Watch CBSN Live

High Price Of Identity Theft

More than 27 million people have been victims of identity theft in the last five years, costing them $5 billion and businesses and financial institutions almost $48 billion, the Federal Trade Commission said Wednesday.

The FTC released a survey showing that in the last year alone, 9.9 million people were victims of identity theft.

"For several years we have been seeing anecdotal evidence that identity theft is a significant problem that is on the rise," said Howard Beales, director of consumer protection for the FTC. "Now we know. It is affecting millions of consumers and costing billions of dollars."

The figures were extrapolated from a random survey of 4,057 adults, the agency said.

Identity theft occurs when someone gets identifying information on another — credit card numbers and checking account information, for example — and uses it to make purchases or otherwise pretend to be someone else.

In 2002, the FTC received 161,819 complaints about identity theft — double the year before — but agency officials acknowledge many people don't report the crime.

Indeed, the Justice Department estimated that as many as 700,000 Americans are victimized annually, costing each more than $1,000 to right the damage to their accounts and reputations.

It's no secret how the thefts occur, reports CBS News Correspondent Jim Stewart: lost or stolen credit cards give thieves a quick start to stealing your identity. So-called "dumpster divers" who wade through the trash for old bills and bank statements add to the problem, as does the Internet.

Last week, a California foundation reported it was able to buy the Social Security numbers of CIA Director George Tenet, Attorney General John Ashcroft and White House political adviser Karl Rove off an Internet site for $26 apiece. For another $300, you can discover someone's up-to-the-minute bank balance.

The FTC's advice is simple.

"Keep up with your receipts," says Beales. "Don't leave them lying on the table as too many of us do and make sure they're destroyed in a way that somebody can't dig them out of the trash and have your credit card account number."

And one other thing, says the FTC: read your mail. Over half the surveyed victims discovered the fraud themselves by carefully checking their monthly statements.

Barbara Anthony, Federal Trade Commission tells CBS News Correspondent Steve Dunlop "Safeguard your personal financial information. Make sure no one's misappropriating your good credit."

In 2001, the FTC introduced a Web site and toll-free phone number for identity theft victims.