Although identity theft is often heralded as a new crime threat, the phenomenon itself is by no means unique to the information age. Throughout history, criminals have used false identities to commit their crimes. However, as identity theft emerges as a growing crime problem in the 21st century, it has new characteristics which are closely linked with the features of a global and technologically advanced society. The Internet, e-mail, and mobile phone technology have transformed the ways in which we live our everyday lives and, in many ways, have facilitated the criminal enterprise. With all of these changes come new risks and, with them, new challenges. Increasingly, we are required to prove our identities as we interact with others in both real and virtual environments, and the identification process is more important now than it has ever been. Consequently, different aspects of an individual’s identity have themselves become attractive commodities in the criminal world. The emergence of identity theft as a recognized social problem shows how the changing value of personal data in modern society has had an impact on the nature of crime.
Definitions of Identity Theft
There is no single accepted definition of identity theft, and it is common to find broad definitions presented in the media and policy documents. Broadly defined, identity theft occurs when a criminal uses another person’s personal information (such as name, address, social security number, or credit card details) without permission to commit fraud or other crimes. It is often, therefore, referred to as an “enabling offense”—the identifying information is a tool that the criminal needs to commit the “target offense.” The problem with broad definitions, however, is that they ignore the important fact that the target offense can range from simple credit card fraud to the permanent adoption of a false identity and the more complex activities of organized criminal networks. As a result, by treating all offenses where an identity has been misused under one category, we fail to properly understand the motivations and methods of identity thieves. Moreover, there is a danger that we will confuse the quite different impacts on the victims of the enabling versus target offenses.
A better approach is to distinguish between two different types of identity theft. Identity frauds are temporary offenses in which personal data are borrowed to commit a fraudulent offense. Here, the identifying information serves merely as a tool for the criminal to use to commit another offense. The motivation for these offenses tends to be financial, either to obtain goods or services or to establish credit or a loan, and the impersonation is temporary. Identity thefts are cases in which the victim’s entire identity is permanently appropriated (often referred to as “Day of the Jackal” cases). The identity of another individual is “hijacked” by the fraudster with the aim of a permanent appropriation. This may be for financial reasons, for example, to escape an existing record of bankruptcy, or it may be to hide a criminal record or escape a previous life.
Extent of the Problem
Despite repeated claims that identity theft is one of the world’s fastest-growing crimes, relatively little is known about the true extent of identity theft and identity fraud when compared with other crimes. The best estimates come from the United States, which recognized identity theft as a statutory offense in 1998 with passage of the Identity Theft and Assumption Deterrence Act and where a number of national surveys on the subject have been conducted. The Federal Trade Commission administers a central repository for identity theft complaints and, in 2005, reported 255,565 incidences of identity theft, totaling losses of $56.6 billion. However, victim surveys (including the National Crime Victimization Survey) estimate the victimization of between 3 and 4 percent of Americans annually.
In Europe, where identity theft is not yet considered to be a widespread problem, data are scarce. The exception is the United Kingdom, which has recently prioritized identity theft as a serious and fast-growing crime problem in need of urgent addressing. Early estimates from the Home Office suggest that 137,000 people are “affected” by identity theft each year, costing £1.7 billion annually, but there is little evidence to support these claims. Other studies suggest the victimization of 1 in 10 people and as many as 1 in 4 experiencing identity theft (either directly or indirectly).
Studies on both sides of the Atlantic suggest that young people are most vulnerable. In the 2004 National Crime Victimization Survey conducted by the U.S. Bureau of Justice Statistics, households where the head was between age 18 and 24 were significantly more likely to be victimized, as were high-income households. Rural households were less likely to be victimized. U.K. studies concur that people under the age of 30 are most vulnerable.
Impact on the Victims
For each episode of identity theft or fraud, there are multiple victims: the individual whose information is borrowed or appropriated (the primary victim) and any individual, business, or institution that is subsequently defrauded or duped by the perpetrator (the secondary victim or victims).
The primary victim may experience a range of different forms of harm. Although the immediate loss of large sums of money is a commonly held fear, it is actually quite unlikely for the primary victim to be held liable for hefty debts incurred where an identity theft has taken place. More likely is the damage caused to the victim’s credit history, which will have a negative impact on his or her future financial autonomy. Also, the primary victim of identity theft faces the challenge of restoring his or her personal identity profile, a process that can be costly in terms of time and effort. Research shows that the loss of control of personal information is potentially damaging to an individual’s sense of self and quality of life. For the secondary victims, the loss suffered will, more often than not, be directly financial. Indeed, members of the retail, communications, and finance industries are the ones absorbing the costs of identity theft.
In the mid-1990s the United States became the first country to formally recognize identity theft as a crime; other countries have been slow to follow suit. Although identity theft swiftly emerged as a key issue on the crime agendas of governments across the Western world, few have followed the U.S. lead on policy. In the current climate of fear of terrorism, the urgent need for reliable processes and methods of identification is apparent. Government agencies and businesses around the world need to work together to examine the practices of document-issuing authorities and those who are involved in the processing of personal data.
It is important for the responses to the problem to be designed and applied in the appropriate context. In the United States, for example, many tailored responses address the vulnerabilities emanating from an over-reliance on the social security number, which is used as a key identifier in a wide range of public and private transactions. In contrast, the United Kingdom does not currently operate a single-identifier system, and therefore the identity theft problem is more strongly associated with extremely high rates of credit or debit card fraud.
On both sides of the Atlantic, significant efforts have been made to provide education and guidance to citizens and consumers in the fight against identity theft and fraud. Increasingly, individuals are encouraged to develop a more responsible attitude toward their personal data. Credit card holders, for example, repeatedly hear that they should keep their card details and personal identification number (PIN) confidential and to shred or burn their statements and receipts. Businesses, too, receive admonitions to think more seriously about the threat of identity theft and the safety of their customers.
- Cabinet Office. 2002. “Identity Fraud: A Study.” London: HMSO. Retrieved March 24, 2017 (http://www.statewatch.org/news/2004/may/id-fraud-report.pdf).
- Federal Trade Commission. 2005. “National and State Trends in Fraud and Identity Theft (January-December 2004).” Retrieved March 24, 2017 (http://www.popcenter.org/problems/identity_theft/PDFs/FTC_2003c.pdf).
- Finch, Emily. 2002. “‘What a Tangled Web We Weave’: Identity Theft and the Internet.” Pp. 86-104 in Dot.con: Crime, Deviance and Identity on the Internet, edited by Y. Jewkes. Collompton, England: Willan.
- Jones, Gareth and Michael Levi. 2000. “The Value of Identity and the Need for Authenticity.” In Turning the Corner. Foresight Panel. London: Department of Trade and Industry, Office of Science and Technology Crime.
- LoPucki, Lynn. 2001. “Human Identification Theory and the Identity Theft Problem.” Texas Law Review 80:89-136.
- Semmens, Natasha. 2004. “Plastic Card Fraud and Identity Theft: Implications of Data Crimes for the Future of Society, Business and Crime Control.” Contemporary Issues in Law 7:121-39.
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