task, a new survey indicates that the current economic conditions have made the challenge even greater.

Nearly half of respondents indicated that, if their identity were stolen today, they were unsure whether they had enough money saved to manage the recovery process. Ten percent of identity theft victims polled said they missed bill payments as a result of the crime. Of that group, four out of five experienced serious consequences--including credit score decrease, utilities shutoff, vehicle repossession, home foreclosure, bankruptcy and, in some instances, even jail time.

Taking Steps

On the positive side, the poll found nine out of 10 people are taking at least one action to protect themselves. Products like help to give you peace of mind. Another great way to protect your credit is to sign up for credit monitoring services such as those provided by LifeLockand freecreditreport.com. Other ways include regular checks of bank and other financial statements, shredding of important documents and limiting the number of credit cards used. Increased use of credit and debit cards has given identity thieves more opportunities.With so many Americans losing their savings and investments, people have less money to fall back on during the time it takes to stop the bleeding. If the identity theft involves your credit cards, you can often resolve the problems quickly. However, if the fraud involves a debit card, a loan or your health insurance, the impact can be time consuming and costly.

About The Survey

The survey is the third in a series conducted by Nationwide to better understand identity theft and the impact it has on its victims. The poll found that victims of identity theft tend to be Caucasian, female, ages 35-54, college educated, married and employed full-time. Individuals who are separated or divorced and those making $75,000 or more a year also have a greater vulnerability to identity theft.

In addition to the financial toll, identity theft can result in other serious repercussions--including family problems and missed time at work. It is a crime where the victim is generally presumed guilty until proven innocent.

LifeLock, the leader in identity theft protection, works proactively to help protect your identity – even if your information falls into the wrong hands. As a LifeLock member, if you become a victim of identity theft because of a failure in their service, they'll help fix it at their expense, up to $1,000,000. (Restrictions apply. See LifeLock.com for details.)

Signup to Fight ID Thieves With LifeLock. Enroll Now.

 New Government Report Admits the IRS is Unaware of most ID Theft Fraud Related Tax Refunds

Is someone spending YOUR tax refund?

***Actual Government Report Excerpt***

Date: September 8, 2009

From:James R. White Director, Tax Issues Strategic Issues Team

U.S. Government Accountability Office


Identity theft is a serious and growing problem in the United States. According to the Federal Trade Commission (FTC), millions of people have been victims of the crime, some of whom may go years without knowing it. The crime takes many forms; identity thieves may obtain a credit card, rent an apartment, or establish a telephone account in the theft victim’s name. The victim may not find out about the theft until being contacted by a debt collector, losing out on a job opportunity, or being denied a loan. Identity theft creates two main problems for taxpayers and IRS.

#1 Identity Theft Protection

A taxpayer may have his or her tax refund delayed if an identity thief files a fraudulent tax return seeking a refund using the legitimate taxpayer’s name and Social Security number (SSN). In addition, a taxpayer may become subject to Internal Revenue Service (IRS) enforcement actions after someone else uses his or her identity to fraudulently obtain employment and the identity thief’s income is reported to IRS by an employer on a Form W-2 (Wage and Tax Statement) or Form 1099 information returns in his or her name.

As already noted, identity theft most commonly becomes a tax administration problem for victims and IRS in two primary ways. First, an identity thief may use a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund during the filing season. In these cases, the identity thief typically uses a stolen SSN to file a forged tax return and obtain a refund early in the filing season. The legitimate owner of the SSN may not be aware that this has occurred until he or she files a tax return later in the filing season and IRS discovers that two returns have been filed using the same SSN. In this instance, the legitimate taxpayer’s refund will likely be frozen until IRS can determine the legitimate owner of the SSN.

The second way that identity theft becomes a problem for taxpayers and for IRS is through employment fraud. This occurs when an identity thief uses someone else’s name and SSN to obtain a job. In this instance, IRS would receive a Form W-2 or a Form 1099 reporting income on the taxpayer’s account, which the rightful owner of the SSN had not earned and does not report as income to IRS. As a result, the taxpayer may be subject to enforcement action when, during the filing process, IRS matches what the employer and the taxpayer report and it appears that he or she earned more income than was reported on his or her tax return.

In a related type of case, an identity thief uses just the SSN of a legitimate taxpayer and the thief’s own or a made up name. This also creates tax administration problems (as well as problems for the Social Security Administration) because the same SSN is now associated with multiple names.The name and SSN information used by identity thieves to commit refund or employment fraud are typically stolen from sources beyond the control of IRS. In many cases, the source of the stolen information is unknown. 


Get Identity Protection. Don't allow thieves to use your information. LifeLock helps you. Enroll Now.

Excerpted from: Government Accountability Office September 2009
 Read the entire report here: http://www.gao.gov/new.items/d09882.pdf