Identity Theft

• Author: Jeffrey Lehman, Shirelle Phelps

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IDENTITY THEFT is the assumption of a person's identity in order, for instance, to obtain credit; to obtain credit cards from banks and retailers; to steal money from existing accounts; to rent apartments or storage units; to apply for loans; or to establish accounts using another's name. An identity thief can steal thousands of dollars in a victim's name without the victim even knowing about it for months or years. Identity thieves are able to accomplish their crimes by doing things such as opening a new credit card account with a false address, or using the victims's name, date of birth, and SOCIAL SECURITY number. When the thief uses the credit card and does not pay the resulting bills, the delinquent account is reported on the victim's credit report.

As increasing numbers of businesses and consumers rely on the INTERNET and other forms of electronic communication to conduct transactions, so too is illegal activity using the very same media on the rise. Fraudulent schemes conducted via the Internet are generally difficult to trace and to prosecute, and they cost individuals and businesses millions of dollars each year.

According to a JUSTICE DEPARTMENT web site devoted to the topic, INTERNET FRAUD refers to any type of scheme in which one or more Internet elements are employed in order to put forth "fraudulent solicitations to prospective victims, to conduct fraudulent transactions, or to transmit the proceeds of FRAUD to financial institutions or to others connected with the scheme." As pointed out in a report prepared by the National White Collar Crime Center and the FEDERAL BUREAU OF INVESTIGATION (FBI), "The Internet Fraud Complaint Center (IFCC) 2001 Internet Fraud Report: January 1, 2001? December 31, 2001," major categories of Inter-net fraud include, but are not limited to, auction or retail fraud, SECURITIES fraud, and identity theft.

Securities fraud, also called investment fraud, involves the offer of bogus stocks or high-return investment opportunities, market manipulation schemes, pyramid and Ponzi schemes, or other "get rich quick" offerings.

In its May 2002 issue, Internet Scambusters cited a study by Gartner G2 showing that online merchants lost $700 million to Internet fraud in 2001. By comparison, the report showed that "online fraud losses were 19 times as high as offline fraud." In fact, the study pointed out that

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in the same year more than 5 percent of those who made purchases via the Internet became victims of credit card fraud.

The IFCC, in its 2001 Internet fraud...