<http://www.nytimes.com/2006/11/13/us/13identity.html> November 13, 2006 Stolen Lives Identity Thief Is Often Found in Family Photo By JOHN LELAND
In the five years since his divorce, Eric Wagenhauser had moved on with his life. He had remarried and was sharing custody of the three children from his first marriage. Then, last year, Mr. Wagenhauser discovered a new wrinkle on American divorce: his former wife had used the children's Social Security numbers to apply for nine credit cards in their names. She obtained two.
Mr. Wagenhauser's ordeal over the next year, which involved police departments in two Texas counties, banks, credit bureaus and the Social Security Administration, is familiar to many identity theft victims — the crime often begins at home.
Though most victims never learn who stole their identities, half of those who do say the thief was a family member, a friend, a neighbor or an in-home employee, according to surveys by the Federal Trade Commission and Javelin Strategy and Research, a private research firm. The surveys estimate that 9 million to 10 million Americans have their identities stolen each year.
Mr. Wagenhauser's former wife, Ivy Ash, began applying for credit cards in the children's names soon after the divorce. She ran up about $200 in unpaid bills, he said, which grew to about $1,000 with late fees and interest penalties. She pleaded guilty to two counts of fraudulent use of a credit card this year and is now in a Texas prison.
But the effect of the thefts is still being felt in the Wagenhauser household. "This has been a financial strain, and to be quite honest, you can hear my wife and I bickering right now over this," said Mr. Wagenhauser, a Houston construction worker. "We've had to go into marriage counseling ourselves because this has been so stressful on our own marriage, just dealing with it, the fighting, the arguments.
"It has almost reached the point where my wife and I have gotten a divorce over all the stress related to having to fight the crime. It stretches out over so many things. That's what makes it so devastating and insidious."
Identity theft involving family members takes many forms, said Betsy Broder, assistant director of the Federal Trade Commission's division of privacy and identity protection. A child steals a parent's identity to buy drugs, one sibling steals another's identity to try to avoid arrest or debt.
Identity theft is often difficult to solve and prosecute, and, in the case of families, victims may be reluctant to report relatives to the police.
The fraud went on for five years before Mr. Wagenhauser became aware of what was happening. By then, the mother's actions had created credit histories for two of the under-age children, which Mr. Wagenhauser worries will cause them future trouble.
"When my kids turn 18 and go to college, they're not going to be able to buy a car or get a student loan because they've got bad credit," Mr. Wagenhauser said. "No one's going to rent them an apartment. They're going to be turned down for jobs because there's so many companies that run credit histories."
"They're kids," he added. "They don't have any idea what's going on. All the sudden they're adults, and they're left holding the baggage."
Suspicious parents can look out for clues that their children's identities have been compromised, said Jay Foley, a founder and director of the Identity Theft Resource Center, a nonprofit organization that helps victims.
"Let's say Mom and Dad are divorced, and Junior goes to stay with dad," Mr. Foley said. "When he calls Mom, she sees the kid's name on the caller ID instead of Dad's. If that was set up in the kid's name, what else was set up?"
If young children start to receive applications for credit cards in the mail, it is a sign that someone with access to their Social Security numbers has applied for credit in their names, Mr. Foley said.
After their mother went to prison, Mr. Wagenhauser's children moved in with him. He and his new wife, Tracey, have not decided how they will explain the crime, or the punishment, to their youngest children, who are 10 and 8.
"It's definitely estranged me from my oldest daughter," who is 15, Mr. Wagenhauser said. "My oldest daughter, who is old enough to understand, has been told that I am the one who put her mother in jail. She's not accepting that her mother is the one who did this to her and to herself."
Identity theft by a family member or someone close to the family is probably underreported and raises thorny questions about trust, responsibility and loyalty, Ms. Broder said.
"We see parents taking advantage of their children, and children taking advantage of their older parents," she said. "We can tell consumers and businesses to be careful about how they safeguard their personal information, but it's hard to tell people to safeguard their information from the people that they love."
For Brenda Bare, of Snellville, Ga., the identity thief was a trusted friend whom Ms. Bare, 58, had known for 22 years. The friend, a woman, had been living in Ms. Bare's house.
When Ms. Bare returned home in August after being away for a month to care for her mother, she discovered that 10 checks and a recently expired driver's license were missing. A credit card offer in her name was in the woman's bedroom with the application form torn off.
"I said, 'You have to leave here tonight,' " Ms. Bare recalled.
For the next two weeks, Ms. Bare tried to repair the damage. She found helpful a checklist for identity theft victims; versions are available from the Federal Trade Commission and the Identity Theft Resource Center. Ms. Bare discovered that four checks had been cashed, for about $400 in all, and that an application had been made for a credit card, though it had not been approved.
Because the crime was committed in her home by someone she trusted, Ms. Bare said she felt vulnerable.
"The first two weeks I slept with the front and back porch lights on, and if I would hear a noise, I was awake," she said. "I have a dog, but my dog knows her. But I'm feeling better about it and going on with my life."
Ms. Bare's checks had been cashed in another county. She finally tracked down the stores and banks where the checks were cashed, and local police officers issued arrest warrants. But even after her bank cleared her of responsibility for the forged checks, she said, she was still not off the hook.
"After the bank reimbursed my money, they went back to the merchant and took the money back from the merchant because the check was no good," she said. "So the store thinks I wrote a bad check, so they come after me. I had to go prove I didn't do this. This was a nightmare. My bank was supposed to close my checking account, but when I went back in there it was still open."
Although she canceled her credit cards and registered a fraud alert with credit bureaus, she said she was concerned that there was little preventing the thief from using her information again or selling it to someone else.
"There's still four or five checks that were never retrieved," Ms. Bare said. "My license was never retrieved. She can sell all this information. The D.A. just said, 'Oh, she won't do that again.' "
Identity theft by family members can put special pressure on the victims when there is a possibility of children, parents or former spouses going to jail or prison. Many victims pay the debts and choose not to involve the police or the courts, said Mari J. Frank, a lawyer who works with people whose identities have been stolen.
"It's such a breach of trust," Ms. Frank said. "When someone you don't know steals your identity, it's very impersonal. They just want money. But when it's a family member, it's far more emotionally destructive."
For a Michigan couple, the problem began in August with a notice that a bank had received a credit card application in their name. The couple declined to be identified because they are hoping to resolve the matter privately.
The couple immediately suspected their son, who had tried the same thing four years earlier. This time they found that he had obtained two credit cards, run up debts of more than $22,000 and applied for new cards or higher credit limits.
"The explanation was that we never helped him when he wanted the money," the father said.
After much soul searching, the parents said, they did not want to see their son put in jail. They negotiated a plan for him to assume the debt on one card and resigned themselves to paying a debt of about $5,000 on the second card rather than reporting the crime to the police.
"We'd make an arrangement for him to pay us, but I'm sure he wouldn't," the mother said. "He has a unique way of getting around anything. It doesn't send a very good message, but putting him in jail is not going to help either. There aren't too many good options out there. If he goes to jail, he's not going to learn anything except to wisen him up to be street smart. What choices do we have? All our life from now on we have to watch our credit."
She blamed herself for the way her son had turned out. "I don't know what went wrong, but in the end we have to say it's our fault, and that is terrible to live with," she said. "I can't think of anything worse for a parent."
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