The Average Victim Of Identity Theft Learns Of The Theft How Many Months After The Theft?

Identity Theft: The Scope of the Problem

By Jonathan J. Rusch - Deputy Main, Fraud Section, Criminal Division - Us DOJ
United States Attorneys' Bulletin, March 2008

I. Introduction

Identity theft is considered to exist one of the well-nigh pervasive forms of white-neckband criminal offense in the United States. Co-ordinate to an Oct 2006 survey by Javelin Strategy & Enquiry, more than viii.4 one thousand thousand U.S. adults were victims of identity theft in the preceding year. Rachel Kim et al., 2007 Identity Fraud Survey Report, Javelin Strategy & Research, February 2007, abridged version. While this crime takes many forms—from local vehicle pause-ins and trash theft (see, e.grand., United States v. Gonzales, 7:04 CR021-R (N.D. Tex., Oct. 21, 2005), to international Web sites gathering personal data (see Press Release, Sophos, The Italian Chore:  26 arrested for Poste Italiane phishing attack (July 16, 2007)) "it invariably leaves victims with the task of repairing the harm to their lives." President'southward Identity Theft Task Force, Combating Identity Theft:  a Strategic Program, President's Identity Theft Chore Force, April 2007, page one.

Two. Types of damage from identity theft

A. Financial harm

In the amass, victims of identity theft suffer substantial losses. Estimates of aggregate losses due to identity theft vary, but the President's Identity Theft Task Force stated that "the data show that annual monetary losses are in the billions of dollars." Id. at 11. The 2006 Javelin Enquiry survey found that losses to businesses and others due to identity fraud totaled $56.6 billion. Rubina Johannes et al., 2006 Identity Fraud Survey Written report, Javelin Strategy & Enquiry, January 2006, abridged version.

There are many ways in which victims of identity theft may suffer direct fiscal harms, varying with the types of data that identity thieves obtain and the ways in which that information is used. These include misuse of their existing credit cards and debit card accounts, opening new accounts (including credit or debit card, loan, and utilities) past criminals, issuance of government benefits or services in the victims' names to unqualified individuals, and purchases of motor vehicles and other valuable items with the victims' funds or credit. Run across, due east.one thousand., Federal Trade Committee, Take Charge:  Fighting Back Confronting Identity Theft, Feb. 2006. Victims generally are not liable for debts that identity thieves create in their names. If the misuse involves a consumer's existing credit card business relationship, it can exist relatively easy for the consumer to remedy the situation by calling the card issuer, reporting the fraudulent transactions, and providing supporting information. If the misuse involves a consumer's existing debit carte du jour or checking account, the victim should ultimately be able to have the fraudulently obtained funds restored to the account, awaiting resolution of the merits past the financial institution. The consumer, however, may be temporarily deprived of access to those funds. In addition, in cases involving cosmos of new credit carte du jour accounts, the victim may not acquire of the identity theft until a creditor or debt collector contacts him or her. That contact may not take place until after the identity thief has already used those accounts and amassed substantial debt in the victim'southward name.

Unfortunately, victims may have to spend hundreds, if non thousands, of dollars recovering from the offense. Expenses may include notary fees, certified mailings, hiring of counsel, and lost income. Nonfinancial losses, such as lost time spent correcting credit reports, disputing fraudulent accounts, and obtaining new identity documents, also can exist substantial, equally described below.

Although many cases of identity theft involve smaller amounts of money, ranging from a few dollars to a few hundred dollars, other identity thefts can lead to more than substantial losses. The 2006 Javelin Strategy survey institute that, while the median fraud corporeality per victim was $750, the hateful fraud amount per fraud victim was $five,720. Rubina Johannes et al., 2006 Identity Fraud Survey Report, Javelin Strategy & Research, January 2006. Because the median (the midpoint of the range of losses per victim, where half are below and half above that midpoint) is substantially lower than the mean (the total losses divided past the number of victims), these data bespeak that many identity theft victims have lost thousands of dollars, if not more. See, e.g., National Institute of Standards and Engineering (NIST)/Sematech, Technology Statistics Handbook § one.3.five.one (July 18, 2006). While losses of this magnitude can exist burdensome for more affluent individuals, they are devastating for persons of more than small-scale ways. Two instances that the President's Identity Theft Task Force cited in its recently-issued Combating Identity Theft:  a Strategic Programme show how substantial a unmarried victim'southward financial losses tin be.

[I]n July 2001, an identity thief gained command of a retired Army Captain'south identity when Army officials at Fort Bragg, N Carolina, issued the thief an active duty military identification card in the retired captain'due south name and with his Social Security number. The military identification, combined with the victim's then-excellent credit history, allowed the identity thief to go on an unhindered spending spree lasting several months. From July to Dec 2001, the identity thief acquired goods, services, and cash, in the victim'due south proper noun, valued at over $260,000. The victim identified more than than sixty fraudulent accounts, of all types, that were opened in his name:  credit accounts, personal and motorcar loans, checking and savings accounts, and utility accounts. The identity thief purchased two trucks valued at over $85,000 and a Harley-Davidson motorbike for $25,000. The thief too rented a house and purchased a time-share in Hilton Head, South Carolina, in the victim'southward proper name.
Combating Identity Theft:  A Strategic Plan, President's Identity Theft Job Force, Apr 2007, page x.

In another example, an elderly adult female suffering from dementia was victimized past her caregivers, who admitted to stealing as much as $200,000 from her before her death. The thieves not but used the victim's existing credit card accounts, but also opened new credit accounts in her name, obtained financing in her proper name to purchase new vehicles for themselves, and, using a fraudulent power of attorney, removed $176,000 in U.S. Savings Bonds from the victim's safety-deposit boxes.
Combating Identity Theft: A Strategic Program, President'south Identity Theft Task Force, April 2007, folio 10.

It should be noted that identity-theft victims may have to spend more de minimis amounts of money out of their own pockets to resolve their situations with creditors, or administrative or law enforcement agencies. The 2007 Javelin Strategy survey establish that the average victim of existing account fraud paid $587 to resolve the problem. The average victim of new account fraud paid $617 to resolve the problem. Rachel Kim et al., 2007 Identity Fraud Survey Study, Javelin Strategy & Inquiry, February 2007.

B. Nonfinancial harms

In improver to direct fiscal damage, victims of identity theft often suffer nonfinancial harms from which it may take essentially longer to recover. Amongst other things, victims whose financial accounts have been misused may suffer harm to their credit standing and general reputation in their dealings with legitimate businesses and government agencies.

1 reason that identity theft tin can be so subversive to its victims, [every bit the President's Identity Theft Task Strength noted,] is the sheer amount of fourth dimension and energy oftentimes required to recover from the criminal offense, including having to correct credit reports, dispute charges with individual creditors, shut and reopen banking concern accounts, and monitor credit reports for time to come problems arising from the theft.Combating Identity Theft:  A Strategic Plan, President's Identity Theft Task Strength, Apr 2007, page 49.

For case, victims often find it necessary to make multiple telephone calls and write multiple letters to consumer-reporting companies, creditors, and debt collectors. Those calls and letters typically depend on the victim spending still more time to gather the information and documents needed to prove that they are non responsible for the accounts that the criminal has created or transactions that the criminal has conducted in the victim'southward proper noun. Moreover, in some cases, when a criminal has used a victim'southward identity in the commission of a criminal offense, or in identifying himself to police force enforcement officers at or before the time of an arrest or showtime advent in a criminal prosecution, the identity theft victim may unknowingly have a criminal record incorrectly created under his proper noun. As a result, constabulary enforcement records, such every bit the National Crime Data Center, may mistakenly list the victim's proper name as existence associated with the criminal acts that the identity thief committed under the victim's name. This, in turn, can lead to mistaken arrests by law enforcement officers who rely, in good faith, on those law enforcement records.

The number of mistaken arrests of identity theft victims is believed to be extremely pocket-size in comparing to the estimated numbers of identity theft victims. Nonetheless, the following examples from media reports bear witness how astringent and long-lasting the effects of criminal identity theft can be.

California: In 2003, the State of California garnished the wages of a resident of the San Francisco Bay surface area, Jorge Arteaga, for failure to pay speeding tickets. At that time, Arteaga persuaded a judge that he was not the person to whom the tickets were issued, as the tickets pertained to a dissimilar automobile and a different accost, and the signature on the ticket was not Arteaga's. Later in 2003, Arteaga was arrested twice on drug-related warrants, but reportedly again persuaded judges that he was non the criminal in both cases. In March 2006, nonetheless, Arteaga was arrested on even so some other warrant in his proper noun, for allegedly driving on a suspended license. While other records supposedly showed that Arteaga was a parole violator with two auto theft convictions, Arteaga asserted he knew nothing well-nigh those crimes. Because of Arteaga's purported status as a parole violator, he was subject to a parole revocation hearing. At the hearing, the presiding commissioner reportedly looked at the mug shot of the actual criminal. Although Arteaga asserted that he was not the person in the photograph, the fingerprints associated with the rap sheet supposedly were Arteaga's. As a result, Arteaga was sent to San Quentin Prison. Arteaga was released from prison simply after his attorney reportedly wrote to the warden. A California Department of Corrections employee subsequently described the situation as "a pocket-sized clerical error," explaining that "we have two former inmates, both on parole with the same name and we ended up accidentally switching their fingerprints in the files." In January 2007, Arteaga reportedly obtained a judicial exoneration declaring that he was "factually innocent of the crimes committed by the imposter."
ID Theft Puts Innocent Homo In San Quentin, (KGO-TV broadcast six Feb. 20, 2007.

California:  In San Francisco, a woman arrested for cocaine possession falsely told court officials that her name was Stancy Nesby, and so failed to show up for subsequent court proceedings. A estimate reportedly issued multiple warrants for the arrest of Stancy Nesby. Based on the mistaken warrants, from July 2002 to September 2004, the real Stancy Nesby was detained or arrested and jailed 7 times by various California constabulary enforcement agencies. Five of the arrests occurred subsequently authorities in Shasta County, where the real Nesby was mistakenly arrested twice, reportedly asked the San Francisco Sheriff'south Department to remove the warrants from a state computer organization. Nesby eventually sued the City of San Francisco for the failure to remove the warrants from the system.
A victim who keeps getting arrested -- tangled in a case of identity theft, San Francisco Chronicle, September 21, 2004.

Wisconsin: In 1998, a man arrested on drug charges identified himself to police as Malcolm Boyd. A Janesville, Wisconsin resident, Malcolm Boyd, learned of the arrest and went to local police to correct the error. Iv months later, after a traffic stop, the real Boyd was arrested and detained on the same pending drug charges. After comparing Boyd'southward photo with that of the original private arrested on drug charges, the police released Boyd. Soon later on, Boyd was fired from his part-time job considering (according to Boyd) "he was accused of lying about his criminal record." The darkest side of ID theft, (MSNBC, Mar. ix, 2003) Some months subsequently, Boyd was laid off from a full-time chore, but denied unemployment benefits, because of his criminal record. Boyd was able to get those benefits reinstated, simply then had his commuter's license suspended for failure to pay traffic fines. The next year, Boyd learned that the man using his proper name had been arrested in a neighboring canton. To establish his innocence of those charges, the real Boyd provided his fingerprints to the local district attorney and afterward received court documents establishing his innocence. Nonetheless, Boyd was arrested and detained again in 2002 and 2003, but later released.

United Kingdom: An Andover, England resident, Simon Bunce, reportedly entered personal data on a supermarket shopping Web site then that he and his wife could store online. Thereafter, someone using Bunce's name and accost registered for a pornography Web site used past pedophiles. In connection with a United Kingdom law enforcement operation against child pornography, on ii occasions in 2004, Bunce was arrested and his house searched. Law later reportedly sent Bunce a letter saying they were non taking any further action in the case because they had not found whatsoever evidence of wrongdoing on his computers or media storage devices. The police publicly confirmed that Bunce was not charged with any offense.
Identity theft nightmare, Andover Advertiser, April 4, 2007.

Criminals in some instances take even used the identities of deceased persons to conceal their criminal condition or activities. For case, in Oct 2006, Michigan authorities arrested a convicted sexual practice offender on identity theft and forgery charges. He allegedly applied for a nascence document in the name of an babe who had died in 1972, then that he could move to the State of Oregon without having to register as a sex offender. Office of the Attorney General, State of Michigan, Up Sex Offender Arrested in Bizarre Identity Theft Case (Oct. 17, 2006)

More than recently, in April 2007, a Southern California woman was federally charged with stealing the identities of hundreds of deceased people and using their personal information to file fraudulent federal tax returns that sought more than $1 one thousand thousand in refunds. U.S. Chaser'south Office, Central District of California, Hawthorne Woman Charged with Stealing Hundreds of Identities of Dead People to File Artificial Tax Returns that Sought More Than $one One thousand thousand in Refunds (Apr. 12, 2007) Such behave can create significant issues for surviving family members and for executors of the deceased persons' estates in restoring the deceased persons' financial diplomacy and reputation.

III. Conclusion

The financial and human toll from identity theft can be devastating. As ane of the nigh pervasive forms of white collar crime in the U.s., it warrants focused investigative and prosecutive resources. The perpetrators of identity theft volition inevitably grow in number due to the lucrative nature of the offense, and they will likely increase in sophistication as technology evolves. Investigators and prosecutors must do the same to combat the problem.

Nearly THE AUTHOR

Jonathan J. Rusch serves as the head of the United States delegation to the United nations Crime Committee Expert Group on Fraud and the Criminal Misuse of Identity, the The states Co-Chair of the United States-Canada Mass-Marketing Fraud Working Grouping, and Chair of the national-level Mass Marketing Fraud Working Group. Since 1995, Mr. Rusch has been the Justice Section'southward coordinator for a series of multinational fraud enforcement operations, including "Operation Global Con" in May 2006 and "Operation Roaming Charge" in October 2004.

Mr. Rusch likewise serves as Executive Director for Consumer and Benefit Fraud of the Department of Justice'due south Hurricane Katrina Fraud Task Force. In that capacity, he oversees the Task Strength's national enforcement program with respect to clemency fraud, disaster-relief help fraud, identity theft, and other forms of consumer-related fraud. In addition, since May 2006 he has been serving as a central drafter and editor of the President's Identity Theft Task Force Strategic Program.

He has been the pb prosecutor in major fraud and public corruption prosecutions by the Department of Justice, including successful prosecutions of a erstwhile United States Treasurer, a House Sergeant at Artillery, and former Members of Congress, as well every bit ringleaders of various mass-marketing fraud schemes.

Mr. Rusch received the Attorney General's Honour for Fraud Prevention in 2006 for his work on the Hurricane Katrina Fraud Job Force, the Banana Attorney General's Accolade for Inter-Agency Cooperation in 2005 for his work in organizing and leading strategic law enforcement initiatives, the Chief Postal Inspector's Award in 2004 for his piece of work in fraud prevention and cross-border fraud initiatives, and the Attorney Full general'due south Distinguished Service Award in 1995 for his work in investigating the Business firm Bank scandal. Mr. Rusch likewise is an Adjunct Professor of Police at Georgetown University Police force Eye, where he teaches courses on Global Cybercrime Constabulary and Trial Practise, and Lecturer in Law at the University of Virginia Constabulary Schoolhouse, where he teaches Cybercrime.

This commodity is adapted from a report that Mr. Rusch drafted for the Criminal Process Commission of the American Bar Association Administrative Law and Regulatory Practice Section. The views herein are non necessarily those of the American Bar Association or any of its components.

References

Rusch, Jonathan J., "Identity Theft: The Scope of the Trouble", United States Attorneys' Message, March 2008, pages 1-5

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The Average Victim Of Identity Theft Learns Of The Theft How Many Months After The Theft?,

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