Identity fraud (often called "identity theft") is a major concern in the
Information Age. In the most common instance of identity fraud, criminals use
information obtained wrongly to take out credit cards and charge goods in the
names of others. This costs a great deal of money for credit card companies, who
generally suffer the losses, and it causes heartache for the victims, who must
struggle to prove that they did not make the purchases that have been attributed
to them. Though commonly referred to as a "privacy" problem, identity fraud is
more accurately a financial crime.
Many proposals to limit identity fraud cast the net very broadly
indeed. Because information is the "instrument of crime" in identity fraud, some
proposals would limit the use of information by law-abiding citizens and businesses just
to get at the criminals. The sale of credit header information, for example, is often
cited as a main cause of identity fraud, though direct evidence of this is scant.
Outlawing the sale of credit header information has been proposed.
As the Federal Trade Commission reported in 1997, "convenient access
to . . . information about individuals . . . confers myriad benefits on users of
these services and on society." Identity information is an important part of a
smooth-running, efficient economy, and of criminal and civil justice. Imposing
broad limits on use of this information to get at identity fraud could impose
larger costs society-wide than identity fraud imposes today.
Because they suffer enormous financial losses in cases of identity fraud, financial
services companies are searching for ways of protecting themselves and their
customers. They should be assisted by government in pursuing identity fraud as
the crime that it is. They should resist the urge to view information with many lawful
beneficial uses as an accessory to crime.
identity theft Web page, WhatIs.com
Internet Fraud Complaint Center,
Federal Bureau of Investigation and National White Collar Crime Center
Identity Fraud: Information on Prevalence, Cost, and Internet Impact
is Limited, General Accounting Office (May 1998)
Reference Services: A Report to Congress, Federal Trade Commission (December 1997)
Report to the Congress Concerning the Availability of Consumer Identifying
Information and Financial Fraud, Board of Governors of the Federal Reserve System