Identity Theft Laws - How The Legal System Can Protect You

l information to carry out a crime under a false identity.

In 2003, the Federal Trade Commission said that reports of identity theft were up 33% from the year before, that they were aware of over 200,000 cases of identity theft in 2003. States with the most reported cases of identity theft were Arizona, Nevada, California, Texas, and Florida. And for almost three quarters of the fraud cases reported, the use of victims' personal information was used for credit card, phone or utility, or bank fraud. They also found that, on average, the misuse of victims' personal information lasted from three to six months and resulted in a total loss of about $5 billion to victims, plus over 300 million hours of personal time resolving the problems once discovered.

The 2003 FTC Survey reported over $50 billion in losses to business as a result of identity theft. They also reported that, in that year, each victim spent from $500 to $1200 and from 30 to 60 personal hours to have their credit problems resolved. Unfortunately, there is little hope that this trend will decrease in the near future. Identity theft seems to be getting easier, not harder, and the criminals are learning how to hide their crimes from victims longer and to hide their person from law enforcement altogether.

Unfortunately, there is no single database in the U.S. covering identity theft cases, and the Committee suspects that the number of crimes are vastly underreported. Classifying these crimes as identity theft varies from state to state and from police department to police department. The 2003 study revealed that 60% of victims of identity theft had not reported the crime to their police department! Only one in five had even reported the problem to their credit bureau.

Identity theft crimes are investigated at the federal level by federal agencies like the Secret Service and the FBI. The Department of Justice usually prosecutes the cases through a local U.S. Attorneys’ office. In 2000, U.S. Attorneys reported that they had filed over 2000 cases of identity theft across the country (compare this to the 9 million victims per year). That year, the Secret Service made over 3000 arrests, and average actual loses to victims in cases that were closed equaled over $46,000 each. The FBI reported 1425 convictions for identity theft, over a thousand of those for bank fraud. The Postal Inspection Service made a little over 1700 arrests in 2000. Even the IRS reported actual and suspected cases of identity theft in questionable tax returns in 2000, estimating that they had received around 150 thousand fraudulent returns and fraudulent claims for more than $750 million in refunds. Today, the federal government recognizes that identity theft is the fastest-growing financial crime in America.

One reason for the apparently low proportion of prosecutions and convictions for identity theft has been the government's inability to define the specific crimes. In 1998, Congress passed the first law addressing identity theft, the Identity Theft and Assumption Deterrence Act, making identity theft a named federal crime and making it a little easier to prosecute. The Act made the Federal Trade Commission responsible for receipt of complaints and public education about identity theft.

The Identity Theft Penalty Enhancement Act of 2004 established penalties for aggravated identity theft, including those instances where identity theft was used to commit more serious crimes. The Fair and Accurate Credit Transactions Act of 2003 amended the Fair Credit Reporting Act to address identity theft and related consumer issues, making it possible for victims to work with creditors and credit bureaus to remove negative information due to identity theft in their credit report. The Internet False Identification Act of 2000 amended the older False Identification Crime Control Act of 1982 to encompass computer-aided false identity crimes. Violators face fines and/or imprisonment for producing or transferring false identification documents.

Experts encourage people to be proactive in taking steps to prevent and discover identity theft. Clearly, keeping it from happening in the first place is far less stressful than trying to resolve issues after identity theft crimes are committed. Here are a few of the things you can do to protect your personal financial information from identity theft criminals:

- Secure your personal information at all times. Don't leave lists of account numbers unlocked, and don't share your user IDs or passwords with ANYone. Maintain as much control over your personal financial information as you can.

- Don't throw mail away if in contains any personal information, including your full name and address. Shred these documents before putting them in the garbage.

- Educate yourself about the techniques and tactics used in identity theft and protect yourself accordingly.

- Don't share personal account information with anyone, including co-workers, friends, and roommates. Unless they are also responsible for paying your bills, they have no reason to have this information. And don't give them your passwords without a very good reason. If you do share your passwords, change them as soon as possible.

- Shred unwanted and pre-approved credit applications, and have your name removed from those mailing lists.

- Be careful when you make purchases online to use only secure servers and to carefully guard your information. Do not keep a written list of passwords, and use passwords that are difficult to figure out (rather than something simple like your phone number).