History of Identity Theft

With advancements in technology happening annually after the digital revolution there is less privacy in the world. These advancements create a greater risk of personal information to be exploited or taken. From the years of 2010 to 2016 identity theft cost Americans one hundred twelve billion United States dollars (Crane, 2016). People lack the knowledge to prevent and mitigate the consequences of identity theft which causes more financial and personal turmoil in their lives.

History of Identity Theft

According to the Merriam-Webster’s Dictionary the definition of identity theft is defined as, “the illegal use of someone else's personal information (such as a Social Security number) especially in order to obtain money or credit” (Merriam-Webster’s, 2018).

Identity Theft Cycle

Each person affected by identity theft on average spends fifteen hundred united states dollars of out-of-pocket cost and 175 hours per incident of identity theft to resolve issues. 8% increase in identity theft cases from 2016 to 2017 according to Javelin Strategy & Research (Identity Theft, 2018). In 2017 16.7 Million Americans were affected with around $16.8 billion being stolen by the criminals.
The identity theft cycle has three stages in which a perpetrator gathers and waits to use information. These stages make it possible to minimize the risk of being caught and are the reason why identity theft is successful.These stages are as follows: Discovery, Action, and Trial.The discovery stage is when the perpetrator gathers potential personal information of a person. As the information is accumulated it is systematically checked for authenticity. During this stage the person who is being targeted normally has no idea that their information is being stolen (Albrecht, C., Albrecht, C., & Tzafrir, S., 2011).

For the second stage, action, it is a two part process. The first step is getting documentation from the information discovered in stage 1, this documentation can include false credit cards and driver’s license. The second part of this stage is to ensure that there is less possibility of being caught by providing some created or personal aspects of the identity, like address or email. This would be important if the victims was ever to be contacted, which would instead actually contact the fraudster (Albrecht, C., Albrecht, C., & Tzafrir, S., 2011). The last stage, trial, is the most profitable stage for the fraudster. There are three phases in which in each the confidence and financial gain for the scammer increase by a degree. First dimensional is to test if the information will work in the world; this can be simple credit card purchase. If successful in the first tests, then the perpetrator knows that the information can be used on more expensive objects. If the initial test is a failure then the perpetrator cuts his losses and discreetly disposes of the faulty information. The second dimension is when the fraudster has more confidence in the credibility of the information.

In this phase the fraudster moves to buying more expensive merchandise; this ranges from electronics to clothing. An important factor of this phase is that the fraudster is participating in face to face interaction to make these purchases, normally the first time where this would happen. If the second phase is successful, then scammer has enough confidence to target critical financial areas. The scammer could decide to open a new bank account or take out a loan, actions that would result in financial loss for the victim and possible irreversible credit damage (Albrecht, C., Albrecht, C., & Tzafrir, S., 2011). During this 3rd dimensional phase of stage three, the scammers are most vulnerable of being caught than any other part of the cycle. After the scammer is done with the 3rd stage the cycle continues and restarts with discovery.

Identity Theft

With the right knowledge identity theft can be prevented. Certain types of information can be singled out for different motives. It is also easier to get information from habits of persons and those are the reasons why they can be targeted.

There are different types of identity theft. These are the reasons on why someone would use someone else’s personal information. Each of the types is for a specific purpose and target different aspect of life.
Medical identity theft is the stealing of medical information. This can be used to use insurance or other medical information about the person.

Tax identity theft is the use of information in order to receive fraudulent money back in tax returns. Employment tax returns is using a social security number to gain employment. This can be used to get a tax ID this is most commonly used by undocumented immigrants.
Synthetic identity theft is creating a profile of a fake person with the personal information of someone. These profiles make it harder to detect the fraud, making it easier to use and exploit for personal gain.
Credit card numbers and information can also be taken and transcribed to be used in a transaction without ever needing the physical card. These types of fraudulent transactions are called, “Card-not-present Fraud” and it is 81% more common than it was five years ago, due to the advancement of the internet(Dempsey, 2008).

Scammers can gain personal information to initiate their identity theft in different ways. Most of these ways gain information by having the user personally input their information, making the burden on the user to prevent this issue as long as there is awareness of these tactics.
Physical. Any sort of physical identity theft requires the scammer to be personally there to access any sort of your information, this means that they are relatively close in proximity to the persons who information that is stolen.

Theft of wallets is an easy way for the perpetrator to gain access to a person's personal information through their driver’s license, credit cards, and any sort of other identification that is carried in a wallet or purse that they can sell or use themselves.
Identity thieves can also steal information by dumpster diving, going through the garbage in hopes of finding discarded information from households and businesses. Although in households people may normally shred any sensitive information that cannot always prevent the theft from happening since, “certain businesses are especially vulnerable to dumpster diving. These include hotels, rental car companies and others that swipe credit cards for reservations and then discard, rather than destroy the copies” (Di Ciccio, n.d., p. 2).

Skimming is a type of physical identity theft in where the identity thief makes a clone of a credit card. The credit card cloning is accomplished with an electronic device called a skimmer that takes the electronic signature of the card that can be used in different transactions being perceived as the original. These devices can be purchased easily online and are not hard for someone to get access to if they try hard enough.
Digital. Ways of scammers getting personal information through digital means can happen anywhere over the globe .

These methods require the user to almost voluntarily put their information at risk. An example of this is any phishing scheme. In this the user is sent information through mostly email where they are asked to put in their username and password to enter a site. These emails on the surface seem trustworthy and authentic, but are fake and a method of a identity thief to gain your login information.

Spamming is when on a internet browsers a user clicks to download a file or attachment, which consequently instead installs malware on their PC. Malware is any “hostile, intrusive, and intentionally nasty, malware seeks to invade, damage, or disable computers, computer systems, networks, tablets, and mobile devices, often by taking partial control over a device’s operations”("Malware," n.d.), with this installed on a computer is can access any range of personal information that is saved or will be inputted in the future.
Another form of malware that can put a personas computer at risk is a keylogger that keeps track of all of the key inputs put into a computer, this is a more covert form of malware that the user may not be aware is even in place.

Pharming is a way for frauders to redirect internet traffic from a offical website to a fake one. These types of attacks on personal information are normally conducted on sites like banking sites, were the fake site can track what information was put in or the account and then have all the information to log in to the real site under the users account (Di Ciccio, n.d., p. 3).

Primary Demographic

Anyone can be a target to identity theft, as long as you have a bank account or social security number you are at risk; however some individuals are at a greater risk than others. People over the age of fifty are at an increased risk than anyone who would be eighteen to fifty. There are a multitude of reasons for this. These individuals are less savvy on the internet, making it harder to secure their information on the digital landscape. They are also less likely to realize early on if their information has been compromised and being used, since they might check their account information and email less often than a younger individual. Besides the older group of persons who are at risk, children are just as easy to exploit for individuals looking for personal information.

Child identity theft occurs when an imposter uses a minor’s SSN for his personal gain. The Social Security numbers of children are valued because they do not have any information associated with them, this means that there is a clean history associated to their SSN so that a thief can attach every name and date of birth to their records. Thieves can establish lines of credit, obtain driver’s licenses, or even buy a house using a child’s identity, and this fraud can go undetected for years, as usually parents don’t check their children’s credit, so they don’t discover the problem until years later. This is possible because when someone applies for, say, a loan, usually the banks check if that SSN has a good credit history. They don’t check if the name is associated to that SSN because the government charges a fee to do that and most banks don’t want to pay (Di Ciccio, n.d., p. 11).

According to the study by the Carnegie Mellon Cylab in 2014 child identity theft is on the rise and only increasing. A staggering 10.2% of children that are under the age of eighteen had their personal information compromised and was being used by other individuals. This statistic is contradiction to the .2% of adults who have their information compromised (Oldshue, 2014). Children or elderly people with full-time caregivers are an easy target for identity thieves as well. This is because of the caregivers being in a position to steal the information while being in the home. That does not mean that all caregivers are out to steal information, but it should be known that there is a higher risk for them being able to. The resulting impact that the type of credit and damage that can be done with the child’s fresh personal information can be damaging and a stain on their record that can follow them for the rest of their lives.

Even though the targeting of children for personal information is a scary thought it is not the only group that is normally targeted as easy candidates for stealing information from. Social media users should be careful what they put online about themselves. It can also be easy to steal the information stored in their account by using spoofing tactics to obtain their username and passwords and impersonate the user. People who own a business can be high risk targets for identity theft as well. This is because of their access to information and information they might have that could be valuable for someone to either sell or steal.

This information can be tied to their accounts or the employee data that they have which would include the utmost important information about that person. College students are at a high risk for identity theft as well. Most of the people in that category are not as diligent in checking their account information or being secure with personal data. This makes it easier for the fraud to go unnoticed longer. Personnel in the military are targets for identity theft, “in 2017 military personnel submitted over 30,000 reports alleging identity theft and over $26 million in losses” (“Identity Theft”, 2018). This is a result of them being deployed overseas and not having constant access to their information at all times and because of the constant moving that is done so an identity thief could pick up any mail that was not sent to a changed address.

With the internet only becoming more popular, it is clear that physical and cyber attacks on personal information will not stop soon. This rising issue needs to be addressed in the nation. Actions taken by federal government bodies to crack down on this issue would prevent any continuation of this activity. Not only would addressing the issue from the top be beneficial, but informing citizens about phishing schemes and fonts that put this information at risk.

Under federal law of the United States, identity theft is considered a federal crime. The first law was passed in 1998 in the Identity theft and Assumption Deterrence Act, which stated, "knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of Federal law” ("Identity Theft," n.d.). This law was then followed up in 2004 with the Theft Prevention Act of 2004 which increased the penalties of identity theft. This act provided the new category of “aggravated theft” to be prosecuted for. Under § 1028A of the act, aggravated identity theft is when “knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person”( ‘Identity Theft Penalty Enhancement Act’, 2004). These penalties would be, at least two years in prison for any aggravated identity theft and over five for terrorism offenses. With this law in place there have been an increase in convictions of aggravated identity theft.

From 2005 to 2006 the number of people charged with this crime went from two hundred twenty-six to five hundred and seven (Fact sheet: The department of justice's efforts to combat identity theft., 2007). This shows how prevalent this crime is and the only way to stop this is to make sure the government is cracking down on the individuals. It would not seem accurate to say that there was an increase of individuals who were participating in aggravated identity theft, but more strict and criminal actions taken against them. Government agencies of the United States are also taking actions against identity theft. The Department of Justice offers help to anyone who has been affected by identity theft with the hotline 1-877-ID-Theft.

Bills/pending legislation. Even though these laws were passed to prevent identity theft there are still some setbacks, and more can be done to prevent the issue. Legislation over the years have faced setbacks with any impactful legislation being backlogged in the senate after introduction and being passed in the house. One bill in particular is House Bill 744, officially called “To provide effective criminal prosecutions for certain identity thefts, and for other purposes”, or also know as STOP Identity Theft Act of 2014. This bill was brought before multiple house committees, House Committee on the Judiciary Crime, Terrorism, Homeland Security, and Investigations. The objective of this bill is to have an increase of prosecution of tax return identity theft, by having a greater focus on this issue and protecting individuals, corporations, and non-profit groups (STOP Identity Theft Act of 2014, 2014). It also aims to increase the penalties from the crime from five to twenty years.

According to the Congressional Budget Office (CBO) this bill would cost the taxpayers $0 to implement, since it only aims at restructuring the Department of Justice rather than an increase in funding (STOP Identity Theft Act of 2014, 2014). However, there has been no action to pass this simple and efficient bill. This is just one of many bills that are facing the same type of avoidance by the Senate, who seem not to want to make a decision on the issues that are ultimately mutually beneficial.

Due to the increase in awareness about the issue of identity theft by consumers and the federal government there has been more consequentials cases that have been settled. The persons who were prosecuted range from single domestically located individuals to international organizations. With there being all types of identity theft and fraud under the federal law. In United States v. Mantovani et al., District of New Jersey the federal government brought up charges on fur individuals who were operating a website that was trafficking personal information. The website they were involved with was apart of the Shadowcrew international criminal group that had stolen personal information of all types on it. This database of information included over 1.7 million credit card numbers of individuals. These theft of the credit card numbers alone resulted in over four million United States Dollars of damages (Fact Sheet, 2007).

In late 2016 the department of Immigration and Customs Enforcement went into different locations of a company owned by Swift & Co. In this raid there were thirteen hundred illegal immigrants that were arrested. These illegal immigrants were all working at this company. Each of the individuals there were using fraudulent social security numbers to make them appear as United States citizens on paper. Each of the social security numbers were assigned to real citizens that were unaware their information had been compromised. This is just one example on why personal information like social security numbers are stolen from real United States citizens so people who are not citizens can falsely assume an identity and enter the workforce in the United States of America.

Even though the thirteen hundred of the illegal immigrant works were detained in the raid that was not all that the company was employing as the number real number of illegal immigrants that were working at the company with stolen social security numbers was more “equal to 23 percent of workers at these six facilities or about one in four workers” (Kammer, 2009). That number should not go unnoticed as this was only for one business. With there being more business faced with the same issue a good portion of the workers were using another person's social security number in order for their own financial gain and knowingly doing so. This does not only hurt the people whose information was used, but also the workers since the company can pay less hourly wages without much complaint.

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