Identity theft is “the obtainment and fraudulent use of another person’s personal information, which can be relatively innocuous or much more serious” (May & Headley, 2004). Roberson (2008) explains that identity theft is not really a violent offense, yet its victims often feel as if their world was ending. He briefly defines identity theft as “the misuse of another individual’s personal information to commit fraud or theft” (Roberson, 2008, p.1). This crime is the U.S. fastest growing crime, based on the data provided by the National crime Prevention Council (Haygood & Hensley, 2006).
Often, the term identity fraud is used interchangeably to refer to identity theft. In the form of credit card fraud, identity theft is the most widespread today; besides, identity theft is present in all terrorist plots/activities against the United States (Hoffman & McGinley, 2010, p.115). In relation to this, in the literature on domestic security identity theft is described as a crime that is typically committed for the purposes of facilitating other crimes: credit crime fraud, employment fraud, document fraud, which negatively affect the nation’s economy and security (Finklea, 2012).
The history of identity theft is quite old. According to Hoffman & McGinley, identity theft is a new name for the crime that is age old (Hoffman & McGinley, 2010, p.5). The earliest accounts of this crime were a type of impersonation. In legal terms, fraudsters would imitate another people for the purposes of defrauding others to get personal gain. Impersonation through imitation of the person’s look was, with time, replaced by forgery of identification documents. With the development of technology, identity theft took on the new form and evolved into the fastest growing crime. Historically, the following examples of identity theft were fixed: in Biblical writings, in the book of Genesis, Jacob imitated his brother in order to inherit the estate; in the Middle Ages, an English physician John Aylmer fled to France and lived under the name of Jack Cade to avoid being tracked by English authorities who accused him of murdering his mistress; Sarah Wilson, a convict from Great Britain who was sent to the colonies (Maryland) instead of death sentence, forged her identity and pretended to be the sister of Queen Charlotte, which helped her to get money and gifts from aristocrats; Anastasia Romanova, the youngest daughter of the last Russian tsar, who together with his family was executed by the Bolshevik police back in 1918, was often imitated, too (Hiffman & McGinley, 2010, p.9).
Today identity theft is known to take a lot of guises, yet all of it is first and foremost related to loss of privacy. In the recent years, fraudsters developed numerous ways of getting personal information from the Internet, either hacking the proprietary data services or simply using Facebook data, which is freely available. With reference to this, as Roberds & Schreft (2009) distinguish, the crime of identity theft takes on two major guises: existing account fraud and new account fraud. The former is used when the data from an existing credit card is used to get the money illicitly; the latter refers to the situation when criminals use other people’s data to open new accounts in the name of their victim (Roberds & Schreft, 2009).
The scope of the crime is very big and it is growing even bigger with every day. The first research into the scope of the problem was carried out back in 2003, as ordered by the Federal Trade Commission. The level of people who suffered from the identity fraud was estimated at 4.6 per cent. According to the data provided by the Federal Trade Commission, identity thieves stole approximately 49.3 billion U.S. dollars from American citizens back in 2006. FTC 2006 Identity Theft Survey, based on interviews of 4, 916 people, discovered that 3.7 per cent of U.S. consumers had been victims of identity theft in 2005 (Anderson, Durbin, & Salinger, 2008, p.9) (See Table 1). The recent data on identity theft, as provided in the 2012 CRS Report for U.S. Congress, is that 8.1 million U.S. citizens were the victims of this crime. The average victim of identity fraud incurred $631 in costs as a direct result of the crime (Finklea, 2012).
Tasked with effective reduction of identity theft and its impact, the U.S. policymakers have generally responded with a series of administrative and legislative actions which aim at curtailing this crime. Back in 1998, the legislation was enacted by Congress that named identity theft a federal crime (P.L. 105-318). The U.S. Patriot Act was passed in the wake of the terrorist attacks of September 11, 2001; the Act made it more complex for impersonators to open bank accounts. Later, Congress passed FACTA or the Fair and Accurate Credit Transactions Act of 2003(P.L. 108-159) and provided for enhanced penalties that applied to aggravated identity theft (P.L. 108-275). In 2007, the recommendations of the President’s Identity Theft Task Force were issued. They aimed at combating the crime through including legislative recommendations to close gaps of identity theft control in the federal criminal statutes. At present, each of 50 U.S. states has laws that make identity theft a crime; at least, 23 of them imposed new requirements on institutions and businesses as a step to protect the personal data of consumers. At the same time, the scope of the problem and its alarming growth calls for a great deal work to be done in the immediate future. The challenge is to develop right policies: those that protect consumers and at the same time allow access to information for people who can legitimately use it. It is also important to place emphasis on preventative measures.
- Anderson, K., Durbin, E., & Salinger, M. (2008). Identity theft. Journal of Economic
Perspectives, 22 (2), 171-192.
- Haygood, R. & Hensley, R. (2006). Preventing identity theft: New legal obligations for business.
Employment Relations Today, 33 (3), 71-83.
- Hoffman, S. & McGinley, T. (2010). Identity theft: A reference handbook. ABC-CLIO.
- Roberds, W. & Schreft, S. (2009). Data security, privacy, and identity theft: The economics
behind the policy debate, Economic Perspectives, 33 (1), 22-30.
- Roberson, C. (2008). Identity theft investigations. Kaplan Publishing.