NPA Hears Real Life, Not The Movie

December, 2005

The fastest-growing financial crimes in America today are check fraud and identity theft. That's how Frank Abagnale, made famous by the movie "Catch Me If You Can," began his keynote speech to the National Parking Association's annual meeting in October in Miami Beach.
The con man turned FBI consultant and expert on so-called "white collar" crime gave a less romantic view of his life than that shown in the movie, in which he was played by Leonardo DiCaprio. The movie was based on a book of the same name, but Abagnale had only four meetings with the book's co-author and never met with director Steven Spielberg, who to date has never even had a conversation with Abagnale.
Although the first part of his presentation was interesting and entertaining, it was the second part that riveted the audience to its seats. With the help of a brochure provided by Abagnale's sponsor, the Discover Network, here are some first-person excerpts:
The Nilson Report estimates check fraud losses to be about $20 billion a year. The American Bankers Association has stated check fraud is growing 25 percent per year. Check fraud gangs are hardworking and creative. They constantly try new techniques to beat the banking system and steal money. Historically, the banks have been liable for these losses. However, recent changes in the Uniform Commercial Code share the loss with the depositor.
The Federal Trade Commission reported that nearly 9.9 million Americans have been victims of identity theft, costing consumers $5 billion and banks and businesses $48 billion every year. Because this crime is so simple to commit, I believe identity theft will become one of the most profitable criminal activities in history.
There are endless opportunities for a criminal to obtain the necessary information to commit identity theft.
Let me illustrate just two, beginning with your visit to a doctor. As a new patient, the receptionist asks you to complete a form that asks for your name, address, phone number; your employer's name, address and phone number; and your health history, They copy your insurance card, which includes your Social Security number. Your co-pay is paid with a check drawn on your bank account. You have just provided enough information for someone to become you.
Another example: You walk into an upscale department store to make a purchase. You take your selection to the cashier and write a check. On that check is your name, address and home phone number, the name of your bank and its address, and your bank account number. The cashier asks for your driver's license -- in 19 states, the license number is your Social Security number. The cashier memorizes the birth date on your license, and then asks for your work phone number, which will give them the name and address of your employer. Once again, a thief has sufficient information to apply for credit in your name.
I am 56. As a [young man], I did things that today, as a husband and father, an educator and consultant, I am not proud of. Recounting one youthful experience may be
illustrative:
In my youth, when I wanted to establish a new identity (so that I could open a bank account and pass bad checks), I would go to the Department of Vital Records (in any city I was in). I would ask to see the death records for 1948, the year I was born. Every fifth or sixth entry was an infant who had died at birth. I would write down the death information and later apply for a birth certificate in that name. I would fill out a form, pay $10, and obtain a legitimate birth certificate. I would go to the DMV and get a license with my picture, my description, and somebody else's name. I had 50 legitimate driver's licenses.
Now, 35 years later, you can buy a CD-ROM with birth and death records and apply for a birth certificate by mail. There are Web sites that sell Social Security numbers for $49.95. Their advertisements claim that they can tell you anything about anybody. I researched these companies. All you provide is someone's name, address and DOB and they will tell you everything you want to know, including spouse and children's names.
For the identity theft victim, the nightmare has just begun. On average, it costs a victim $1,173 and 175 man-hours to get a credit report straightened out. Fixing the problem is not as simple as saying "that wasn't me." You must prove you did not apply for that loan. To fix things, you must first convince the credit card or finance company. Then you must convince all three credit bureaus. In most cases, the credit bureaus refuse to delete the dispute from your credit files. Instead, they put an asterisk and say, "Customer disputes this Visa charge; claims they were a victim of identity theft." The result is that anyone accessing your credit report, whether a potential employer or a company considering granting you credit, may question whether you were really a victim or if you were just ripping somebody off.
I am personally concerned about identity theft. A few years ago, I subscribed to a service that notifies me each time my credit report is accessed. Privacy Guard (www.privacyguard.com) provides me with the contact information of any company that obtained my credit report, as well as the means to correct false data. I consider their annual fee money well spent.

Frank Abagnale can be reached through his Web site, www.abagnale.com. He is a paid consultant to Discover and Trilegiant, owners of www.privacyguard.com.