Heidi Anderson didn't know much about identity theft until her Christmas 2001 shopping trip to Victoria's Secret, where a cashier said her store card -- which she had used only once before -- was over its limit.
A check of her credit reports revealed the depth of Anderson's misfortune: Using her name and driver's license number, someone had opened 33 charge accounts and run up more than $30,000 in debt.
Her finances wrecked for more than a year, Anderson couldn't use what had been a spotless credit record to qualify for a mortgage on the home she had just picked out with her fiance. "We lost our house," said Anderson, a university fundraiser in Southern California. "It has to be one of the worst experiences of my life."
Anderson is angry at the Redondo Beach woman who wronged her and was later convicted. But she also blames the financial industry, specifically the institutions that screen credit card applications, for making the thief's job so easy.
"They'll give anyone a credit card without checking," Anderson said. "Until we hold the companies accountable, nothing's going to be done."
It could be that financial institutions aren't hurrying to tighten standards because of a little-known fact: Retailers, not banks, generally absorb losses caused by identity thieves. That means the companies issuing credit cards have little incentive to scrutinize applications, critics contend.
"As long as they continue to make money by granting credit easily to thousands of people every day, we're still going to have the problems," said Beth Givens, director of the nonprofit Privacy Rights Clearinghouse, a consumer information and advocacy group.
Banks counter that they are as strict as they can reasonably be in screening applications. Moreover, they have successfully cut fraud by impostors opening new accounts, said Nessa Feddis, senior federal counsel of the American Bankers Assn.
"The numbers are way down. The banks are doing a much better job of verifying information," Feddis said, although she was unable to provide figures to support that contention.
Regardless of who is liable for losses, she added, banks want to keep a good reputation and keep merchants as their customers.
