Kristin M. Finklea Specialist in Domestic Security
the current fiscal environment, policymakers are increasingly concerned with
securing the economic health of the United States—including combating
those crimes that threaten to further undermine the nation’s financial
stability. Identity theft is one such crime. In 2011, about 11.6 million
Americans were reportedly victims of identity fraud, and the average identity
fraud victim incurred a mean of $354 in costs as a result of the fraud.
Identity theft is often committed to facilitate other crimes such as
credit card fraud, document fraud, or employment fraud, which in turn can
affect not only the nation’s economy but its security. Consequently, in
securing the nation and its economic health, policymakers are also tasked
with reducing identity theft and its impact.
Identity theft has remained the dominant consumer fraud complaint to the
Federal Trade Commission (FTC). Nevertheless, while the number of overall
identity theft complaints generally increased between when the FTC began
recording identity theft complaints in 2000 and 2008, the number of
complaints decreased in both 2009 and 2010 before rising in 2011 to levels
greater than in 2009. Identity theft case filings and convictions peaked
in 2007 and 2008, and have generally declined since. Aggravated
identity theft case filings and convictions, on the other hand, have
largely continued to increase since aggravated identity theft was added as a
federal offense in 2004.
Congress continues to debate the federal government’s role in (1) preventing
identity theft and its related crimes, (2) mitigating the potential
effects of identity theft after it occurs, and (3) providing the most
effective tools to investigate and prosecute identity thieves. With respect to preventing
identity theft, one issue concerning policymakers is the prevalence of
personally identifiable information—and in particular, the prevalence of Social
Security numbers (SSNs)— in both the private and public sectors. One
policy option to reduce their prevalence may involve restricting the use
of SSNs on government-issued documents such as Medicare identification cards.
Another option could entail providing federal agencies with increased
regulatory authority to curb the prevalence of SSN use in the private
sector. In debating policies to mitigate the effects of identity theft,
one option Congress may consider is whether to strengthen data breach notification
requirements. Such requirements could affect the notification of relevant law enforcement
authorities as well as any individuals whose personally identifiable
information may be at risk from the breach. Congress may also be
interested in assessing the true scope of data breaches, particularly
involving government networks.
There have already been several legislative and administrative actions aimed at
curtailing identity theft. Congress enacted legislation naming identity
theft as a federal crime in 1998 (P.L. 105-318) and later provided for
enhanced penalties for aggravated identity theft (P.L. 108-275). In April 2007,
the President’s Identity Theft Task Force issued recommendations to combat
identity theft, including specific legislative recommendations to close
identity theft-related gaps in the federal criminal statutes. In a further
attempt to curb identity theft, Congress directed the FTC to issue an Identity
Theft Red Flags Rule (effective December 31, 2010), requiring that creditors
and financial institutions with specified account types develop and
institute written identity theft prevention programs.
Date of Report: December 18, 2012
Number of Pages: 31 Order Number: R40599 Price: $29.95
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