FTC's McSweeny points to rising cost of identity theft

As data breaches become more prevalent, so does the resulting identity theft and fraud, which can take years for a victim to resolve.

“Identity theft is really ‘the crime’ of our interconnected technological world,” Terrell McSweeny, a Federal Trade Commission commissioner, said Wednesday, adding that the financial losses “are staggering.”

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McSweeny spoke at an Identity Theft Resource Center (ITRC) event, where she reiterated the FTC’s call for data security and breach notification laws to establish a federal notification standard and enhance the agency's authority to bring enforcement against breached companies.

The ITRC, backed by companies like Google and Qualcomm, said it was, as of Wednesday, monitoring more data breaches in 2014 than it had in all of 2013.

And the victims of those breaches are seeing lingering financial harm, the ITRC said.

According to a survey of identity theft victims with whom the organization worked last year, 61 percent had new accounts opened in their name, while 43 percent had information used for a lease or insurance scams.

Many didn’t even know about the theft until more than a year later.

“That is why the FTC supports comprehensive data security and breach notification legislation,” McSweeny said. “National standards would simplify compliance for businesses, while also giving consumers greater security.”

Almost 40 percent had their information used to fraud the government. Just over half of those whose info was used for tax fraud have yet to get a full refund.

More broadly, the survey noted more than half of ID theft victims had yet to rectify their financial woes fully. A third of people’s credit scores hadn’t been restored and a fifth were still getting calls from collection agencies.

“Too often, people feel that they must face the daunting challenges of protecting their financial life, repairing their credit, and dealing with creditors and financial institutions alone,” McSweeny said.

McSweeny talked up the White House’s recent executive order to transition all government payment cards to chip-and-PIN cards, which use two-factor authentication and encryption to protect the user’s information.

The order also tasked the FTC and other agencies with revamping IdentityTheft.gov into “a more functional clearinghouse for the combined resources of the federal government," McSweeny said.

The FTC is also working with credit bureaus to ease the reporting and remediation process for identity theft victims.

The efforts show “the best way to combat identity theft is a vigorous and energetic public and private partnership,” McSweeny said.

—This report was updated on Oct. 30 at 7:26 a.m.