Abstract

Culprits of identity theft are the modern day con artists that are able to convince and persuade people out of their money by promising their victims a portion of wealth which will never come to be. This paper will describe what is classified as identity theft, how people become victims of this crime and how people can avoid being becoming a victim to this popular means of deception in the electronic world.

On the average one hundred thousand people are affected by identity theft in the United States per year and over two billion dollars in revenue is stolen as shown in the surveys that were conducted in 2003 -2006 (Anderson, Durbin & Salinger). Because of this threat the consumer becomes skeptical of online transactions which cause loss of business to many retailers as they are based solely on internet sales. For the retailer to make sure that the consumer is protected from fraudulent transactions and the possibility of their personal information to be at risk of being intercepted by others, the retailers need to incorporate special systems onto their site and have special programs that could make the purchasing of items from their business complicated for the consumer and will also raise the price of the goods to offset their loss on the security measures. The way people are committing the crimes of identity theft are only limited by the imagination of the person that commits these types of crimes. The source can be from someone impersonating another person, stealing credit card information, social security information, personnel hacking into computer systems and retrieving valuable personal and account information and then using this information to get credit delivered to them using someone’s else’s identity. In the new multimedia world people are able to forge a complete check with false account information or stolen account information and obtain money and goods from all over the nation without ever being seen or traced due to the complexity of the movement of the criminal. The way people are obtaining information from their victims is either through the email system, by gathering the information from paper or articles that the victim threw away or by contacting them in some other form such as regular mail or by calling the victim. The person that is trying to obtain the information will state that your account from a banking institution or some other institution has been compromised and that they would like for you to confirm your account information with them over the telephone so they can trace the action, when in fact the compromise has not happened as of yet but will soon after the victim gives the person their information. Other ways that people are obtaining this information is by making web sites that look identical to the website that the victim is used to going on like on line banking. The fake web site will have a spot to put your username and password in and then it will record the responses and will send the victim to another web page that states that the web page they are looking for is in periodic maintenance. The person that obtained this information now has complete access to the person’s bank account information. In 2005 the Military pay and accounting system known as My Pay had this form of deceptive fake webpage and the person(s) that was obtaining the information had total access to start pay transfers and make bank account changes. For soldiers that were deployed to foreign countries they would not even know this action had happened until months later when it makes it almost impossible to trace. When the soldier did notice that the transactions took place it was extremely difficult for the soldier to prove that it was not him that authorized the transaction in the first place. Ways to reduce the chance of becoming a victim to identity theft is to make it more difficult for unauthorized person’s to obtain valuable personal information. There are a number or safeguards that have been enacted to help consumers with the protection of their personal information such as the Gramm–Leach–Bliley Act of 1999 which requires financial institutions to maintain safe-186 Journal of Economic Perspectives guards to protect the financial information of their customers; the Fair and Accurate Credit Transactions Act of 2003 requires credit reports to be disposed of in a way that reduces the risk of disclosure to unauthorized parties; and the Federal Trade Commission Act prohibits unreasonably lax policies for protecting consumer data. The President’s Identity Theft Task Force (2007, Vol. 2, Part A) provides a more thorough discussion of federal laws governing data security. Another way for consumers to protect their identity is to freeze their credit reports that allow only the information that the owner allows to be disclosed and to whom. Thirty seven states and the District of Colombia have enacted the credit freeze law but some states make this action available to only people that are victims of identity theft. Though this law helps consumers limit the hazard of their information being distributed to the wrong sources it also makes for many burdens on the consumer who has their credit frozen when they want to obtain credit for themselves. They will have to go through more hoops to be able to allow the financial organization to access the information that will be required to approve the loan (Anderson, Durbin & Salinger). Though identity theft is a major concern and problem in today’s society people can do things to make themselves less of a target to the people that are trying to commit these crimes. People need to understand what identity theft is and what they need to do to control it. This means consumers need to be aware of the web sites they are purchasing goods from, whether the site is trusted or not or if there are any negative remarks about this company from the better Business Bureau, if some one calls and wants information about your account or personal information do not give the information over the phone at that time and recall the place that is stating they need your information like your bank. Another big deterrence is for people to shred their personal information instead of just throwing it away in the trash. Criminals have no shame in going through trash to obtain information that will prove to be profitable in the future (Stafford).

Reference:

Anderson, K. B., Durbin, E., & Salinger, M. A. (2008). Identity Theft. The Journal of Economic Perspectives, 22(2), 171-192. Retrieved from http://dx.doi.org.ezproxy2.apus.edu/10.1257/jep.22.2.171 In this article, the authors discuss what is (and is not) known about the prevalence and cost of Identity theft, they describe the institutional framework in which Identity theft takes place, and consider some of the main policy issues associated with the problem. Identity theft is made possible by the nature of modern payment systems. In the modern economy, sellers are willing to offer goods and services to strangers in exchange for a promise to pay, provided the promise is backed up by data that link the buyer to a specific account or credit history. Identity theft involves acquiring enough data about another person to counterfeit this link, enabling the thief to acquire goods while attributing the charge to another person's account.

LoPucki, L. M. (2001). Human Identification Theory and the Identity Theft Problem. SSRN Electronic Journal. doi:10.2139/ssrn.263213 Retrieved from http://search.proquest.com.ezproxy2.apus.edu/docview/203694522?accountid=8289
The author presents an alternative solution to the problem of identity theft. This solution reconceptualizes the problem as one of human identification rather than theft. The problem is not that thieves have access to personal information, but that creditors and credit-reporting agencies often lack both the means and the incentives to correctly identify the persons who seek credit from them or on whom they report. The proposed solution set forth addresses both of those inadequacies by describing a physical system that would make it possible for consumers to control the process of their own identification. The system would be voluntary for all participants, but creditors and credit-reporting agencies that chose to identify and report on consumers without following the consumers' instructions would be liable for any resulting misidentifications. Understanding the competing proposals for solving the identity theft problem requires an understanding of the process of human identification and the role that misidentifications play in identity theft.

STAFFORD, M. R. (2005). Identity Theft: Laws, Crimes, and Victims. Journal of Consumer Affairs. doi:10.1111/j.1745-6606.2004.tb00863.x Retrieved from http://search.proquest.com.ezproxy2.apus.edu/docview/195896250?accountid=8289