Identity theft, in which an individual assumes another person's identity to access resources and other benefits in that person's name, is a costly and devastating form of fraud, where the victim suffers the adverse consequences of a crime that they did not commit. ID theft laws have been passed to try to control the resources and the criminal who commits this type of crime.
In true ID theft cases victims do not realize their identity has been stolen until well after six months, or even years, after the crime has been committed. ID thefts occur mainly for obtaining financial credit, services, medical care and drugs by using another individual's identification details and assuming her/his role in daily life. A rising concern is that these ID theft crimes are committed using a child's identity which can be easily obtained. Some thieves are successful in buying a house or getting a driver's license using a child's identity.
The number of victims of ID theft is increasing by the day and in the United States alone; there are about 10 million victims of identity theft per year. This has resulted in the framing of identity theft laws that are aimed at punishing the ones committing the fraud.
The passing of these ID theft laws has elevated the offense from a mere misdemeanor to a felony. One reason for this is that the conviction rate for an ID thief, assuming they get caught, is around 6-7%. As per the identity theft laws, the maximum prison sentence runs for up to five years and any individual convicted of phishing is awarded an additional two years. There are penalties and additional prison terms for abuse of power, mail fraud, terrorism related offenses.
The individual state penalties for identity theft laws vary widely and almost always the crime is classified into a series of charges ranging from misdemeanors to felonies. The prison term and the penalties that are imposed by the identity theft laws are according to the jurisdiction of the state where the crime is committed.
The Fair and Accurate Credit Transactions Act of 2003 established the Red Flags Rule and contains provisions to aid in enforcement of the identity theft laws. The Red Flags Rule required by the Federal Trade Commission has set up regulations that would require businesses and organizations to design, develop, and implement procedures that would protect consumers from ID theft. The Red Flags Rule requires that the businesses have written documentation as to what acts or activity could constitute potential identity exposure, how the business can flag these activities, how they intend to respond and investigate such flagged alerts, and how they are going to maintain this program and evaluate its success. Violation of the Red Flags Rule can initiate class action and civil lawsuits against the organization. Creditors and financial institutions that have covered accounts were expected to implement the rule before a deadline of November of 2009.
There was also a clarification following the Red Flags Rule implementation that limited the type of creditor that must comply with the rule. The net result has been that the identity theft laws have gotten tougher. The Red Flags Rule has created a framework to identify ID theft and minimize the resources that can be accessed by Identity thieves. Through these current identity theft laws it makes it more difficult for a person trying to commit this crime.
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