l information to carry out a crime under a false identity.
In 2003, the Federal Trade Commission said that reports of identity theft were up 33% from the year before, that they were aware of over 200,000 cases of identity theft in 2003. States with the most reported cases of identity theft were Arizona, Nevada, California, Texas, and Florida. And for almost three quarters of the fraud cases reported, the use of victims’ personal information was used for credit card, phone or utility, or bank fraud. They also found that, on average, the misuse of victims’ personal information lasted from three to six months and resulted in a total loss of about $5 billion to victims, plus over 300 million hours of personal time resolving the problems once discovered.
The 2003 FTC Survey reported over $50 billion in losses to business as a result of identity theft. They also reported that, in that year, each victim spent from $500 to $1200 and from 30 to 60 personal hours to have their credit problems resolved. Unfortunately, there is little hope that this trend will decrease in the near future. Identity theft seems to be getting easier, not harder, and the criminals are learning how to hide their crimes from victims longer and to hide their person from law enforcement altogether.
Unfortunately, there is no single database in the U.S. covering identity theft cases, and the Committee suspects that the number of crimes are vastly underreported. Classifying these crimes as identity theft varies from state to state and from police department to police department. The 2003 study revealed that 60% of victims of identity theft had not reported the crime to their police department! Only one in five had even reported the problem to their credit bureau.
Identity theft crimes are investigated at the federal level by federal agencies like the Secret Service and the FBI. The Department of Justice usually prosecutes the cases through a local U.S. Attorneys’ office. In 2000, U.S. Attorneys reported that they had filed over 2000 cases of identity theft across the country (compare this to the 9 million victims per year). That year, the Secret Service made over 3000 arrests, and average actual loses to victims in cases that were closed equaled over $46,000 each. The FBI reported 1425 convictions for identity theft, over a thousand of those for bank fraud. The Postal Inspection Service made a little over 1700 arrests in 2000. Even the IRS reported actual and suspected cases of identity theft in questionable tax returns in 2000, estimating that they had received around 150 thousand fraudulent returns and fraudulent claims for more than $750 million in refunds. Today, the federal government recognizes that identity theft is the fastest-growing financial crime in America.
One reason for the apparently low proportion of prosecutions and convictions for identity theft has been the government’s inability to define the specific crimes. In 1998, Congress passed the first law addressing identity theft, the Identity Theft and Assumption Deterrence Act, …