How Online Identity Fraud Destroyed One Man’s Life

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In less than six months, Dave Crouse went from living a secure middle class existence to facing financial ruin – and it all happened online.

“It’s been a nightmare,” says the 56-year-old Bowie, Maryland resident who had $987,000 charged to his debit card and accounts opened in his name linked to his bank account. Crouse’s once strong credit score of 780 is history. His financial information has been made public. “Even though my identity has been destroyed, they’re still using it today,” he says.

Identity Fraud Reaches New Highs

What happened to Crouse may be a worst case scenario. But identity fraud isn’t unusual. Crouse is one of over 11 million adults – one in 20 Americans – who were victims of identity fraud in 2009. According to a recent study by Javelin Strategy and Research, the cost was a whopping $54 billion, making identity fraud one of the fastest growing crimes in the nation.

Like millions of Americans, Crouse loved to bank and shop online. Using a wireless Internet connection at home, he auctioned on eBay.com, downloaded songs from a music website and used his ATM card like a credit card.

Crouse thought he knew how to protect his online privacy. He used virus protection software and kept it updated. He transferred important financial information to a backup drive and never wrote down his banking password. Crouse also shredded his financial documents. “You think you’re safe,” he says. “You think you are protected.”

In February of 2009, his bank account started showing a negative balance. Crouse began noticing small unfamiliar charges on his statements. Soon they grew to thousands of dollars. “I was going to the bank every day and looking at all the charges,” he recalls.

When Crouse opened an account at another bank, the very next day both accounts were debited $1,100. Many of the charges were for online purchases or from Internet gambling sites. Third party charges appeared from Dell, Exxon, T-Mobile, Sprint, AOL and Best Buy. Some were for merchandise delivered to out of state addresses.

In the spring of 2010, Crouse was shocked when he got a call from an Ohio police detective who told him that his credit card information had been found in the trunk of a car during a drug and firearms arrest.

Today, he has a stack of bills 12 inches high for purchases that he never made. “I will never be able to make a big purchase like a car or a house again,” he says.

If your credit card is stolen, a call to your card company to get a new one issued will generally limit your liability. But if your identity is stolen, there’s no easy or even permanent fix.

Identity Thieves Are Targeting Online Information

As more people like Dave Crouse are conducting their financial and leisure time activities online, identity thieves are targeting information that’s transmitted over the Internet.

While shredding financial documents offers some protection against off-line identity fraud, in the virtual world nothing is temporary. Your identity exists in hundreds of places there.

Thieves can use a variety of high tech tools to steal your information online. Malware that you unknowingly downloaded in an email attachment or in a song can record your keystrokes, exposing your passwords and financial information. You’re also an easy target for hackers if you connect to the Internet at wifi hotspots without using a virtual private network (VPN) to conceal your information.

Dave Crouse wishes that he’d known that before he put his identity online. He’s spent $100,000 trying to repair his finances; and his retirement and savings accounts have been bled dry.

These days, Crouse lives frugally, paying cash for everyday expenses and having bills automatically deducted from his checking account. “I’ve gone back to living like I did in the 70s,” he says.

For his 60th birthday, Crouse was looking forward to taking a cross-country motorcycle trip. That dream has vanished along with his identity. As a result of his credit fraud problems, Crouse lost his security clearance; and with it, any prospect of getting high paying jobs as a government contractor. He expects that it will take him five years to get out of debt. “I will probably have to work until the day I die,” he says.

Dave Crouse has this warning for people who think their personal information is safe online: “Every time you sign on, you are opening your door to someone to take your life away from you. It’s like opening your wallet to strangers,” he says. “And it’s only one click away.”

What You Can Do

If you think you’re the victim of online identity theft or identity fraud, take steps to protect your online security. Run a complete virus scan. Put a freeze on your credit with the three credit reporting agencies. Stop using any confidential information online.

If you’re connecting to the Internet at public wifi hotspots, make sure you have a virtual private network (VPN) to protect your online privacy.

These organizations can help you fight back against identity fraud:

Get Private Wifi   Protect your personal information.
Get DataCompress   Cut your mobile data usage.

Jan Legnitto

Jan Legnitto is an investigative journalist and documentary producer who writes about criminal justice and intelligence issues. Jan is also a frequent contributor to the Private I blogs.