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HSFPP Weekly Update # 147—Identity Theft Revisited

Message from Bob: The day after the Federal Trade Commission released its list of the top ten consumer complaints—with identity theft still the top complaint—ChoicePoint agreed to pay $10 million in civil penalties and $5 million in consumer redress to settle the FTC’s charges that its security and record-handling procedures violated consumers’ privacy rights, as well as federal laws. Privacy violations like this put consumers at greater risk of identity theft. But note this: The stipulated final judgment and order is for settlement purposes only and does not constitute an admission by the defendant of any violation of the law. Consent judgments have the force of law when signed by the judge. This means that, even though ChoicePoint most likely is guilty of violating consumer protection laws, they will not be on record for having broken the law and executives in the company will not face penalties.

Source: FTC news release,

Message from Chris: Identity theft can be very difficult for the victim, often taking him or her several years to fully recover. During this time, the victim may be denied credit, may have trouble finding housing, and may unnecessarily be turned down for jobs. And, in the case of criminal identity theft, in which the thief has committed crimes under the victim’s identity, the victim might even be wrongly arrested and have to prove that those crimes were committed by someone else. For all these reasons, it is extremely important to do everything you can online and off to protect your personal information and your identity.


Related Updates:

Update # 141 - Phishing Revisited - 14 November 2005
Update #124 - New Twist to “Phishing” Scam - 11 April 2005
Update #118 - Avenues for Identity Theft - 21 February 2005
Update #112 - Online Security and Phishing - 10 January 2005
Update #110 - Online Payday Lending - 13 December 2004
Update #98 - Protecting Your Social Security Number - 20 September 2004
Update #70 - Tax and Identity Fraud Scams - 20 October 2003


Web Site Picks of the Week:

Both of these Web sites have great resources about identity theft for consumers and victims, including current laws, a reference library, news, and scam alerts.


Notes to Educators:

Many of your high school students will go on for post-secondary education. Reading the article from Update # 98 with one of the discussion questions below would be helpful to them in protecting their identity during college or in their other endeavors after high school.


Discussion Questions:

1.) What do you currently do to protect yourself from identity theft? Discuss ways that you protect yourself when on the Internet and at other times.


2.) In what ways do you think teenagers are most vulnerable to identity theft and what can teens do to correct this?


3.) Should penalties for identity thieves be more severe?


4.) What can you do after high school to prevent identity theft? (Many colleges and universities use your Social Security Number as your student ID number) Look at Update # 98 and discuss.


Follow-up Activity:

Quiz: Consumers can test their knowledge about identity theft at

Choose the appropriate ones for your audience’s age and knowledge level.

History / Social Studies class: Research the history of identity fraud in the U.S. and write a short essay on the subject. Areas to be considered include the various laws on identity fraud. Compare federal law with California law on notification of consumers if their identity is stolen.

English class: Write a letter to your congressperson to help individuals like Raymond Lorenzo, who have had their identity stolen. Detail the various positions involved with this issue and weigh the evidence. Identify a solution that you think your congressperson should pursue. The letter should be three pages, with notes and bibliography included separately. Use at least three sources: Magazine and newspaper articles only; no encyclopedias may be used. At least two of your sources must be current (no more than one year old).


In the New$.....Waking Up to Recurring ID Nightmares

The Federal Trade Commission (FTC) released their list of the top 10 consumer complaints of 2005 last week (1/25/06), and identity theft topped the list, accounting for about 255,000 of the 686,000 complaints filed over 2005.

We have done many stories on identity theft but have never really presented a personal story about it. Most people don’t think bad things will happen to them, only to others; otherwise more teenagers would wear their seat belts. Identity theft is one of most frequent crimes, however, and simply being careless about your personal information can make you a victim. Even somebody else’s carelessness with your information can result in identity theft, as we see too frequently in the financial services industry. And although state legislatures and Congress are trying to enact laws to prevent identity theft, nothing will stop it 100%. The following story about identity theft victim Raymond Lorenzo comes from a recent article in the New York Times.

“As members of Congress continue to dither over legislation concerning data security, the data broker industry, consumer’s rights and identity theft – nearly a full year after the ChoicePoint debacle first woke Americans to the problem – perhaps they should meet Raymond Lorenzo.

“In the early 1990’s, someone ran amok, using Mr. Lorenzo’s identity. It was used to rack up tens of thousands of dollars in fraudulent credit card debt. It was given to police after various traffic violations. And a man even used the name Raymond Lorenzo when he was arrested and indicted in 1991 in Suffolk County, N.Y., for, among other things, burglary, forgery, and criminal possession of a weapon.

“That imposter, Peter Perro (the boyfriend of Mr. Lorenzo’s ex-wife, it turned out), was additionally charged with criminal impersonation after Mr. Lorenzo filed a police report and fingerprints revealed the ruse. Mr. Perro was convicted on weapons and burglary charges in addition to criminal mischief.

“But deep inside the state’s Criminal Record Information Management System, it appears that a simple clerical error – and the digital ripples in unleashed – may have sealed a dismal future for Mr. Lorenzo.

“Lorenzo, Raymond” is listed as the felon, using the alias “Perro, Peter” – a perfect reversal of the facts.

“The precise details are still being sorted out, but it seams clear that over the next 15 years, that digital nugget – like so much else in this age of consumer recordkeeping – was bought, sold, copied, stored, transmitted and appended to a digital dossier that, along with the erroneous debts and driving records, has haunted Mr. Lorenzo at every turn.”

Yes, this is an extreme case, but it shows what can happen to any of us, and shows that the businesses that made the errors are not the ones paying the price for their mistakes.
We can pass all the consumer protection laws we want, but it still doesn’t help individual citizens who are victimized if laws are not enforced by state and federal regulators and law enforcement agencies.

A good example of this related to ChoicePoint, which last year acknowledged that the personal financial records of more than 163,000 consumers in its database had been compromised. According to the FTC, “ChoicePoint failed to tighten its application approval procedures or monitor subscribers even after receiving subpoenas from law enforcement authorities alerting it to fraudulent activity going back to 2001.”

Sources: (1) “Waking Up to Recurring ID Nightmares,” by Tom Zeller, Jr. New York Times, 1/09/06. (2) FTC news release,


Kentucky High School Financial Planning Program
The purpose of the HSFPP weekly financial updates and Web site is to assist county Extension agents, credit union educators, high school teachers, and parents who home school their teenagers so that they may improve the economic well-being of our teenagers; and also to show educators how the HSFPP and the weekly updates meet Kentucky core concepts. The Web site and weekly updates are provided by the University of Kentucky Cooperative Extension Service, and are free to all educators. The list of core concepts and order form for free program materials including the student guide and instructors manual can be found on the Kentucky HSFPP home page. 

Please note, this page is no longer being updated. Please go to our New Blog for current information.

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