That crime used to be called fraud now it's in the identity-theft category. Like shoplifting, the crime is bad for business and bad for the economy. But it's a breeze for consumers: The law forbids credit card companies from making clients pay more than $50 in false charges. Even that $50 often gets waived, typically, in the interest of good customer service.
More insidious forms of identity theft, like opening new credit accounts in a consumer's name the type of theft LifeLock's periodic fraud alerts purport to prevent are less common.
Statistics show that many victims don't act particularly concerned.
The Federal Trade Commission's 2006 data shows that of about 250,000 identity theft complaints to the FTC, more than half of victims never contacted a credit bureau to place a fraud alert. About 62 percent never contacted police.
A survey of 5,000 American homes in October by Javelin Research and Strategy showed new-account fraud seems to be declining: One percent of respondents to the survey reported being victims, down from 1.5 percent in 2005. Identity theft cost victims less money and took less time to resolve last year, too.
Overall, 3.7 percent of Americans were victimized in 2006, down from 4.7 percent in 2003, the survey concluded.
That still would mean millions of victims.
But Fred Cate, an Indiana University professor and authority on banking security issues, says a lot of these survey numbers are "crap."
"So, we call these people at home, have these murky definitions, then we multiply that out," Cate tells New Times. "I don't mean to sound too skeptical, but we know Visa has testified before Congress, and more than half the calls they get about false charges, they weren't false charges."
Cate, who has testified before Congress, says that although identity theft isn't such a big problem in the greater scheme of things, he doesn't want to "diminish the horror" victims may feel. He believes innocent people have gone to jail because of the crime he says he's talked with some of them. But it's not exactly a widespread phenomenon.
Fearing the worst motivates people to buy identity-theft insurance and credit-monitoring services, which have become big business. Plenty of companies offer services similar to LifeLock's, including the three credit bureaus.
"The unique and troubling aspect of identity theft is that it's not like other crimes, where the crime happens and it's over," says Ron Griffin, public education manager for Experian, one of the credit bureaus. "The nature of ID theft is that it recurs."
Credit bureaus are usually the "messenger that somebody is at it again," Griffin says.
Once an identity thief screws up your credit, the process can be "cumbersome" to unwind, Griffin admits. Victims must present valid police or state identity theft reports, and provide identifying information, he says.
Arizonans are extra vulnerable. The FTC says the state was No. 1 for the crime last year, though Valley residents are less likely to become victims, on a per capita basis, than people in smaller towns like Flagstaff and Prescott.
Responding to worried constituents, Republican and Democratic lawmakers in Arizona worked on a bill this year that would allow people to freeze their credit reports, making it close to impossible for thieves to open new accounts.
State Representative Bob Robson, a Republican from Chandler, says the bill failed partly because the fee of $45 to freeze the reports at all three credit bureaus was too high. Customers could unfreeze the reports in as little as 15 minutes to take advantage of a good credit offer, but they'd have to pay for a refreeze. The bill will be back next year with a better price tag, he predicts.
According to an article in the Washington Post last month, 33 states already have similar credit-freezing programs. Robson points out, though, that only about 50,000 people nationwide have taken advantage of that option.
"I heard it might be for people who don't use credit a lot," Robson says.
Amanda Aguirre, a Democratic state Senator from Yuma who helped sponsor Arizona's credit freeze bill, has her own tale of woe, though nothing so dramatic as Robert Maynard's. The Regional Center for Border Health Inc., a walk-in health clinic in San Luis, was struck last year by an identity thief.
"Somebody used the routing number of the nonprofit agency, went on the Internet and paid all kinds of bills," says Aguirre, the agency's president and CEO.
It's not a good example for her bill a credit freeze wouldn't have prevented the crime. And like most identity-theft victims, the agency paid no out-of-pocket expenses. The bank reimbursed the agency the $6,000 that was stolen, and her staff spent about five hours doing paperwork and making phone calls to fix the damage.