█ KELLI A. MILLER
Identity theft is among the fastest growing crimes in America. A thief typically steals someone's identity, opens checking and credit card accounts in that person's name, then goes on a spending spree. The rate of identity theft or identity fraud had so escalated in the late 1990s that the Social Security Administration declared it a national crisis.
Identity theft is the most popular—and most profitable—form of consumer fraud. It encompasses all types of crime in which someone illegally obtains and fraudulently uses another person's confidential information, most often for financial gain. A person's Social Security number is valuable to an identity thief. Armed with the Social Security number, a criminal can open a bank account or credit card account, apply for a loan, and remove funds from varying financial accounts. In some cases, criminals have assumed the victim's identity altogether, amassing debt and committing crimes that become a part of the victim's criminal record.
The identity trail. Advanced computer and telecommunication technologies have armed thieves with new ways to obtain large amounts of personal data from afar. Hackers can spy on e-mail and Internet users, silently stealing passwords or banking information. Old-fashioned concepts such as "dumpster diving" still prevail. Thieves sort through garbage for telltale signs of identity such as
cleared checks, bank statements, even junk mail, such as "preapproved" credit cards.
Other criminal tactics include "shoulder surfing" and "skimming." A "shoulder surfing" criminal spies on someone as they type in a Pin number or password at an automatic teller machine (ATM). "Skimming," one of the newest schemes, occurs when a cashier receives a credit card for a purchase, then unknown to the victim, swipes it through a portable device that records the card information.
Consumer advocates estimate that 750,000 people will become victims of identity fraud every year. The statistic is a startling difference from numbers logged just a decade ago. In 1992, the credit reporting agency TransUnion logged about 35,000 identity theft complaints. A decade later, the company received more than a million calls.
Measures can be taken to minimize the risk of identity theft. Security experts recommend carrying a limited number of ID cards and credit cards, signing all new credit cards immediately with permanent ink, steering clear from unsecured Internet sites, and never writing a PIN, password, or Social Security number on credit cards or in briefcases or wallets. Cashiers should be observed as they process an order and personal or account information should not be revealed to anyone without first verifying their identity. Other tips include creating passwords that are not obvious (i.e., do not use birth dates) and checking credit reports periodically for accuracy.
Identity theft affidavit. In many cases, the victim may not realize their identity has been stolen until a negative situation arises. When the crime is finally discovered, the victim must provide proof that they did not create the debt themselves. This involves a laborious process of contacting each and every company where accounts were fraudulently opened. Persons whose identities have been stolen can spend months, even years, remedying the problem. To reduce the burden, the government established the ID Theft Affidavit, a single form that alerts all participating companies about the crime. A number of financial organizations, including the top three credit reporting agencies, endorse the ID Theft Affidavit.
According to the U.S. Federal Trade Commission (FTC) and U.S. General Accounting Office (GAO), the average victim spends anywhere from $1,000 to over $10,000 per incident of identity theft or fraud to reclaim and reestablish identity and credit. Victims of identity fraud should notify all three national credit reporting agencies (Equifax, Experian, TransUnion) immediately and request that their files be flagged with a fraud alert. The crime should also be reported to the police and the FTC, and in some cases, the Social Security Administration, Department of Motor Vehicles, and the U.S. Post Office.
Identity Theft and Assumption Deterrence Act. The threat to privacy has prompted a number of new laws governing fraud. In 1998, Congress passed the Identity Theft and Assumption Deterrence Act. The legislation created a new offense of identity theft, making it a separate crime against the person whose identity was stolen. Prior to this legislation, identity theft was considered a crime only against the company the victim defrauded. Under the Federal identity theft act, it is a crime for any person to "knowingly transfer[ring] or use[ing], without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of Federal law, or that constitutes a felony under any applicable State or local law." Violators face a maximum term of 15 years in prison, a fine, and criminal forfeiture of any personal property used or intended to be used to commit the offense.
ID thieves are often charged with other violations, including credit card fraud, computer fraud, and mail fraud. These felonies can carry substantial penalties and up to 30 years' imprisonment. The Federal Bureau of Investigation (FBI), the United States Secret Service, and the United States Postal Inspection Service help prosecute identity theft cases. Many states have also enacted legislation regarding identity theft. Arizona led the way with a specific identity theft statute passed in 1996. As the crime's serious threat became evident, more states followed suit. In 1999, 22 states passed identity theft legislation. According to a GAO 2002 report, identity theft can be a felony offense in 45 of the 49 states that have laws to address the problem. Two years after the passage of the federal identity theft act, the Justice Department testified that it had used the statute in 92 cases, according to a GAO report.
The Identity Theft and Assumption Deterrence Act required the FTC to "log and acknowledge the receipt of complaints by individuals who certify that they have a reasonable belief" that someone stole their identity. The act enabled the creation of the Identity Theft Data Clearinghouse, a federal database for tracking complaints. Consumers call a toll-free hotline (1–877-ID-THEFT) to enter their complaint, and have the option to do so anonymously. When established in 1999, the FTC logged about 260 calls per week. In December 2001, the hotline was receiving more than 3,000 contacts a week.
Identity fraud complaints and related information are shared electronically between the FTC and other law enforcement agencies nationwide via the Consumer Sentinel Network, a secure, encrypted website. The network was initially set up in 1997 as a way of tracking telemarketing scams. As of May 2002, 46 federal law enforcement agencies and over 18,000 state and local departments had enrolled in the FTC's Consumer Sentinel Network collaboration. Accessing the Network allows police to analyze identity theft cases and determine if there is a larger pattern of crime. At this time, comprehensive results involving the number of cases prosecuted under the federal identity theft act and state statutes are not available.
█ FURTHER READING:
Federal Trade Commission. "ID Theft: When Bad Things Happen to Good People." September 2002. < http://www.ftc.gov/bcp/conline/pubs/credit/idtheft.htm#occurs > (December 11, 2002).
Federal Trade Commission. "Identity Theft." August 7, 2002. < http://www.consumer.gov/idtheft/ >(December 01,2002).
Georgia Stop Identity Theft. "What is Identity Theft?" 2002. < http://www.stopidentitytheft.org/prevention.html#what >(December 01, 2002).
ID Theft Resource Center. "ID Theft." October 28, 2002. < http://www.idtheftcenter.org/ .> (December 01, 2002).
Computer Fraud and Abuse Act of 1986
FBI (United States Federal Bureau of Investigation)
Justice Department, United States Postal Security
Postal Service (USPS), United States
Secret Service, United States