Identity Theft & Identity Fraud Under Consumer Protection Laws
What is Identity Theft?
Identity theft, or identity fraud, occurs when an individual misuses personal information to assume the identity of another. Many sources of sensitive personal information exist, including driver's licenses, social security cards, bank statements, and computer databases. Once identity thieves have access to this data, they often proceed to open new credit card accounts, take out loans, or obtain passports or other government identification documents, all under the victim's name.
How Do Identity Thieves Obtain Personal Information?
Identity thieves steal the personal information of victims in several ways:
- Pretexting occurs when a person seeks to obtain personal information under false pretenses, such as pretending over the phone to be a representative from a person's bank and requesting private information.
- Shouldering refers to collecting personal data by using a strategic position, such as looking over the shoulder of a person writing a social security number or entering a PIN at an ATM.
- Eavesdropping means listening in on another's conversation during which a credit card, password or calling card account information is disclosed.
- Dumpster Diving, which as the name suggests, entails digging through trash receptacles for documents revealing personal information.
- Mail Theft involves the acquisition of sensitive information by intercepting mail or retrieving disposed mail. Some criminals also fill out change-of-address cards to redirect mail to another location. That's why some credit card companies require pre-approved credit card solicitations to be accepted from the home telephone number of the recipient to prevent fraud.
- Phishing refers to the use of fake or spoof banking or financial institution websites to capture account numbers, passwords and other sensitive data from unsuspecting customers.
What Laws Address Identity Theft?
In the United States, identity theft is a crime. The Identity Theft and Assumption Deterrence Act of 1998 makes it a federal crime to "knowingly transfe[r] or us[e], without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutions a violation of Federal law, or that constitutes a felony under any applicable State or local law." (47 U.S.C. § 1001 et seq.) The Department of Justice prosecutes violations under the Act, which are investigated by federal agencies including the FBI, Secret Service, U.S. Postal Inspection Service and Federal Trade Commission (FTC). State laws also criminalize identity theft, but the law varies from state to state.
In addition to federal and state criminal laws prohibiting identity theft, federal and state consumer laws also aim at preventing identity theft. Such laws seek to protect personal information by regulating and limiting the sharing of personal records held by certain entities. At the federal level, the Federal Trade Commission (FTC) investigates alleged violations of consumer law. Most states have a specific state agency or department devoted to consumer protection. California is the first state to have an agency (the Office of Privacy Protection) that is dedicated solely to privacy protection of consumers.
