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All In The Family

Identity Theft Hits Close To Home

Buried in a recent government study on the alarming increase in identity theft in America is a startling number.

The Federal Trade Commission estimated that in 9 percent of all cases of identity theft, a family member or relative was the culprit. That means one out of every 11 cases is an inside-the-family job. The causes are many: drugs, divorce, money troubles, and just plain bad blood between relatives.

As Correspondent Lesley Stahl reported last spring, identity theft has become a family affair, pitting parents against children, brother against brother, sister against sister.

As Abigail Kelly remembers it, her little sister Delia always looked up to her. So as adults, Abigail wasn't surprised when Delia asked her to be a beneficiary on a life insurance policy and asked for the Social Security number.

But the Social Security number Abigail gave Delia would soon touch off a bitter family fight – and a court case that stretched from Maine, where Delia lives, to Abigail's home in San Diego.

It started one day when Abigail was looking for a house to rent, and she discovered, during a routine credit check, that there was a warrant out for her arrest in Maine. The warrant was for an unpaid bill for home heating oil, which was in Abigail's name.

Abigail soon found out that there were a lot of other things under her name. "I called Maine information and asked for myself. And they gave me a phone number," says Abigail. "Which amazed me, that she could just give a Social Security number and, 'Oh, here's a phone line.'"

And it wasn't just the phone company in Maine. Because of a shaky credit history, Delia had used Abigail's Social Security number and name to get credit from a bank, from other energy companies -- even for a hot tub.

"I called the police in Maine. They laughed at me on the phone," says Abigail. "They literally laughed on the phone. Like, 'You really think we're going to deal with your problems in California, here? You think we're going to deal with a family member with identity theft over here? That this is going to be on the top of our priority?'"

The FBI put her off, too. So Abigail took Delia to court in San Diego, filing a civil suit against her own sister. Abigail charged that, along with everything else, she lost a job when the employer's background check turned up that Maine warrant for her arrest.

The judge ruled in Abigail's favor, ordering Delia to pay her sister $50,000 for damage to her credit, lost income, and emotional distress from the identity theft.

"She called me. Things were pretty positive at first, like, 'I'm sorry I did that. I won't do that any more,'" says Abigail. "'But you know what, like nothing's going to happen to me, because it's a civil judgment, it's in another state.'"

When Abigail realized that Delia was not going to pay the $50,000, she went to court again – this time in Maine. And nearly four years after her sister first got Abigail's Social Security number from Abigail, Delia agreed to pay almost all the $50,000 – but it tore their relationship apart.

"After this happened, I called my sister and she said to me on the phone, 'You are not my sister any more. You are dead to me,'" says Abigail.

"You want to go in there, and like the Social Security number is a chip, and just take it out of their head. ... Don't know my Social Security number. I can take you for all your faults but don't know my Social Security number any more. That's kind of how you feel when it's your family."

Identity theft of Social Security numbers, credit card information, personnel records is rampant these days, fueled by the Internet, computers, and America's charge-it mentality.

In dollar terms, banks and merchants are the biggest losers in this crime, which cost them $48 billion last year. And the government is fighting back, too.

The president recently signed a new federal law on ID theft. Among other things, it specifies that merchants can only put the last five digits of your credit card number on receipts.

But the depressing fact remains that 10 million people were hit by identity theft last year. And as many as 900,000 of them were victimized by their own flesh and blood.

Linda and Jay Foley run the Identity Theft Resource Center, which counsels victims of the crimes.

"As far as family identity theft, I would say I'm getting a dozen to 15 calls or e-mails every week … all in the family," says Linda Foley, who tells the story of one father who did this to his own son.

"A lot of them turn my stomach. We have one little boy who-- of course, we didn't, the police didn't know he was a little boy at the time -- he owes about $80,000 in credit-card debt. Child arrear payments, to himself. He has several citations for driving under the influence."

"Lynn," one victim who asked that we not use her real name, says her grown son stole her identity and at least $100,000: "When it's a family member, especially a son or a daughter, it's like, if you can't trust your kids, who are you gonna trust? They're a part of you."

Lynn's son went on a crime spree that included bad checks and credit accounts in her name all over town. He got away with it, since her real name could be seen as either male or female.

Lynn became suspicious, and then, she got a call from Sears. "He was writing a check for $2,500 or something like that, and they called the house to verify or something. And I told them to call the police," says Lynn. "You go through all the emotional part later, like going to court."

She testified against her son, and he did nine months in jail. "This is the worst kind of pain," she says. "You just don't expect your child to do something like that. It's like he tore my heart, tore a part of it out and it's never gonna be the same."

When 60 Minutes first started reporting on identity theft eight years ago, nobody could have dreamed how widespread it would become -- or how many families would be caught up in it.

Back then, we told the story of Mary Zupanc, a doctor who found that a gang of ID thieves had assumed her identity by forging her name to a simple post office change-of-address form. That diverted her letters to a storefront mail drop in Brooklyn, giving the crooks access to her financial accounts.

"My life has been a nightmare as a result, and continues to be," says Zupanc, who testified about it before Congress, and spent many months straightening out her credit.

Ever since, Zupanc and her husband, David Jones, have been careful to check their online banking and credit card accounts every day, looking for unauthorized transactions.

Well, guess what? It happened again just a year ago. "The first thing that came up was three withdrawals, ATM withdrawals, $800, $800 and $400," recalls Jones. "Well, that got my attention really quickly because I never get over $100 from out of an ATM. It was a scam. It was an operation."

Identity thieves had figured out how to hotwire the ATM that Jones used. Not only that: They had installed a tiny camera above the keypad so they could see the pin number he punched in.

The bad guys were caught. But for the second time, the Zupanc family had been hit by ID theft. And once again, they encountered a headache common to such victims: sorting it all out with the bank.

"You're having to prove that you didn't do something, prove that you didn't actually withdraw it. After all, they have your card number and the pin number. It was all done quite properly," says Jones. "Must have been you, right, that took all that money out? Well, no, it wasn't."

In fact, getting your credit and good name cleared is often the most excruciating part of being a victim of identity theft. And in some cases, it can take years.

Since the crime often starts with a stolen Social Security number, you might wonder why you can't just change that number.

"Changing one's Social Security number is the equivalent of trying to cure a patient by amputating a leg for a common cold. You have to separate yourself with everything that your Social Security number is attached to, all your professional records, your college transcripts, licensing, your credit history," says Linda Foley.

"If you change your Social Security number, you really have to change your driver's license and your name. You become a new person. In effect, you've created your victim's protection program."

So most ID theft victims have to tough it out, going through the blizzard of paperwork to get their lives back.

"You lose your Pollyanna view of the world. You become cynical. Skeptical," says Zupanc. "And you, you're distrustful of people. And I'm saddened by that."

And for all-in-the-family victims like Lynn and Abigail Kelly, the emotional price is even higher. Neither Abigail's sister nor Lynn's son wanted to be interviewed for this report. Their victims, meanwhile, struggle with issues of family, love and betrayal.

"It's really difficult to put a feeling on it," says Abigail. "It's, like, this person was my best friend, too. This was someone I talked to almost three or four times a week. So you're losing that best friend."

Lynn still thinks of her son, even though she's lost him. "That's really hard, because I believe my son is dead. … There's a part of me, I'd like to see him, without seeing him ... so I can see he's OK," says Lynn.

"But when I see him, I know that person isn't my son, because I can't believe my son would ever do something like that."

Since 60 Minutes first broadcast this story in May, federal law against ID thieves has been tightened once again. President Bush signed a bill making jail time mandatory in cases of aggravated identity theft.