White-Collar Crime - Identity Theft

The incidence of identity theft has risen significantly since 1999, making it one of the fastest-growing and most difficult to prevent types of crime. Thieves steal personal information from victims, such as their social security, driver's license, credit card, or other identification numbers, and then set up new bank or credit card accounts or otherwise misrepresent themselves as their victims to fraudulently obtain money. There is no central office keeping track of identity theft. There are, however, several different federal agencies—including the Federal Trade Commission (FTC) and the Social Security Administration's Office of the Inspector General—and three private consumer reporting agencies which compile figures.

The FTC was required by the Identity Theft Act to form the FTC Identity Theft Hotline and Data Clearing-house in 1999 to track incidents of this type of crime. In 1999 there were 445 calls per week to the Hotline. By June of 2001 the number of callers to the hotline had increased to 1,800 per week, a rise of about 400 percent. Total identity theft complaints received by the FTC rose from 86,212 in 2001 to 214,905 in 2003, an increase of about 150 percent in two years. Identity theft is the most common consumer fraud crime reported to the FTC, accounting for 42 percent of all such crimes.

In 2003 personal information stolen from identity theft victims was used to set up new or misuse existing credit card accounts in 33 percent of the cases. Other identity theft crimes include unauthorized use of telephone, utility, and other communications services (21 percent), bank fraud (17 percent), and employment-related fraud (11 percent). (See Table 7.1.) By 2003, 8 percent of victims reported an identity theft that resulted in the forging of a government document, such as a driver's license or social security card. About 19 percent of victims reported that they had experienced more than one type of identity theft. This accounts for the reported percentages exceeding 100 percent.

In 2003 28 percent of identity theft victims were between 18 and 29 years old, 25 percent were 30 to 39 years old, and 21 percent were from 40 to 49 years old. Those under the age of 18 and over 60 were the least likely to be targets of identity theft. (See Figure 7.1.)

According to the FTC, about 21 percent of callers to the Identity Theft Hotline reported having a personal relationship with the suspected offender. Nearly 10 percent of identity theft victims reported a family member as the suspect. Roommates and co-habitants were identified as suspects by less than three percent of callers.

Most callers to the Identity Theft Hotline stated that they did not know how their identities were stolen, and most did not discover the theft until one year after their personal information began to be misused. Victims of identity theft were sometimes unable to obtain credit or financial services, telecommunication services, or utility

TABLE 7.1
How victims' information is misused in identity fraud cases, January 1–December 31, 2003

Theft subtypes	Percent of all victims	Theft subtypes	Percent of all victims
Credit card fraud: 33%		Government documents or benefits fraud: 8%
New accounts	19.2%	Fraudulent tax return	3.7%
Existing accounts	12.0	Driver's license issued/forged	2.3
Unspecified	1.4	Government benefits applied/received	1.3
		Social Security card issued/forged	0.4
Phone or utilities fraud: 21%		Other government docs issued/forged	0.4
Wireless—new	10.4%	Unspecified	<0.1
Telephone—new	5.6
Utilities—new	3.8	Loan fraud: 6%
Unauthorized charges		Business/personal/student loan	2.3%
to existing accounts	0.6	Auto loan/lease	2.0
Unspecified	0.8	Real estate loan	1.0
		Unspecified	0.3
Bank fraud: 17%
Existing accounts	8.2%	Other identity theft fraud: 19%
Electronic fund transfer	4.8	Other	11.6%
New accounts	3.8	Illegal/criminal	2.1
Unspecified	0.5	Medical	1.8
		Internet/e-mail	1.7
Employment-related fraud: 11%		Apartment/house rented	0.9
Employment-Related Fraud	11.1%	Bankruptcy	0.3
Attempted identity theft: 8%		Insurance	0.3
Attempted identity theft	8.0%	Property rental fraud	0.2
		Child support	0.2
		Securities/other investments	0.2
		Magazines	0.1
*Percentages are based on the 214,905 total victims reporting. Percentages add to more than 100 because approximately 19% of victims reported experiencing more than one type of identity theft. All victims reported experiencing at least one type of identity theft.
SOURCE: "How Victims' Information Is Misused, January 1–December 31, 2003," in National and State Trends in Fraud and Identity Theft January–December 2003, Federal Trade Commission, Washington, DC, January 22, 2004

services as the result of credit problems arising from the identity theft.

The Social Security Administration (SSA) reports that in 1998 some 11,000 complaints were received about misuse of social security numbers. In 2001 the number of complaints had risen to about 65,000. An SSA review concluded that about 81 percent of these incidents of misuse involved identity theft.

Identity theft is also used by illegal aliens. Each year thousands of aliens are stopped at the border for attempting to enter the country by using counterfeit or fraudulently obtained identity documents. The Immigration and Naturalization Service (INS) reports that 99,171 fraudulent documents were seized by their inspectors in 1998, with 114,023 being seized in 2001. The most common documents are border crossing cards and alien registration cards. To counter this trend, the Enhanced Border Security and Visa Entry Reform Act of 2002 called for all U.S. travel and entry documents to be machine-readable and contain biometric identifying information.