What Identity Theft Is - Essay Example

The aim of the research is to define what identity theft is, what prevention measures exist to minimize the negative impact of identity theft and how organizations respond to the facts of identity theft. The research will be conducted through the online survey. The results will be analyzed through the qualitative and quantitative means. The key words: identity theft, victimization, response. Chapter One Context of the Problem Identity theft has been a problem for years, and has become one of the fastest growing crimes in the nation. Identity theft is when someone uses your name, social security number, financial information and any other identification without your knowledge to commit fraud and or other crimes. Identity theft victimizes nearly 10 million Americans each year and costs businesses and individuals an estimated $53 billion (Crosby, 2005). A person’s identity can be stolen either in the real world or in the digital world (online). Although many would believe the digital world is the most common place that a person’s identity is stolen this is not true. The most common place that a person’s identity is stolen is in the real world when their wallet, checkbook or credit card is lost or stolen. The internet always grabs the headlines, but it is individuals who are close to the victims, such as family and friends, that are doing most of the crimes (Lai, 2006). Social Security numbers are at the heart of the issue because it is our sole code for identity. It’s very easy to obtain Social Security numbers. Non-Social Security Administration uses of Social Security numbers have not been prohibited, so Social Security numbers are used as identification and account numbers by many entities (Walsh, 2004). Counterfeit Social Security numbers are on the rise because the Social Security number is the national identifier and it gives individuals a reason to use it for illegal purposes. Stolen Social Security numbers have been used to establish credit, gain employment, hide identity to commit crimes obtain benefits and services. Thieves will attempt to get information on their potential victims in many different ways. They may steal your bank statements or pre-approved credit card applications out of your mailbox or they may do what is known as dumpster diving which is when the thief will go throw your garbage to look for potential information with your identification on it. The most difficult type of identity theft is fraudulent accounts being opened in a person’s name. It takes an average of 152 days for victims to find out that a new account has been opened in their name. That’s because only a credit report or notice from the lender or a collection agency will alert you to the new accounts existence (Bigda, 2006). No matter how long it takes for a person to discover that they are a victim of identity theft it will cost them countless hours of stress and anguish to restore their credit. Individuals ranging from the age of 25 to 34 are the most susceptible to identity theft because of their lifestyle and with all the social networking sites that they have access to on the internet (myspace.com, eBay, AOL, etc…). This creates more opportunity for the thieves. Although real world identity theft is the most common, digital identity theft is the easiest and the most lucrative crime. With all of the technologies that are available today a thief can practice ways of stealing someone’s information and once they have it perfected they can duplicate the crime quickly without ever leaving the comforts of their home or their computer. Security Breaches is one of the biggest contributors to identity theft. According to a survey done by Privacy Rights Clearinghouse (2005), “Personal data on more than 6 million U.S. consumers has been lost or stolen since the start of the New Year”. Institutions affected ranged from data brokers and banks to universities and federal agencies”. This data was lost to hackers, fake businesses setup to obtain the information or thieves with stolen laptops (Katel, 2005). Information selling is big business and companies are selling consumer’s information without their permission. The U.S. Supreme Court, in U.S. v. Miller, ruled that Americans do not have a Constitutional right to privacy in personal data held by third parties (Silver Lake Publishing, 2004). So, even though the information was about you, those that collected it and kept it owned it. This means that the companies are free to give your financial data to whomever it pleases. Stealing a person’s identity creates havoc for that individual. There have been situations when a person has been pulled over for a traffic violation and found out that they had a warrant out for their arrest due to criminal activity. Individuals have gone to buy homes and where turned down to later find out that their credit report had false activities listed. Employers have passed over potential candidates for a job because of criminal records that were exposed during their background investigation. Opening a bank account has been a problem for victims of identity theft because some banks do a credit check prior to giving the individual an account. It is almost impossible to prove who you are on the Internet. Identity theft is becoming one of the fastest growing crimes according to a FTC survey which revealed that 27.3 million Americans were victims of some form of identity theft (Hamilton, 2004). This research paper will discuss different forms of identity theft, how thieves use your personal information and ways to protect you from becoming the next victim. Research Questions The purpose of this research is to determine why identity theft is one of the largest growing problems in the nation. To answer this question, the following subquestions will be addressed: 1. What is identity theft and why is it one of the largest growing problems in the nation? 2. What do thieves look for in their potential victims? 3. What are some of consequences a person endures when their identity has been stolen? 4. What are some steps a person can take to protect their identity? 5. What are the credit card company’s doing to help the consumer when dealing with identity theft? Significance of the Study Identity theft is the fastest-growing crime in America. And it extends across borders and involves other parts of the globe. The Federal Trade Commission (FTC) estimates that 10 million people were victims in 2002 (Silver Lake Publishing, 2004). Identity theft is a problem because with the lack of central command post for dealing with identity theft often involves local, state and federal offices which make it difficult to understand the problem clearly. Identity theft is important because it cost U.S. businesses and consumers a combined $50 billion annually, not to mention countless hours of stress and anguish for approximately 10 million victims each year (Deybach, 2007). The majority of identity theft victims will not discover they have been impacted until after some extent of damage has already been done (Deybach, 2007). The less fortunate maybe notified by collections agencies or by the police. Identity theft victims face the daily stress of creditor calls, bounced checks, and compromised credit ratings. While consoled by banks and credit card companies that often bear the direct financial burden of loss, these individuals are plagued with hours of distractions, out of pocket expenses that must be incurred if one is to restore their credit and reputation (Ladha, 2006). Determining the exact scope and financial impact of identity theft on people and businesses is hard. More than a quarter of a million identity theft complaints were lodged with the agency last year, accounting for 36% of the 674,000 complaints the Federal Trade Commission received (McMillan, 2007). Federal Trade Commission chairwoman Deborah Majoras told the Senate Judiciary Committee on April 13, “victims spent almost 300 million hours correcting their records and reclaiming their good names. That is a substantial toll, and we take seriously the need to reduce it” (Katel, 2005 pg 2.). The Federal Trade Commission has made identity theft a priority over the past few years. One out of 25 of those surveyed said identity thieves misused their personal information to evade law enforcement, such as presenting the victim’s name and identifying information when stopped by law enforcement authorities or charged with a crime (Silver Lake Publishing, 2004). One in every 23 consumers will fall victim to identity theft, but armed with the information presented, victims can be prepared for and manage its aftermath (Ladha, 2006). Although identity theft is a pervasive consumer problem, the Report provides some hope, revealing actions that sharply curtail risk and put control back in the hands of the consumer. In addition, victims are spending reportedly more time trying to resolve identity fraud problems, from 33 hours in 2003 to 40 hours in 2006 (Ladha, 2006). Identity theft requires no direct communication between criminal and victim. Simply doing things that are part of your everyday routine may give identity thieves enough of an opportunity to get unauthorized access to personal data and commit identity theft. One of the biggest obstacles victims face is that they are more or less, completely on their own. The prevailing attitude of most creditors advised of a case of identity theft victims to submit an affidavit testifying that they did not incur the debt themselves (Hammond, 2003). According to Riverside County Judge Roger Luebs, formerly head of the Cyber Crime Unit of the Riverside County District Attorney’s Office, identity thieves come in all shapes and sizes, “from petty thieves and junkies to doctors and business executives. Some people are living very well using the credit worthiness and identities of other people” (Preston, 2003 p20). This marks the seventh consecutive year that identity theft has been ranked No. 1. The second-largest number of complaints, 7%, came from consumers who were unhappy with products they had ordered from catalogs (McMillan, 2007). Thieves do not steal identities only for financial gain for their own personal use. They also steal people’s identities to sell to terrorists. A State Department probe revealed a way terrorists and anyone attempting to enter the country illegally can get the help of the United States government to do so. In July 2002, federal investigators arrested 31 Middle Easterners suspected of entering the United States by bribing American Embassy officials in Qatar for visas. According to a United States official, two of the 31 previously lived with the 9/11 terrorists (Hammond, 2003). You cannot prevent identity theft. Criminals can commit identity theft relatively easily because of lax credit industry practices, careless information-handling practices in the workplace, and the ease of obtaining social security numbers (UCAN, 2006). The credit-rating industry points out that while consumers may be upset about technology-assisted crime and loss of privacy, they like the convenience of merchants and banks being able to run instant credit checks at the point of purchase using the same kind of online credit information used by the thieves (Katel, 2005). These types of systems are what put people at risk. Being aware of identity theft is very important because it can help reduce the risk of it happening to you. Everyone is open to becoming a victim. While personal details that would facilitate identity theft or constitute an unacceptable breach of privacy may be hazy for many people, many more intuitively understand that if their financial information is accessed, an actual theft may not occur until days, months or even years later. However, it’s disconcerting to hear CIO’s, forensics investigators, FBI agents, and other people that ought to know better cling to old pre-digital notions of theft, or actively to try to push the idea that you can control what happens to data after public disclosure. It would be nice if we lived in simpler times, but unfortunately we don’t (Espenschied, 2006). Chapter two Methodology The methodology chosen for the present research was interviews conducted through emails and telephone conversations with those victims who have agreed to take part in the research. The number of the victims refused to take part in the research due to their emotional state as a result of victimization (around 4%). The total number of the respondents was 205. The total number of emails sent was 1500, out of which 343 emails have received positive replies as for the fact of being the identity theft victim. The emails have been sent at random. The reasons of the victims refusals to take part in the research were various, the most widely-spread being emotional impact (4% as stated above), thus the ultimate number of respondents was 205, out of which 182 have agreed to answer the questions through the questionnaire provided. The researcher has not found any opportunity to acquire the official list of the identity theft victims, thus the email sending has been done at random to the email addresses which belonged to the U.S. residents. This may lessen the credibility of the acquired results, but it may also give some freedom in interpreting them, because looking for respondents through the official lists is not very appropriate for the victims on the emotional basis, while receiving an email with the request and suggestion to take part in the research gives the receiver to ignore the email in case he (she) does not want to deal with the issue, or to thoroughly think before he (she) gives agreement to participate, thus the information which has been required through the survey may even appear to be more reliable, as acquired through unofficial sources and thus containing information which is free from bias and is closer to the real state of affairs. The research of the present issue may be called triangular, which means that it will comprise both qualitative and quantitative methods of analyzing the acquired data. Chapter three What is an identity theft and why is it one of the largest growing problems of the nation? Various reasons may be taken to ground the seriousness of the ID theft problem, but it was interesting to ask the respondents what they think about identity theft, especially bearing in mind, that they have become the victims of this theft and look at this issue from another viewpoint. The respondents have expressed various suggestions as for why identity theft is still one of the major problems in criminal situation of the country, despite the fact that vast amount of official public entities deal with it; 52% of the respondents are sure that identity theft is one of the largest growing problems not only nationally, but worldwide through the fact that official security agencies have not yet learned how to deal with the identity theft, in combination with understanding that those who become identity thieves constantly invent new methods and ways to steal personal information. It is interesting to note, that 73% of respondents have reported that they have been stolen only ID information, and have not become victims of other financial crimes. This means, that at present ID theft is the most widely spread crime among other similar identity thefts. The researcher was able to find out, that the knowledge which identity theft victims possess, is rather limited, which is even more serious taking into account that they have personally experienced victimization. the limits of the knowledge is shown through the fact that 81.5% of respondents suppose identity theft to deal with ID information only, and dont include other similar financial frauds into this list; moreover, they dont know how to deal with such financial frauds in case they become their victims. This gives solid grounds to suggest, that lack of knowledge related to financial frauds, identity thefts and the actions which should be undertaken in case the person suspects himself to have become a victim is one of the essential reasons for this crime to grow all over the nation. Chapter four What do thieves look for in their potential victims? There is no single answer to the question of what thieves look for when they steal personal information; even if the researcher answers that they look for private information, the question should be extended to the point of how this personal information is then used. 3% of the respondents stated that they had experienced all three major kinds of identity theft: ID theft, financial ID theft and cloning. The table below gives the principal means of using the stolen personal information by the thieves, and though the list is far from being complete, it gives basic idea of what thieves look for through the use of the personal information. Using the credit card information for personal charges 23% Opening new credit account in victims name 26% Obtaining loans of various kinds 21.3% Student loans 6% Thus, the answer to the question is that thieves look for the personal information which they can later use for acquiring additional financial assets (profits), or the assets of other kinds. The ways of spending money received through the use of stolen information are numerous, especially when it relates to the special cases of child stealing (or using) parents financial ID or other information for buying goods online. In relation to such special cases, the previous study conducted by ITRC (2005) asserts that the amount of parental (familial) identity thefts is growing, and it is often that relatives become the thieves, and the victims report they knew their imposter. However, in the present research it was found that 32% of respondents didn’t know the thief at all. Chapter five What are some of the consequences the person endures when the identity has been stolen? Much has been said about the number of hours the person needs to restore the current credit and financial status and to return the lost information. The average number of hours spent by the respondents on the recovery process (including emotional impact) has been approximately 94 hours. However, 23% of victims have reported to spend more than 100 hours. This is compatible with the results which have been conducted by Gayer (2003). Though, in comparison with the previous study, the number of hours spent by the victims for the restoration process is lower, which may be explained by either the lower amount of the respondents or by the fact that there has been certain progress in the way public organizations deal with identity thefts, and this has led to the decrease of the hours’ data. The range of the time period necessary for the recovery of the victim’s credit status has ranged from 10 hours to 4,206 hours. Much less information is present in literature in terms of emotional and physical impact of the identity theft on victims, and this is why it was made one of the priority questions of the present research. The respondents have been asked to answer, how much the identity theft had impacted their emotional and physical health, how much medical recovery cost them and for how long they had to cope with emotional problems as a result of the crime. The average cost of medical service for the respondents was $1003.7. 92% of respondents stated that their emotional recovery took between 5 and 6 months, and that they have suffered serious emotional problems. It should be noted, that the emotional consequences of identity theft include first wounding (realization of becoming a victim) and second wounding (during the process of dealing with the issue resolution), and the second part of the emotional stress usually requires 3 to 5 months to be eliminated. (Givens, 2000) Chapter six What are some steps a person can take to protect identity? It has already been stated that the knowledge of respondents in how to deal with identity thefts is very limited, which appears to be one of the reasons for identity thefts levels growing each year. In the light of the information which the researcher was able to find out through the online survey, it should be appropriate to give basic recommendations as for what steps can be taken by a person to prevent identity theft. Any person should understand that it may happen to anyone and this is why the recommendations and precautions are equal for everyone. - It often happens that companies ask for the Social Security Numbers without urgent need, this is why it is essential to identify whether the company really needs this information and how it will protect privacy of this information; - Any important documents, as Social security cards, credit cards or birth certificates (etc) should not be carried in the wallet; the physical stealing of the documents is one of the most widely-spread ways to possess the identity information and use it for criminal purposes. - No personal information should be given on the phone, through the use of email and other similar means. (Givens, 2000) The respondents taking part in the research were asked to provide the researcher with their personal response (recommendations) in relation to the problem of the identity theft, and one of the interesting and probably essential was that the response of various organizations dealing with the issue should be immediate and effective, which will lessen emotional consequences of the crime and recover the lost information. The issue of the organizational response (especially credit card companies) is one of the most problematic areas in identity theft, and should be addressed in the research separately. Chapter seven What are the credit card companies doing to help the consumer in dealing with identity theft? Lacey (2005) writes, that the role of the organizations in relation to the identity theft is threefold: as a site of identity use (and misuse); as detectors of identity theft; and, ultimately, as a site where a fundamental social imperative exists to ensure responsible action is taken to address this form of criminality, an imperative based on the increasingly accepted notion that organizations are responsible for the long-term well-being and sustainability of the broader community. (p. 244) The respondents were asked to evaluate the response of the credit cards companies to the issue of the identity theft reported by the victim. The possible use of this data acquired through the survey is in improving the performance of major areas and service organizations which primarily have to deal with identity theft. The overall reaction of respondents to the question about credit cards companies was negative; they stated that they had not received the necessary level of response from them. Only 15.6% of the participants stated that they had been able to reach the credit card specialist to report on the identity theft immediately; and only 8.3% of the victims had been satisfied with the level of service provided as the consequence of victimization. It is clear, that the numbers speak for themselves and credit cards companies need serious improvement in the level of service they offer to those who report of their identity theft. 54.9% of the victims needed 5 and more calls (letters) to start the resolution process, and taking into account that in case with identity theft immediate reaction is crucial for the minimization of the negative consequences, credit cards companies may become a serious obstacle in the desire of the client to make the resolution process as easy as possible. (May, 2002) Conclusion The research has been conducted with the aim to clarify, whether the identity theft issue is as serious as reported, what the background reasons for the spreading of this problem are and what can be done to prevent identity theft. Despite the fact, that some sources state, it is impossible to prevent identity theft, there are still some important steps which should be taken to minimize the risks. These steps have been identified in the present research. The researcher has come to the conclusion, that the reasons for the identity theft being one of the most serious criminal problem of the nation at present lies in the limited knowledge of the public about kinds of identity thefts and the ways of their prevention; moreover, many people dont understand that identity theft can happen to anyone no matter the financial, social or legal status. Another serious obstacle in decreasing the number of the ID theft crimes is in the inability of various organizations (especially credit card companies, which have been addressed in the research) to respond to the issue immediately and effectively. A part of the research was devoted to the emotional stress as one of the major consequences of victimization in identity theft. Lacey (2005) writes, that identity theft threatens the very essence of the individuals sense of self, and his or her capacity to participate in society. This is why the issue should be addressed with the account of various numerous factors, including prevention, recognition and elimination of the negative impact of the crime. It is suggested that further deeper research is undertaken in the area of interrelations of various organizations and the public in both prevention and aftermath response to identity thefts of various kinds. References Gayer, Jennette. (2003). Policing privacy: Law enforcements response to identity theft. California: Californian Public Interest Research Group. Givens, Beth. (2000). Identity theft: The growing problem of wrongful criminal records. Presented at SEARCH National Conference on Privacy Technology and Criminal Justice Information, Washington, DC, June 1. ITRC. (2005). Identity theft: The aftermath 2004. Identity Theft Resource Center. Available at http://www.idtheftcenter.org (accessed 01 March 2007) Lacey, David. (2005). The role of organizations in identity theft response: the organizational- individual victim dynamic. Journal of Consumer Affairs, 38 (2): 244-253 May, George. (2002). Stop thief! Are credit bureaus and creditors "silent" co-conspirators to identity theft? Journal of Texas Consumer Law, 5 (3): 72-80. Read More