10/09/2014 06:49 pm ET Updated Dec 09, 2014

The Dark Side of Zero Liability

By Neal O'Farrell, Security and Identity Theft Expert for

Last week I got a call from a victim in a panic. He had just applied for an important housing benefit that he and his girlfriend were really depending on, only to be told that he didn't qualify because he had at least three criminal convictions on his record, for violence and drug possession, and all in just the last two years. He was told he had only 10 days to address the matter before he would lose those benefits for good. He knew he couldn't do it in just ten days. He had never been arrested in his life and had no idea where to start.

Much to the irritation of the more politically correct, I've been preaching for years that one of the biggest obstacles to reducing identity theft is the apparent apathy of many, if not most consumers. And one of the reasons for this apathy is zero liability -- the belief on the part of consumers that if they fall victim to identity theft, any identity theft, zero liability will somehow swoop in and fix all.

Identity Theft: One Victim's Horror Story

So I thought I'd highlight just some of the cases I'm currently working on to help expose just what a myth zero liability is and the price some victims will pay for believing it.

A DMV Nightmare

Like Valerie. Valerie (not her real name) lives in Northern California near the Oregon border. She's only 20 years old, has no criminal record, not even a driving ticket. So imagine her surprise when she recently visited her local DMV office to renew her driver's license, she was refused on the basis that she had a recent conviction for DUI. And because she had not completed any of the requirements of the mandated program, she would not be getting her driver's license any time soon.

Valerie didn't have a DUI conviction. Or arrest. Or any kind of driving citation or ticket in her life. When she asked the DMV to explain - they couldn't, citing privacy reasons. Which left Valerie with no place to turn. Without her driver's license she might not be able to get to work. She now has a DUI conviction in her name, which would make it difficult -if not impossible - to get car insurance or maybe even a job in the future.

And because she had no idea who issued the ticket - it could have been anywhere in the state or even the country - she had no way of challenging it.

A couple of stressful days later Valerie got some good news and some bad news. The bad news was that as a result of her DUI she would now be required to have a breathalyzer ignition lock installed in her car. That could cost her thousands of dollars in installation and leasing charges.

The good news was that she now knew, from the letter, that her DUI conviction was from Alameda in the San Francisco Bay Area. So what next?

The first thing I need to do is find out what law enforcement agency issued the ticket, and from there get all the information I could about the conviction - who, where, when. I would have to approach that agency, see if they'd be willing to cooperate and share what information they have, and perhaps going to the trouble of comparing any booking photos or fingerprints taken during the arrest. They may simply say no, and they often do. Which can sometimes leave victims with few options.

My next stop may have to be the local District Attorney's office, to persuade them to take a fresh look at the case and help to expunge the record. And that's not so easy. These agencies are overwhelmed with work and are often very reluctant to undo any decision made by them or a court. Even if it was a mistake.

Even if they agree, and that can be very tough, I'd still have to get the case in front of a judge and get him or her to expunge the victim's record. That could take months, and months more before the paperwork works its way to the DMV and a resolution.

And all the time Valerie may be without a vehicle. Without a vehicle, and with a DUI conviction, she could lose her job. And with no job, she may not be able to pay her rent. One simple case of identity theft has put her life on hold and may change it forever.

As if things couldn't get any worse, Valerie needs to go to her local police or Sheriff's department, file a report of criminal identity theft, and request that her fingerprints be taken so they can be compared to the thief's. But because there's now an outstanding warrant for Valerie for the DUI case, her local police department might just as easily arrest her as soon as she shows up. Which means we'll have to contact her police department first, find the right person, and persuade them to cooperate with us rather than arrest Valerie.

This case has two very clear lessons - that just because an identity theft case isn't financial and doesn't cost the victim any money, it doesn't mean that it won't affect them, for months or even years; and while a thief can use a stolen identity in a second, the victim may have to go through months and possibly years of effort and stress, with little help or sympathy, to undo the damage. So let me ask you this. How's that apathy working for you now?

This post originally appeared on Neal O'Farrell, Credit Sesame's Security and Identity Theft Expert, is one of the most experienced consumer security experts on the planet. Over the last 30 years he has advised governments, intelligence agencies, Fortune 500 companies and millions of consumers on identity protection, cybersecurity and privacy. As Executive Director of the Identity Theft Council, Neal has personally counseled thousands of identity theft victims, taken on cases referred to him by the FBI and Secret Service, and interviewed some of the nation's most notorious identity thieves.