Identity theft is the fastest growing white-collar crime in America, with nearly 10 million victims last year alone. In some cases, a wallet with identification documents inside was stolen, in others, numbers were picked up off the Internet. No matter how it happened, with someone else's credit card or social security number, a thief can purchase thousands of dollars worth of goods, get a driving license or other official document, even secure a loan in someone else's name, and not be responsible for the consequences. For victims, redeeming their good credit can be a long, frustrating and often expensive process. So, some businesses in the Pacific Northwest are offering their employees identity insurance.
One in four Americans will become a victim of identity theft in the next five years. Mark Sterret, a maintenance manager for a chain of hotels in Oregon, almost became the one in that statistic in December.
"I awoke to the sound of someone jimmying my back door open," he recalls. "I woke up angry and ran in there hollering but by the time I got into my kitchen which is where the door is, I saw the screen door close and I didn't see anyone and my wallet was gone."
Nothing else was touched, but that didn't surprise the police officers who responded to the burglary. Law enforcement experts say thieves would rather use your stolen credit card to buy a brand new, very expensive flat screen TV, than carry off the battered old set in your living room. Usually, identity theft victims have to cancel all their credit cards and bank accounts, and spend weeks, months, even years working to convince lenders they didn't go on a spending spree. It's a long and stressful process, but now it doesn't have to be that way.
Not since last year, when former energy company executive Rick Kam started a new company called Identity Safeguards.
"What we do is literally help a victim stop the damage that identity thief is causing quickly and them help them repair the damage they've done," he explains.
For a small monthly fee, Identity Safeguards will assign you a 'personal recovery advocate' within 24 hours of the discovery of a theft. It will pay up to $20,000 for expenses incurred while reclaiming your identity, and it also provides weekly credit reports to make sure no one is taking a loan out in your name.
Rather than look for individual subscribers to his service, Mr. Kam decided to approach local businesses, suggesting they offer identity protection as an employee benefit, like health insurance. To attract customers, he produced a video in which a reporter steals the identity of a local Oregon police chief and goes on a spending spree. After the hapless officer is re-paid, the video introduces 24-year-old Leann Wheat, a convicted identity thief. "I knew what I was doing was not right. But I didn't care," she says. "I was high, I had two kids, and I had seen everything I wanted, and that I could have it. And that was the way I got it."
The presentation was persuasive enough to convince six companies to offer Identity Safeguards coverage as part of their employee benefits package. Lisa Kinsley, with an Oregon-based hotel chain, says her company wanted to offer its staff another form of insurance.
"I didn't know what the reaction would be," she said. "We just thought there'd be no harm in offering another kind of insurance. The first meeting that we had a manager approach me and he didn't hesitate to sign up for it."
In fact, about 10 percent of her employees signed up, and two needed the help within three weeks. One was Mark Sterret, the man who scared a burglar out of his kitchen at one in the morning. "I did get a live person, an operator, and she said 'Well, I've have an advocate call you first thing in the morning' - and that was Christine. And she called me, it had to be within 8 hours of when it happened," he said.
Mr. Sterret's recovery advocate, Christine Arevelo, says that having someone to call as soon as information is stolen is invaluable. "Timing is the key in identity theft, in recovery from identity theft," she explains.
Identity Safeguards has signed up 200 customers in its first three months of business. Eight have already needed the company's all-out identity recovery plan.