This hearing of the Subcommittee on Financial Services and Technology will focus on the counterfeiting and fraudulent use of financial instruments such as currency, checks, credit, debit, and ATM cards, and related identity theft. It has been said that white collar crime is a faceless, victimless, crime where there is no harm done to an individual. As our first panel of witnesses will demonstrate, these are not victimless crimes. Individuals are victimized; people are hurt, and the emotional scars are not easily removed. There are people on my own staff that have suffered from identity theft and credit card fraud. This is a growing problem and one that threatens to increase in the future because it is so easy to commit, difficult to track, and perpetrators are less likely to spend time in jail.
Today we will investigate what may be one of the most widespread crimes facing Americans today. Each day 1.2 million worthless checks are presented for payment. Half of these are presented with the express intention of deceiving, swindling, and defrauding. Since the truly successful fraud goes unsolved and sometimes even undetected, accurate estimates of financial instrument fraud are impossible to come by. But some have estimated that check fraud alone accounts for over $10 billion in losses annually. This ignores the cost due to heightened security measures and the emotional toll exacted on its innocent victims. With the exception of cash, almost all of our financial instruments require some form of identification. Given appropriate identification, we can lay claim to vast sums of wealth. However, given false identification, a person can lay claim to someone else's wealth, whether it be through checks, money orders, travelers checks, or credit, ATM, and debit cards.
We will hear from three panels of witnesses today, each of which will share a unique perspective of this growing crime problem. The first panel will consist of a private individual, Ms. Diana Christiansen, a school psychologist from Provo, Utah and Mr. Robert Edmund, the CEO of a family owned business. Ms. Christiansen will tell us how she was the victim of identity theft. Mr. Edmund will tell us how his company was victimized by a check fraud scheme.
The second panel will consist of Chuck Owens, from the FBI, and Mr. Dana Brown, from the Secret Service. These gentlemen will share the results of their research into the problems of financial instrument fraud. They will tell us how widespread this problem is, how easy it is to perpetrate, and even demonstrate some of the more common forms of financial instrument fraud.
Our third panel today will consist of Mr. Dennis Brosan, from VISA, USA, and Mr. Roger Lablond, from Pacific Southwest Bank. They will share with us experiences they and their firms have had with regard to check fraud, credit card and ATM card theft, as well as other forms of bank and credit fraud. As you listen to their testimony, I encourage you to think of these crimes and their respective losses, not just in terms of corporate loss, which it certainly is, but in terms of its cost to society. In the end these losses are borne by us all. We pay for these losses and their respective preventive security measures in the fees we pay for financial services and the time and inconvenience associated with identity verification.
For some, such as Ms. Christiansen, Mr. Edmund, and several of my own staff,
however, the price to be paid is both incalculable and real. Whenever we share our
social security or credit card number, leave our credit card receipt at the gas pump, or
use our debit card, we unwittingly place ourselves at risk to this very real and growing
threat of fraud. Hopefully our hearing today will heighten our awareness and suggest
ways to counter this growing problem of financial instrument fraud.
Home | Menu | Links | Info | Chairman's Page