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Public Knowledge Center > Identity Theft |
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Different Definitions of Identity Theft Can Cause Difficulties for Victims and Law Enforcement
In addition to general confusion and disagreement over the broad and interchangeable use of the terms "Identity Theft" and "Identity Fraud", one of the many challenges faced by victims of financial Identity Theft is that financial institutions and law enforcement define "Identity Theft" differently. This is one key reason why Identity Theft statistics often vary so greatly depending upon the source of the information, and adds to the difficulty in obtaining accurate statistics. The difference in definitions can also pose significant obstacles in any attempted coordination of efforts when such an effort is made.
Federal law, law enforcement officials, and the criminal justice community define Identity Theft as an act in which a person or persons:
"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, or that constitutes a felony under any applicable State or local law."
The first area of difference is evident in regards to what federal law, law enforcement, and the financial services industry consider to be covered under the term "means of identification" as it relates to the crime of Identity Theft. Under federal and state laws. and within the generally accepted definition used by law enforcement, the term `means of identification' includes:
"d. telecommunication identifying information or access device (as defined in [US Code Title 18] section 1029(e));"
US Code Title 18, Section 1029(e) specifically defines "access device" as:
"(e) (1). the term 'access device' means any card, plate, code, account number, electronic serial number, mobile identification number, personal identification number, or other telecommunications service, equipment, or instrument identifier, or other means of account access that can be used, alone or in conjunction with another access device, to obtain money, goods, services, or any other thing of value, or that can be used to initiate a transfer of funds (other than a transfer originated solely by paper instrument);"
Financial institutions, however, often maintain only a very narrow definition of Identity Theft as it relates directly to their operations.
Someone has Stolen My Credit Card: Is it Credit Card Fraud or Identity Theft?
Even though fraud itself is a crime, from the consumer's or financial institution's perspective, fraudulent or unauthorized transactions involving a credit card are specifically addressed under civil (non-criminal) legislation known as the Fair Credit Billing Act, which limits the cardholder's liability to $50 provided that the fraud or unauthorized transaction is reported to the card issuer or financial institution within 60 days of the date that the first statement containing the error or fraudulent charge was sent to the consumer.
Now, consider an instance of the theft and unauthorized use of a victim's credit card, which is clearly an "access device" under the federal law and law enforcement definitions. Although the fraudulent transactions may have occured as a result of Identity Theft, even in serious and repeated instances, this type of theft is almost always classified by the financial institution as simple "credit card fraud" which the institution writes off without full investigation - and often at the transacting merchant's or business' expense.
In some cases, the financial institution may still hold the consumer liable for the transactions because the fraudulent activity was not reported in a timely manner, was an exempted transaction, or otherwise not afforded fraud liability protections. Unless the amount of the loss is quite large, or can be linked to multiple other cases of fraud, it is much easier and less costly for the institution to close the account or reissue a new card, and write off the loss, than to conduct an investigation.
This means that law enforcement investigators attempting to investigate reported fraud or Identity Theft cases may often have little, if any, access to important information that might lead to an arrest in the case, or provide a critical detail that may link one case to another and uncover the operations of an organized ring.
Fraudulent New Accounts versus Fraud in Existing Accounts: Is it Account Fraud or Identity Theft?
Another disparity in definition and approach is evident in regards to what is actually considered to be "Identity Theft". When considering the crime of Identity Theft, state and federal laws, and law enforcement, do not distinguish between fraud in existing accounts and fraudulently opened new accounts. For financial institutions, however, "account fraud" occurs when a person accesses another's existing account without authorization, and is often another fraud write-off situation that may be closed without full investigation.
"New account fraud" or "True name fraud" is the title that financial institutions specifically reserve for instances in which someone opens a new account at the institution in the victim's name. This is what is considered by most financial institutions to be actual Identity Theft. Even still, depending upon the size of the loss, there is a significant chance that the account will simply be closed upon discovery rather than being fully investigated.
The Tremendous Burden on Law Enforcement
Law enforcement agencies and resources are stretched with many responsibilities. Identity Theft cases are extremely time-consuming to investigate, and the very nature of the crime means that it can be quite difficult for law enforcement investigators to acquire enough information and evidence to apprehend the criminal -- if ever. With different definitions and insufficient reporting and cooperation, there is a tremendous burden on law enforcement officers who are tasked with attempting to gain enough information and evidence to conduct investigations and apprehend the criminals responsible for the crimes.
An overwhelmingly high percentage of Identity Theft cases reported nationwide are almost immediately classified as "non-workable" due to too little available information, multi-jurisdictional difficulties, or an inability to obtain sufficient evidence or cooperation from the organizations involved. It is also widely estimated that as few as 1 in 700 cases are prosecuted.
Areas of Responsibility: Criminal versus Civil Matters
Even with the involvement of law enforcement in a criminal investigation, an individual who has been victimized carries the responsibility of addressing the civil aspects of restoring their identity. Many victimized consumers express dissatisfaction at the level of response and assistance of law enforcement agencies or investigators involved in their case. This is due in large part to the difficulties experienced by the victim in attempting to successfully resolve the situation, in terms of their frustration in dealing with creditors, challenges and hardships caused by the thief's fraudulent activities, and a perceived lack of coordination or effort made by law enforcement. Though the law enforcement report can assist the victim in dealing with creditors and disputing fraudulent accounts and transactions, it is important to note that it is law enforcement's responsibility to address the criminal aspects of the case, and the victim's responsibility to address the civil aspects of the case (i.e. - issues involving creditors, collectors, disputes, etc.).
Victims of Identity Theft can and should assist in the investigation process, without hindering the investigation, by carefully following the instructions given to them by law enforcement, and supplying investigators with concise, organized information that can further the investigation. In many cases, as the victim works through the process of disputing and resolving fraudulent activity, he or she may uncover information that can assist, or may not be readily available to, the law enforcement investigators assigned to the case.
©Copyright 2008 by Michael Barnett. All rights reserved. Unauthorized use, copying, or distribution without permission is prohibited.
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