"But he that filches from me my good name/Robs me of that which not enriches him/And makes me poor indeed," - Shakespeare, Othello.
Identity theft or fraud is a process of deliberate use of an individual's identity for personal gains. Stealing an identity enables the impersonator to appropriate funds from the victim's accounts and credit cards, use the social security number to get loans, obtain confidential medical information, file for bankruptcy, get jobs, and even commit crimes that range from traffic violations to serious offenses. Victims not only suffer identity and monetary losses but also undergo the trauma of being in constant fear of being robbed again.
Although there are many different ways of committing an identity fraud, the motive is always the same ― personal and economic gain. The following are some of its types.
Character Identity Theft
When someone impersonates you and commits a crime, it's called character identity theft. Often this is the most difficult to trace, as all the crimes are committed in your name.
Driver's License Theft
Here someone could steal your driver's license number and commit traffic-related offenses, as a result of which, you could end up paying for crimes you didn't commit, by way of loss of motor insurance, a suspended drivers license, etc.
Social Security Number (SSN) Theft
Your SSN can be used to get a job in a fraudulent manner, resulting in your loss of unemployment benefits or being charged with tax frauds, or for not paying taxes on 'all' income earned.
Medical Identity Theft
When your identity is stolen to obtain medical insurance or benefit from the existing one, it is called medical identity theft. You could lose your health coverage because of the faulty information in your medical record.
This is the most common and prevalent identity theft, wherein your credit facility is used to obtain money, services, and products and you are left with pending bills and a history of bad credit record.
How does it Happen?
In our daily activities, there are many instances where our identity could be stolen, some of which are listed below:
This fraud occurs when you hand over your card to a service provider. This person supposedly takes your card out of your sight, on the pretext of processing it, and uses a device to copy the encrypted information on your card. This information is then replicated and a duplicate credit card, bearing your name is made and used to run credit.
Posing as a personnel of a credit consolidation company offering you a credit card, they obtain from you some personal information and processing fee. Then, as soon as you pay them, they disappear.
Mostly using a cell phone camera, the thief obtains your account number and PIN, while you are performing an ATM or credit card transaction.
Here, the thief goes through your garbage and collects cash receipts, financial and credit card statements. Sometimes he also uses a pre-approved credit card offer, found in your dustbin and applies for it.
The easiest place to be robbed, either by using e-mail hoaxes, viruses, or by hacking into your systems, while you are performing a transaction.
To combat the growing menace of identity theft, President Bush signed a legislation in July 2004, amending The Identity Theft Penalty Enhancement Act, establishing more penalties, (in addition to the existing punishments) for identity theft and related offenses. The act added two years to prison sentences for "knowingly transferring, possessing, or using, without lawful authority, a means of identification of another person" during and in relation to specified felony violations, and five years for using the stolen identity for 'terrorist acts', both domestic and international.
All credit card and other appropriation-related cases are handed to the Department of Justice for investigation and prosecution. The act also directs the U.S. Sentencing Commission to review and amend its guidelines and policy statements, to ensure that the guideline offense levels and enhancements appropriately punish the offenses that involve an abuse of position.
The Department of Justice, along with other government organizations, works towards prosecuting such cases under varying federal statutes. Federal laws include credit, criminal, privacy, and information security, whreas state laws include social security number, criminal, credit information blocking, and fraud alerts. Some of these offenses carry penalties as high as 30 years of imprisonment or fines.
Penalty and Punishment
The punishment for stealing an identity is getting tougher by the day. Many laws specific to different kinds of identity theft have been enacted. Information on the penalties as per the Identity Theft Penalty Enhancement Act, is also posted on the various government sites. Below are some of the punishments one could attract:
- Penalties have been increased by five years up to twenty five years maximum, for anyone stealing an identity for the purpose of committing a terrorist act, either international or domestic.
- Under Federal law, all penalties have been increased from 3 to 5 years.
- An increase in two years for anyone who commits aggravated identity theft, in order to commit other Federal felonies.
In this age of advanced technology, one's personal and financial information is not safe and people will always be at risk of having their identity stolen. Some precautionary measures such as not giving out personal information, ensuring privacy while performing a card transaction, shredding all unwanted bills, receipts and statements, monitoring your account transactions as frequently as possible etc., can help in protection of vital information.
While the laws prohibiting identity theft are in place, it helps to be proactive and bring any discrepancies to the notice of the law enforcing agencies and your banks.