Identity Theft by a Family Member: Legal and Ethical Issues - Research Paper Example

? Identity Theft by a Family Member: Legal and Ethical Issues Identity theft has been growing rampantly as one ofthe most potential crimes in the United States for the past few years. Although the term identity theft refers to a variety of fraudulent activities, ‘identity theft by a family member’ has become a unique form of crime that is getting wider attention today in terms of several ethical concerns and as an act of family betrayal. This type of thief who knows the victim personally is called personal identity thief. Unlike other forms of identity theft crimes, theft by a family member raises numerous legal and ethical questions and thus has become a hot topic for discussion. This paper tends to explore identity theft by family member as a multifaceted issue and the intensity of this crime’s impacts on victims and families as a whole. This will also analyze the legal proceedings, their limitations, and some practical steps that individuals can take up to ensure the safety of their identity. Introduction According to a report published recently on Reuters by Lipka (2013), between 2006 and 2010 almost two million to three million elderly parents had their identities stolen by a younger family member only for fraudulent activities. Despite the intensity of this issue, identity theft by family members has not been well perceived as a serious problem today. According to the Federal Trade Commission (FTC) reports, the reasons why people commit family identity theft include but not limited to ‘gambling and drug addiction, divorce, unmanageable debts, and hard feelings among family members’ (as cited in Identityhawk). The report also states that incidents of identity theft committed by family members constitute nine percent of all stolen identities. In the case of an identity theft by family members, the perpetrator can be siblings, cousins, grandchildren, parents, and other relatives as well. As compared to other types of identity thefts, theft by family members involves more ethical concerns for various reasons. Victims tend not to disclose the issue to the public and hence they are less likely to file complaints against family members. On the flip side, living under the same roof and keeping a healthy relationship with the perpetrator is difficult as well. In this context, it is significant to analyze the intensity of identity theft by family members as a security issue and an ethical concern in modern family environment. There are some possible precautions that people can take to avoid identity theft and subsequent fraudulent activities. Identity theft by a family member involves higher degree of complexity Reaching a final resolution in the case of an identity theft by a family member is much time- consuming and hence expensive as compared to a common case of identity theft. As mentioned in the introduction, the initial thought of the victim would be if the incident has to be reported to the officials or not. Since the fraud is a family member, victims normally do not want them face jail time other than initiating a reasonable level of forfeiture to compensate the loss. However, this is not always easy as it requires the cooperation of the criminal itself along with the assistance of all creditors involved in order to gather all the pertinent information. How intense or painless the resolution process is depends on the criminal’s response once he is caught. Reports suggest that victims suffer and ignore the crime so as to save the family member involved unless the loss causes heavy damage. In contrast, there are situations when victims are forced to file police report, and thing is that the case would go on seriously despite the matter that the criminal is a family member or a close relative of the victim. The story of Ana Ramirez is a clear example of how extremely an issue of this sort can affect a person’s life. As reported by Smith (2012) in Huffington Post dated 1st November, Ramirez who had been living in Southern California with her husband and three young children in a rented house proposed to buy a house of her own. She was shocked as she came to know that she owns a house already since she was 10 year old. The case was that when she was a child, Ramirez’s mother stole her identity ‘to take out a mortgage but failed to make timely payments and nearly fell into foreclosure’. However, the victim did not file a charge against her mother as she did not want to spoil the reputation her family. Evidently, Ramirez’s Social Security number has been abused for years by her own parent. According to advocates, “cases like Ramirez's are the most difficult to detect and resolve because the ones who are supposed to monitor children's credit -- their parents -- are the thieves, and victims are often unwilling to report them. Without a police report, experts say it is nearly impossible to restore a victim's good name” (as cited in Smith, 2012). To add to the complexity of the issue, police also sometimes seems confused if identity theft by a family member is to be left as a family matter, especially when parent is the offender. Butler at the Maryland Crime Victims' Resource Center points out that the current “child-welfare system is not equipped to handle cases of parents stealing their children's identities because children are not allowed to retain legal assistance on their own” (Smith). Another incident reported in carrollcountytimes by Marshall dated April 6 (2010) would reveal how the issue can raise both ethical and legal uncertainties. Jimmy Louis Craighead, a forty year father in Westminster was convicted of stealing his three children’s identities. The strange thing was that Craighead and his wife claimed that they did not mean any harm to their children but performed the act only to provide them with basic amenities as they parents were not able to get credit in their own names. Deputy State’s Attorney Melissa Hockensmith commented on the incident as ““Quite honestly, I don’t know what the appropriate punishment is for someone who does this to their own children,” (cited in Marshall). Some statistics It is important to review the statistics to learn the rampant increase of crime associated with identity theft. According to the ID Analytics Study (September 20, 2011), ‘about 500,000 children under the age of 18 have had their identities stolen by a parent’ whereas ‘two to three million elderly parents are likely victims of identity theft initiated by their adult children’. The new developments show that children are the new targets for identity thieves. The most advantageous factor or the thieves is that the crime can remain undetected for several years. Hence, today while ensuring the safety of a child it is highly significant to ensure that the child’s identity is also safe. Thieves usually use the identities of children to purchase homes, vehicles, credit card accounts etc; and the victims only when they turn adults encounter a series of financial roadblocks. According to latest reports (FTC 2011), last year identity theft complaints from victims under 19 alone constituted 8 percent of all complaints. Major limitations Most of the identity theft issues begin with the abuse of one’s Social Security Number, which is an alpha-numerical code assigned by the governments to citizens and temporary workers. Social Security number system is employed in countries like Russia and the United States. Under section 205(c)(2) of the Social Security Act in the United States, a nine-digit number as Social Security number (SSN) is issued to U.S. citizens, permanent residents, and temporary (working) residents. This number issued by Social Security Administration facilitates the government to track individuals for social security purposes. As discussed already, the disclosure and processing of SSN has been a bone of contention among citizens and researchers alike. SSN is usually used and asked as an authenticator and hence it is connected with numerous forms of identification processes. For instance, financial institutions in the United States usually require SSN to open bank accounts, and to acquire credit cards and loans. The general conception is that no one except the person to whom SSN was issued will have access to it. However, hundreds of incidents have already proved the limitations of relying only on SSN as identifier. To illustrate, presently there is no chance for verifying if the person using a certain SSN is truly the one to whom it was assigned. The major reason is that the card does not contain any biometric information of the owner. Considering this challenge, institutions like The Internal Revenue Service (IRS) have proposed some alternatives. Government also tends to limit or restrict the use of SSN for certain commercial purposes. Although such efforts will curb the problem to a certain extent, when it comes to child abuse, it is impossible to keep a child’s SSN away from a parent’s access. Another limitation is that information provided by a client on an application is usually taken at face value by many of the financial institutions. In other words, there are circumstances when the age of the applicant is not verified by credit issuers. Until a dispute is filed, credit agencies deem the applicant an adult. There are incidents regarding when a thief uses the information of a minor to get a driver’s license or uses it when caught in a criminal offense. Since there is no accurate system to verify the ownership of the SSN provided by an applicant, fraud is very likely in many of the occasions especially when the economic status of the individuals and the country as a whole declines. It is evident from many of the cases that parents abuse the identity of their children to withstand financial crisis caused by unemployment and bankruptcy. In such a situation, meeting the basic necessaries of all the individuals in the family becomes the prime objective of a parent rather than the ethical concerns of stealing a child’s identity for fund. In addition, the fraudulent accounts opened may have handled by several individuals until the credit history is expired; in such situations it is impossible to track the original transaction records to resolve the issue. When the child is the victim and parents are blameless, it becomes the sole responsibility of the parents to prove their child’s innocence so as to restore his identity and credit. Modern forms of identify thefts are too difficult for the police to detect for several reasons. Firstly, fraudulent sites those commit thefts possibly vanish very soon giving little time for the police to act. This sort of crime is operated through computer servers that are located anywhere in the world. As Cullan (2007) points out, this makes jurisdictional conflicts even if the criminals are identified, for ‘what is illegal in the United States is not necessarily illegal in other countries’. The above stated conditions as a whole point to the great gap in the current regulations and SSN system. The big challenge associated with identity theft, especially when a parent is the criminal is that the fraud is often detected only after a long time. This makes the case too complex to resolve and it affects the victim in every aspect. All social researchers converge at the point that a new system or a well defined and modified version of the current system is inevitable to address the issue. As the technology grows rampantly, the likeliness of identity theft is also increasing. Theft by a family member breaks up the good relationship between family members and causes the whole family to plunges into struggle and depression. Loyalty once lost is hard to regain. If a child victim as he turns to adult comes to know that his parent has been misusing his identity will surely be affected mentally, emotionally, and socially other than the debt incurred by the act. Personal integrity of the family member involved is also lost all at once. This can cause incalculable negative impacts on the victim in the long run. How identity theft detected Identity theft, no matter committed by a parent or a child, is often detected once certain unfortunate things occur soon or very late subsequent to the act. When the child victim turns adult and tries to open a bank account or college fund, he identifies that an account already exists with his SSN so that another one cannot be opened using the same identity. Same is the case when he tries to get a driving license if his identity was already stolen. Another occasion when a child or parents come to the point is when they receive calls or letters from collection agencies regarding the accounts which are actually not opened by the person. The most annoying situation is when authorities arrive with a warrant to arrest the child. An adult victim of identity theft is often deprived of SSI, tenancy, utility or all welfare services. Sometimes they detect theft only when they get unusual collection notices in the mail or by telephone. The adult victim also is denied to open a bank or checking account and possibly gets arrested for a crime he never committed. Obviously, the moment one comes to know that he is a victim of identity theft is disgusting. And, the grief increases hundred folds if the perpetrator is a close family member. Considering the issue as a reality one has to take up possible strategies and remedial measures to prevent identity theft of any kind. How to prevent identity theft Although there are no clearly defined methods to prevent identity theft, certain steps can help every individual to avoid chances of fraud to a great extent. A child never reviews his credit accounts as he has not opened an account with any issuers. However, parents can ensure that their child’s identity is safe and free from theft and debts. With regard to elders’ identity, in states like Florida, California, New York, Illinois, and New Jersey a person can use a ‘credit freeze’ option that prevents any prospective lender, banks, credit card issuers etc from issuing new credit in a consumer’s name without permission (Cullan, 2007, p. 37). Roddel (2008) puts forward some effective and very practical steps to avoid identity thefts. According to this, a person who is concerned about his valuable and sensitive identity must; Shred credit card and ATM receipts, credit card solicitations, pre-approved credit offers etc Carry only cards and documents that are really essential for the day Always keep receipts as a proof of purchase to make a claim Monitor the information in one’s credit reports on a regular basis to verify the accuracy of information and the safety of the SSN (even that of children. Children normally will not have a credit report unless their identity is misused by someone). ‘pay attention to Social Security Statement of Earnings and Benefits’ Keep all information regarding credit card, insurance, hospital, banking, or SS information secret Not disclose password, log on information, or PINs to relatives, friends, employees etc under any circumstances (Source: Roddel, 2008, pp. 104-106) Identity Theft and Federal Initiatives 1. The Federal Trade Commission (FTC) The Federal agencies have been trying their best to curb identity theft of all kinds through various strategies. For instance, local law enforcement agencies are enabled to share information on identity theft crimes. The Identity Theft Data Clearinghouse that is maintained by The Federal Trade Commission helps tracking complaints. The complaint received from a victim is clustered with similar cases and the information derived is shared with Federal and local law enforcers to assist them in investigation processes. Federal Trade Commission’s consumer information site gives some valuable guidance regarding how to safeguard a child’s identity from being stolen. It instructs people to check periodically for credit reports to see if their children’s information is misused. It reminds customers that a child’s information can be accessed by identity thieves Social Security number can be used by identity thieves who can sell the details or use them ‘to apply for government benefits, open bank and credit card accounts, apply for a loan or utility service, or rent a place to live’. FTC also asks people to find out how schools and other institutions that demand child’s sensitive information collect, use, store, and throw away the information they collect (Federal Trade Commission). 2. The US Department of Justice Cases of identity theft in the US are prosecuted by the department of justice on the basis of a variety of statutes. For instance, according to the Identity Theft and Assumption Deterrence Act, "knowingly transferring or using, 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" (Department of Justice). As per the law [18 U.S.C. § 1028(a)(7)], identity theft, carries a maximum term of 15 years' imprisonment, a fine, and criminal forfeiture. In addition, an attempt to identity theft may cause the violation of “other statutes such as identification fraud (18 U.S.C. § 1028), credit card fraud (18 U.S.C. § 1029), computer fraud (18 U.S.C. § 1030), mail fraud (18 U.S.C. § 1341), wire fraud (18 U.S.C. § 1343), or financial institution fraud (18 U.S.C. § 1344)” all of which may bring about ‘substantial penalties ­ in some cases, as high as 30 years' imprisonment, fines, and criminal forfeiture’ (as cited in Department of Justice). Some other agencies work with the judiciary system to prosecute identity theft and fraud cases are Federal Bureau of Investigation, the United States Secret Service, and the United States Postal Inspection Service. 3. Non-governmental organizations In the United States, there are several nongovernmental organizations which also provide the public with identity theft advices and assistance. Some of them are; American Association of Retired Persons, Better Business Bureau – Alert, Better Business Bureau -- Eastern Massachusetts/Maine/Vermont, CalPIRG, Center for Democracy and Technology, National Association of Attorneys General, National Consumers League, National Fraud Information Center, and Privacy Rights Clearinghouse (Source: The US Department of Justice). What to do Federal agencies give detailed instructions to customers on what to do once they find their identity is stolen or misused. Obviously the first action required is to act quickly to reduce any damage done to the victim’s personal credit record. This may help the person to prevent the thief from making further use of the stolen identity. The next step is to inform the police and the investigation agencies. It is important to keep all documentation regarding the theft in a clearly organized way so that it can be readily accessible for the investigators. The victim can maintain a chronology of actions instead of leaving everything to the law enforcers. Businesses that have established fraud accounts have to be informed of the felony by certified mail, and return receipts and a copy of each letter have to be kept. The victim must ask the law enforcement officials of the particular region where he believes the theft took place to issue a police report pursuant to the crime. The customer must cooperate with the investigators in every sense and give them as much information he can including but not limited to the copies of all documentation. It is also advisable that the petitioner should demand the copies of the police report for future reference. He can handover those to the banks, creditors, credit reporting-agencies and insurance companies as well. The on time intervention of the credit-reporting agencies will prevent the thief from applying for and receiving more credit in the stolen identity. A fraud alert will be placed in the victim’s file once the case is reported to any one of the three credit reporting agencies. Once the case is confirmed, the fraud alert will be placed on the victim’s credit report at the three agencies within 24 hours. As further steps, the agencies will send free copies of credit reports to the victim, and prospective creditors will be insisted to contact the person before approving any new credits. The credit reporting agencies will also enable the ‘Credit Freeze’ facility to the victims account in addition to the fraud alert so that the victim’s file would not be shared with would be creditors. This facility can be activated even before a theft so as to ensure the safety of one’s identity. Analysis The above discussed points, statistics, and legal and ethical issues indicate that ‘identity theft by a family member’ as a crime is also pacing with technological development. Admittedly, this is an area where legal intervention is not easily possible as the victim and criminal belong to same family and victims are often reluctant to proceed with legal actions against the other. Although various governmental systems including Credit Reporting Agencies, The United States Department of Justice, Federal Trade Commission, the Internal Revenue Service, and many other local and federal level nongovernmental organizations work relentlessly, defining a specific preventive method especially for the abuse of child identity is not made possible yet. Elder members of the family have several options to ensure the protection of their sensitive information namely that of credit card, SSN, and other PINs. In contrast, when it comes to children, the safety of their identity solely depends on their parents’ decision and integrity. In order to ensure the safety of children’s identity, SSN alone should not be the proof of identity for opening accounts. There should be laws that restrict the unwanted use of children’s identity including SSN as requirements for enrolling in schools. Financial institutions and credit issuers should be insisted to verify the identity of the applicant through more proof of identity before the approval of the application. Activating ‘Credit Freeze’ facility should be made mandatory for children’s SSN. Altogether, the issue can be addressed well only through legal amendments, awareness, and the coordination of various agencies working on this. Conclusion Identity theft by a family member is family betrayal and a heinous crime that has far reaching negative impact on the victim, family, and the very person involved. Statistics provided by FTC show that the crime is a unique form of identity theft that requires immediate and effective legal intervention which is now possible only through collaborative efforts of various agencies and legal amendments at the Federal and state levels. In spite of the legal limitations, every individual can take up certain steps to protect their identity from ‘personal identity thieves’. Among the victims of identity thefts, children constitute the most vulnerable group and hence they require ample legal protection. Unfortunately, the current law enforcement systems have not yet achieved this objective effectively. References Cullan, T. (2007). The Wall Street Journal. Complete Identity Theft Guidebook: How to Protect Yourself from the Most Pervasive Crime in America. Random House LLC. Federal Trade Commission. (March 2011). Consumer Sentinel Network Data Book for January-December 2010: 1-98. Retrieved from http://www.ftc.gov/sentinel/reports/sentinel-annual-reports/sentinel-cy2010.pdf Federal Trade Commission. Consumer Information. Child identity theft. Retrieved from http://www.consumer.ftc.gov/articles/0040-child-identity-theft ID Analytics. (Sep 20, 2011). ID Analytics Study Finds Six Million U.S. Parents And Children Inappropriately Sharing Identity Information. News Release. Retrieved from http://www.idanalytics.com/news-and-events/news-releases/2011/9-20-2011.php Identity Hawk. Your Identity Thief Could Be Your Sibling or Child. Retrieved from http://www.identityhawk.com/Your-Identity-Thief-Could-Be-Your-Sibling-or-Child Lipka, M. (Oct 21, 2013). Identity theft among family members affects millions. Reuters. Retrieved from http://in.mobile.reuters.com/article/economicNews/idINIndia-60052120111021 Marshall, R. (April 6, 2010). Father guilty of child identity theft. Carroll Country Times. Retrieved from http://www.carrollcountytimes.com/news/local/article_69a510b8-4133-11df-9116-001cc4c03286.html Roddel, V. (2008). The Ultimate Guide to Internet Safety. Lulu.com. Google Books. Smith, G. (Nov 1, 2012). Family Secrets: Parents Prey On Children's Identities As Victims Stay Silent. Huffington Post. Retrieved from http://www.huffingtonpost.com/2011/11/11/child-identity-theft-parents-credit-fraud-debt_n_1010093.html The United States Department of Justice. Retrieved from http://www.justice.gov/criminal/fraud/websites/idtheft.html Read More