In 2003, The Washington Post reported identity fraud was the No. 1 consumer fraud complaint to the Federal Trade Commission. Almost a decade later, in 2011, it again topped the consumer watchdog agency’s list of complaints. Because of the immediate damage such fraud can cause to people who have been targeted, as well as its long-term impact, punishment for the offenders has increased at the local and national level.
Identity Fraud Definition
Identity fraud, in addition to identity theft, refers to any kind of crime in which someone steals another person’s personal and private information, such as a credit card number or a Social Security number, and then uses that information for personal gain. Typically, it’s for economic gain, according to the Department of Justice. Impostors can obtain someone’s personal identifiers in the most hard to imagine – and the most overlooked – ways, such as a rental property application that a property manager fails to dispose of properly. Phishing and spyware are also associated with identity fraud.
Identity Theft Acts
In 1998, Congress passed the Identity Theft Protection Act, making identity theft a federal crime. Six years later, then-president George W. Bush signed into law the Identity Theft Penalty Enhancement Act. The Enhancement Act makes offenders face penalties if they are guilty of “aggravated identity theft,” in which they knowingly and illegally transfer, possess or use someone’s means of identification. The Enhancement Act adds two or more years to whatever prison sentence offenders incur as a result of a crime related to the identity theft, such as mail fraud. Additional sentencing depends on their crime; the intention to commit a terrorist act using the stolen personal data would get five years added, for instance.
There are various state laws regarding identity fraud. States may classify these kinds of crimes differently – misdemeanor versus felony or class B versus class D felonies. As a result, the exact punishment will vary. In California, for instance, a misdemeanor charge can carry a punishment of up to one year in county jail. On the other hand, a felony can carry a punishment of imprisonment in state prison for at least 16 months. In New York, it’s considered a first-degree crime, or a class D felony, if the offender steals or causes financial loss of at least $2,000. Conviction can lead to up to seven years behind bars.
Under the Identity Theft and Assumption Deterrence Act, identity theft offenses can carry a maximum term of 15 years' imprisonment and a $250,000 fine. According to the DOJ, so-called schemes to commit identity fraud, such as credit card fraud and financial institution fraud, are federal offenses and felonies that can carry penalties of up to 30 years' imprisonment. To cite a DOJ example, a man in California who pleaded guilty to federal charges was sentenced to 27 months' imprisonment for stealing bank account information about a company’s customers, then using it to deposit nearly $800,000 in counterfeit checks.
- The Washington Post: Bush Signs Identity Theft Bill
- Identity Guard: Identity Theft Again Leads the List of Consumer Complaints Reported to the Federal Trade Commission
- Department of Justice: Identity Theft and Identity Fraud
- The New York Times: Applications and Identity Theft
- Identity Theft Awareness: Punishment for Identity Theft
- Identity Theft Resource Center: State Resources
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