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Identity thieves, debt collectors top list of FTC complaints in 2011

By , CardRatings contributor
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Identity thieves, debt collectors top list of FTC complaints in 2011

Debt collectors racked up twice as many consumer complaints as credit card issuers in 2011, according to statistics compiled by the Federal Trade Commission. Yet, analysts awarded this year's top spot in the annual complaint roundup to identity thieves. The FTC's annual report on consumer disputes includes records of 279,156 identity theft issues, amounting to 15 percent of the year's total complaints.

Debt collection companies caused consumers to seek support from the FTC 180,928 times during 2011, while Americans reported 89,341 complaints about banks and lenders over the same period. Commission staffers log all FTC complaints into a nationwide database called Consumer Sentinel.

Local and state law enforcement officials can reference Consumer Sentinel files when investigating crimes or resolving complaints face-to-face. The FTC also opens Consumer Sentinel to foreign investigators chasing leads on cross-border criminal activity.

Identity thieves seeking paychecks, credit card accounts

2011's Consumer Sentinel report shows that a quarter of all identity theft complaints involve some form of "tax or wage related fraud." In some cases, investigators discovered workers using another person's Social Security number to avoid taxes or to evade detection by immigration officials.

8.4 percent of the complaints involved criminals using other Americans' identities to complete credit card applications. Another 5.8 percent of complaints stemmed from criminals accessing existing accounts to make purchases, cash advances, or balance transfers.

Three ways Congress can reduce identity theft

During Congressional hearings in 2011, Maneesha Mithal, director of the FTC's Division of Privacy and Identity Protection, offered four suggestions to reduce identity theft. Her testimony included the FTC's recommendation that Congress establish a national consumer authentication standard.

Mithal also urged Congress to set new standards that reduced transmission of Social Security numbers, preventing their abuse by criminals. Mithal also recommended tougher data security measures for companies that routinely handle social security numbers and other consumer information, also suggesting that they should notify consumers automatically after a data breach.

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