|Office of Community
Oriented Policing Services
U.S. Department of Justice
The Federal Trade Commission (FTC) estimates that identity theft struck nearly 10 million Americans in 2003, with an estimated total annual cost of $5 billion to consumers and $48 billion to businesses, along with costs ranging from $15,000 to $25,000 for law enforcement to investigate each case. Add to that the time and money that the victims must spend to straighten out their lives. According to the FTC's Consumer Sentinel database, which receives and maintains statistics about identity theft and fraud, the most common form of identity theft is credit card fraud, followed by telephone or utility fraud, bank fraud, employment-related fraud, government document or benefit fraud, and loan fraud.
In 1998 Congress made identity theft a federal crime through passage of the Identity Theft and Assumption Deterrence Act. The act directed the FTC to establish procedures and a central repository for logging complaints by victims of identity theft, provide victims with informational materials, and refer complaints to appropriate entities, including the major national consumer reporting agencies and law enforcement agencies.
An earlier law, the Fair Credit Reporting Act (FCRA), provided consumer protections on the use, accuracy, and privacy of consumer credit reports. Originally passed in 1970 and amended in 1996, FCRA ensures that consumers have access to their personal information that lenders, insurers, and others obtain from credit bureaus and use for making decisions about providing credit.
The Fair and Accurate Credit Transactions Act of 2003 (FACTA) further amends FCRA by making some improvements to increase the accuracy of credit reports, prevent identity theft, and restrict the marketing of financial products using sensitive information. FACTA also allows consumers one free credit report per year from each of the three major credit reporting agencies and guarantees consumers access to their credit scores for a reasonable fee. The final rule of FACTA provides for a gradual, structured rollout of a centralized source of credit reports. Starting on December 1, 2004, consumers in the western United States will become eligible to request free credit reports, then moving across the United States from west to east, on September 1, 2005 consumers in the eastern part of the nation will be eligible for the reports.
Prosecution: The Department of Justice prosecutes cases of identity theft and fraud under a variety of federal statutes covering identification, credit card, computer, mail, wire, and financial institution fraud. Each carries substantial penalties, in some cases as high as 30 years of imprisonment, fines, and criminal forfeiture. Federal prosecutors work with the Federal Bureau of Investigation, the United States Secret Service, and the United States Postal Inspection Service to prosecute such cases. In addition, most states now have laws related to identity theft on their books.