Stolen credit cards tip of iceberg in escalating crime of identity theft

“I call it ‘the perfect crime,’ because unless the guys get greedy,” identity thieves get away clean, said Mel Rapozo.

The county councilmember is also a private investigator who knows of lots of people on Kaua‘i who have been victims of identity theft.

And damage identity thieves do to the good name and good credit of victims goes way beyond what the thieves can rack up on credit cards before the real owners report them lost or stolen, Rapozo said.

Monthly credit-card statements show fraud immediately, allowing theft victims to immediately dispute charges, he explained.

But with a victim’s name, address and Social Security number, identity thieves create whole new credit accounts and lines of credit, and the unsuspecting victim doesn’t even know these new accounts exist until the accounts go into default and collection agencies and credit companies come calling on the unknowing victim, Rapozo said.

Then, the burden of proof that the victim didn’t buy that new car, take a cruise, rack up six-digit debts in Vegas, falls on the victim, he said.

By this time, damage to the victim’s credit rating has already been done. “Restoring your credit takes a lot of time and money,” said Rapozo, who leads an identity theft seminar this Thursday, April 8, from 8:30 a.m. to 11 a.m. in the Ali‘i Room of the Aloha Beach Resort in Wailua.

The registration deadline is today, Tuesday, April 6. The Kaua‘i Chamber of Commerce sponsors the event. Please call 245-7363 for more information on the seminar.

Hawai‘i, unfortunately, ranks high among the states in terms of per-capita identity theft, Rapozo said.

“Protecting your personal information” is the most important defense against identity theft, he said.

“The key is to keep your personal information away from the bad guys,” said Rapozo.

“These ID thieves are good,” said Rapozo. On O‘ahu, the bad guys sell personal information to other bad guys for $1,500 per person, allowing the thieves to easily generate $100,000 or more in debt in the unsuspecting victim’s name, he said.

The young and old are favorite targets, he continued.

He has talked to people on Kaua‘i who have said their homes were broken into, but thieves didn’t take anything despite the fact that cash and other valuables were in plain view.

But they did take something, Rapozo warns them. The thieves took information that will be used to steal their good credit and identities.

“It’s scary,” he said.

There are some immediate steps people can take to prevent identity theft, he said:

• Use initials instead of full names on checks and credit cards (thieves won’t know how you sign your name);
• Don’t ever put Social Security numbers on checks;
• Use another password or key identifying fact instead of mother’s maiden name (the most common).

  A corporate lawyer, the victim of ID fraud after his wallet was stolen, adds these tips:

• Besides immediately filing a police report (this will show diligence to credit-card and insurance companies), also immediately call the three national credit-reporting organizations to place a fraud alert on your name and Social Security number. The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit. Unfortunately for the attorney, by the time he was advised to do this “all the damage had been done.” But it prevented further fraud;
• Use a work telephone number instead of home phone number on checks, and a post-office-box address instead of street address if you have one;
• Photo copy the cards in wallets or purses, both sides of each card, license or other important document, and keep the photo copy in a safe place;
• Have also in a safe place the toll-free numbers for credit-card companies and credit-reporting agencies.

Within a week after the attorney’s wallet was stolen, the thief had ordered an expensive monthly cell-phone package, applied for a credit card, had a credit line approved to buy a computer, received a personal identification number to change his driving-record information online, and done even more damage.

Closer to home, a Kaua‘i resident who did not wish to be named had her identity stolen, and thieves used her credit card to order jewelry from TV shopping channels. Police told her it was done on O‘ahu, probably with the intent of pawning the merchandise to buy drugs.

“I did not have to pay for any of the fraudulent purchases, but it was a real pain getting it all cleared up,” she said.

The next month, her other credit card was hit.

Along the way, she learned from West-Coast friends that many Californians have been experiencing big problems with credit cards used in restaurants.

It turns out wait staff were being paid $10 for each credit-card number they scanned with a little device they kept in their aprons. The ring leaders then ran up huge bills on the credit cards, again mostly for jewelry. Police there urge restaurant patrons to pay cash and keep receipts.

Rapozo said bank employees have supplemented their incomes by selling personal information on account-holders, and on O‘ahu an employee at an athletic club was doing the same thing, but was caught before he could do substantial damage.

Associate Editor Paul C. Curtis may be reached at 245-3681 (ext. 224) or pcurtis@pulitzer.net.