2_BillMeLater
Convenience: It’s the catchword of our time. Coffee comes in pods, checks are deposited by smartphone, and big-ticket purchases are made—literally—with the click of a button.

But with convenience comes risk (OK, maybe not the coffee). As companies offering instant credit allow consumers to acquire thousands of dollars of debt in an instant, criminals cash in. Services such as BillMeLater, a PayPal company that allows customers to make purchases on credit after a simple sign-up process and credit check, have created an identity theft trend and left victims fighting to clear their names.

The IDentity Theft 911 Fraud Resolution Center reports more than 55 such cases this holiday season. “It’s a growing problem,” said Donna Miller, an IDentity Theft 911 fraud investigator. “It’s unfortunate that this crime is striking at a time when consumers are more likely to be distracted.”

Miller was dedicated to helping customer John Carr resolve his fraud experience with BillMeLater. Carr received IDentity Theft 911 identity management services through his credit union.

The former police officer from Florida was savvy about identity theft and careful to protect his personal information. But even he was easy prey for thieves who opened a BillMeLater account in his name and ordered three HP laptops. The purchases had been made using Carr’s given name—he goes by his middle name—and with a family phone number he didn’t normally use. One computer was shipped to his home, which tipped him off to the crime.

“It’s disconcerting to know that someone out there has your personal information and is willing to use it in ways that are dishonest and potentially damaging,” Carr said. “Having a service provided by my credit union when I needed it and having someone like Donna who knew what to do and who had pre-established channels to facilitate those tasks really made it easier to handle.”

The bad guys are finding success despite BillMeLater’s security efforts. The company’s site describes the service as “a secure, instant and reusable credit line. When you check out with BillMeLater, you can pay for your purchases in two simple steps—just enter your birth date and the last four digits of your Social Security number and accept the terms.” This personal information, however, is easy to come by.

Because thieves usually tweak the address or phone number, and there is no direct verification contact between BillMeLater and the presumed credit applicant, “customers often don’t find out about the fraud until they start getting collection calls,” Miller said. As a third-party facilitator, BillMeLater isn’t even the entity extending the credit, which complicates matters further.

“Whatever the agreement between BillMeLater and these retailers,” Miller said, “someone has to take the loss.” Consumers can make sure their wallets aren’t affected by signing up for credit monitoring and regularly checking with the three major credit reporting bureaus. “Keep on top of those credit reports,” Miller said.

Carr was lucky: He discovered the fraud quickly, and there was only one inquiry on his report—from the original BillMeLater credit request. He disputed the purchase with BillMeLater, which quickly closed his account, and he was not legally responsible for the purchases. But just days after the initial fraud, Carr received a credit rejection letter from BillMeLater. The thieves had tried to make more purchases. For what? Laptop accessories.

Brett Montgomery is a fraud operations manager at IDentity Theft 911′s Fraud Resolution Center.

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