PRESIDENT GEORGE BUSH, 2004 (REMARKS WHEN SIGNING THE IDENTITY THEFT PENALTY ENHANCEMENT ACT)
The Nature of the Problem and How Many People Experience Its Aggravations
Throughout history, people seeking to evade cap- ture have used disguises, false papers, and aliases to pass themselves off as someone else. Spies, sabo- teurs, infiltrators, terrorists, and fugitives from jus- tice used fictitious histories, documents, and résumés to fool authorities. But now computer databases and high-tech devices provide incen- tives for impersonators for a different reason: monetary gain.
The relatively new, increasingly sophisticated, and surprisingly common white-collar crime of identity theft arises from the illegal appropriation of someone’s personal information—such as the individual’s name, address, date of birth, Social Security number, and mother’s maiden name. Identity fraud is defined as the unauthorized use of another individual’s personal information to try to achieve illicit financial gain. Identity thefts are measured as attempted as well as successful misuses of these personal identifiers to loot an existing account (for example, a bank savings or checking account) or to open a new account (for instance, with a telephone or credit card com- pany), plus impersonations for other fraudulent purposes (such as to collect undeserved govern- ment benefits like someone else’s income tax refund) (Javelin Strategy and Research, 2011; and Langton and Planty, 2011).
Even though identity theft is a relatively new type of offense, it draws upon traditional interper- sonal crimes such as pickpocketing, thievery, rob- bery, and burglary of wallets as well as established white-collar crimes like forgery, counterfeiting, fraud, and impersonation. For example, those who steal cars might be able to parlay a vehicle theft into an identity theft if the driver left a copy of the license or registration in the glove compartment and a laptop, smartphone, briefcase, or wallet in the trunk (ITRC, 2014a). Cutting-edge criminals increasingly commit their offenses online by compromising other people’s existing Internet accounts (such as Amazon, eBay, and PayPal). These high-tech fraudsters also engage in account
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takeovers in which they add new properties to somebody else’s existing utility account (such as for a smartphone) and run up huge unauthorized charges for premium services (Javelin, 2014).
No one is immune from being preyed upon, not even the most wealthy and privileged, as the following example shows.
A purse, containing a checkbook and a Social Security card, is swiped from the wife of the chairman of the Federal Reserve Bank while she is sitting in a coffee shop. Months later, a woman is arrested who uses wigs to impersonate her victims when cashing bad checks and draining their accounts. It turns out that she is part of a sophisticated ring that defrauded more than $2 million from hundreds of people who banked at 10 financial institutions. (Lucas and Melago, 2009)
Victims of identity theft were discovered dur- ing the 1990s when nearly all state legislatures criminalized the unlawful possession of personal identification information for the purposes of committing fraud. Hearings held by congressional committees during the 1990s revealed that police departments usually did not view individuals whose identities were appropriated by fraudsters as actual victims, since the immediate monetary losses usually were incurred by credit card compa- nies, not account holders. In 1998, Congress passed the Identity Theft and Assumption Deter- rence Act. The legislation made it a federal crime to knowingly transfer and use any name or num- ber without lawful authority in order to commit or aid and abet any illegal activity. The law not only imposed stiff sentences and fines on those who committed this new federal offense but also stipulated that the impersonated individual was a crime victim deserving of financial protection and entitled to reimbursement via court-ordered resti- tution obligations imposed on convicted thieves. However, a persistent problem is that this crime often goes unreported, uninvestigated, and/or unsolved. In 2000, the International Association of Chiefs of Police (IACP) urged police depart- ments that were reluctant to accept complaints to
revise their policies and provide incident reports and other forms of assistance to impersonated individuals (Newman, 2004). A provision of the Fair and Accurate Credit Transactions Act of 2003 enabled customers to get one free credit report each year (from www.annualcreditreport .com) so they can check for any suspicious activity in their accounts at the three major companies. Congress authorized the Department of Home- land Security to get involved when it passed the REAL ID act in 2005 (NCJRS, 2005; Kelleher, 2006; and President’s Task Force, 2007). State laws require companies and agencies to notify their customers and clients so that they can be vigilant whenever the personal information in their records is stolen by hackers.
Reports of ID thefts do not wind up in the tallies of incidents known to the police in any category of Part 1 of the FBI’s UCR. Although the huge grouping entitled “larceny-theft” includes all kinds of acts of stealing, whether petty or grand larcenies, it specifically excludes aspects of identity thefts that appear in Part 2 (but only if there is an arrest), such as embezzle- ments, forgeries, check frauds, and confidence games and other scams (Velasquez, 2013). In other words, because of outdated definitions, acts of stealing carried out by breaking a window or snatching an unguarded purse are counted, while incidents of stealing perpetrated by using a skimmer, a keyboard, or a spyware program are not counted as larceny-thefts.
Several problems continue to undermine the effectiveness of efforts by law enforcement agencies to come to the aid of identity theft victims. First, many officers lack necessary training, and their departments lack the needed resources to provide an adequate response. Second, multijurisdictional complications undercut an agency’s commitment to follow through on a complaint. When a victim in one city reports to a local police department that a thief has stolen personal information and is carry- ing out fraudulent financial transactions in another city, state, or country, which law enforcement agency bears primary responsibility for seeing the investigation through to completion?
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If the authorities seem unsympathetic, betray skepticism, and appear reluctant to officially file their complaints and take action, victims under- standably get upset. They sense that they are being suspected of wrongdoing as they fill out forms that must be notarized, telephone merchants who are demanding payment, fend off collection agencies, and write lengthy explanations to credit rating bureaus. They bear the burden of proof and are held financially responsible unless and until they can establish their innocence and clear their names.
Because law enforcement countermeasures are not yet effective, identity snatchers know that the risks of apprehension, conviction, and punishment are relatively low, while the returns are potentially high. These crimes are difficult, time-consuming, and expensive to investigate, especially when mul- tiple jurisdictions are involved. In fact, offenders exploit these problems by misusing the stolen infor- mation far from the original crime scene, preferably in another county, state, or country (Collins and Hoffman, 2004).