Welcome to the Neighborhood – Identity Theft Targets Movers

In 2000, we moved the family to Houston to start up a company. The move went smoothly, larger house, lower cost per square foot, nice neighborhood, all was good.

About 90 days after moving in, one Friday, I picked up the mail and much to my surprise, opened a bill from a regional department store credit card account for nearly $1,300. I will have to admit that my tone may have been a bit accusatory when I raised the issue with my wife – “What the #*@&%! did you buy at Palais Royale for $1,300, and while you’re at it, what the #*@&%! IS a Palais Royale, and why the #*@&%! did you open a store account???

She denied any knowledge of the purchase, but did know of the store. Very suspicious, I thought, immediately presuming her guilt and figuring after 15 years of marriage, I had just uncovered the tip of the iceberg…

As the store’s credit department was closed, I mercifully agreed to postpone her sentencing until the issue could be resolved on Monday.

Saturday afternoon, my wife picked up the mail and came storming into my home office. “You have no room to talk when you go out and burn through $6,000 on a Home Depot credit card! She obviously did not realize that my failing to consult her before spending $6K at Home Depot was beyond any reasonable realm of possibility. Making such a crass insinuation was downright insulting…

I cam home early Monday afternoon so we could call the merchants. I stopped at he mailbox and opened a Lowe’s Home Center charge account statement for another $6,000. No more of the mistrusting he said / she said game. We had a problem.

The first call was to the department store. We both swore that neither of us had ever set foot in the store. The credit department clerk was not willing to make a quick journal entry and make the problem go away – apparently, the purchase was actually for $1,500 in baby clothing, but because we had opened the charge account, we had actually saved 20% – including tax, the total due came to just under $1,300. She also could not send us a fax of the credit card application and sales slip as together they contained personally identifiable information and there were strict laws protecting us from misuse of our personal information; so she had to mail it to us. Once we received the information, we could then prepare and return a notarized statement that they would review on its merits regarding a resolution to the $1,300 amount due. This obvious clerical mistake might not be resolved before dinner as we planned…

We did find it a bit ironic that the laws protecting us against having our identities stolen would slow down the process of having our identities returned to us and our records cleared. The greater concern was how our privacy had been breached as the credit card application included a social security number, drivers license number, credit card numbers, our address and telephone number. How many more surprise bills would the daily mail delivery bring?

The next call was to Home Depot. It was the same scenario – a discount for opening a new account – this time for $6,000 of wood. They asked a lot more questions, asking us to confirm our personal information, but would not reveal anything submitted on the application citing confidentiality concerns. We didn’t need to mail anything to them, as it looked to the clerk like the thief had made up the social security, drivers license, credit card and telephone numbers, but the address was correct. He processed the credit to “our” account and suggested that we freeze access to our credit files for 7 years. As we were the victim of an identity theft, there should be no charge, but we would need to contact the three major credit reporting agencies directly to request the freeze.

We hung up the phone and immediately called Lowes. This was the most interesting call of all – they already had all our information and immediately adjusted the balance. A miracle, no. We had been connected with the same individual who helped us from the Home Depot credit department. Apparently he worked for the issuing bank that was behind both the Home Depot and Lowes charge accounts and worked in a large call center that covered both accounts. This time, he provided us a bit more detail into what had happened.

We had not been singled out – as a matter of fact, hundreds of people who had recently moved into the area had been targeted. The individuals behind this scheme would pull publicly available records from the county tax assessor web site and identify new residents in new neighborhoods. They would then create counterfeit drivers licenses using the correct name and address, but using a fictional drivers license number. They would also create a phony social security number and mock up bogus credit cards. They then found a number of accomplices to enter the store and sign up for the new accounts – in exchange for a relatively small share of the take. The drivers license would have a picture of the helper and appropriate eye and hair color.

Stores with more relaxed credit verification processes would be targeted. Apparently interested in minimizing inconvenience to the legitimate customer to speed them through an application process, the stores hit in my case never validated the drivers license, credit card or social security numbers. The thieves obviously knew this and hit fast and hard – normally within a single week. Literally hundreds of bogus credit applications were completed and used to purchase goods that were very easy to fence –lumber, baby clothes – not a lot of trackable serial numbers on these goods. Plus, they maximized their return by taking advantage of sales…

The gentleman from the bank was fairly certain some form of well organized crime syndicate was behind these attacks as they had access to relatively high quality credit card and drivers license forgeries and would pop up periodically in geographically diverse areas around the country – each wave pulling in millions of dollars of easy credit from merchants.

This is the most difficult form of identity theft for an individual to prevent as it comes to the attention of the victim well after the damage has occurred. My personal information was never really breached – someone simply looked up my name and address. The only reliable method to avoid this sort of identity theft is for the merchants and banks issuing new store credit cards for immediate to increase their loss avoidance processes. Interestingly, these groups wind up incurring the most financial risk and have the most to gain from improving their process.

While it may not directly prevent this sort of identity theft, one significant benefit from the credit freeze was the almost complete elimination of direct mail credit card solicitations. In retrospect, it may sound strange to say, but despite the stress and time spent clearing up the issues with the three merchants, the reduction in unsolicited junk mail – for seven years – almost made the ordeal worth the aggravation…

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It doesn't take much for this to happen to you. See All 3 National Credit Scores & 3 Reports Instantly, Online & Free! Checking your credit doesn't hurt, but having your identity stolen does.