27
Jun

What Is Identity Theft?

Consider the following scenario: After weeks of test drives and some negotiating with auto dealerships, you finally decide on the new car you want to buy. You’re able to make a significant down payment, and choose to finance the balance with a loan provided by the manufacturer. You have visions of leisurely weekend drives through the country – but they suddenly come to a screeching halt when your salesperson tells you that your loan has been turned down. Like many people, you carry some debt with a mortgage, but you pride yourself on making timely payments on all your bills.

In order to determine why your loan was denied, you order a copy of your credit report. When it arrives, you are surprised to see there are accounts under your name that you never opened- and none of them have been paid. Your existing credit card balances are higher than you remember them being since paying your last bill. How could this happen? You may have been the victim of identity theft.

On October 30, 1998, Congress passed the Identity Theft and Assumption Deterrence Act. The law defines identity theft as the following: when someone, “knowingly transfers or uses, 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.

While once a virtually unknown crime, the National Association of Attorneys General (NAAG, 2002) reports that between one-half and three quarters of a million people are now plagued by identity theft each year. The increased awareness of this crime has promoted the Federal Trade Commission (FTC) to support a bill called the Identity Theft Penalty Enhancement Act. It is currently under review by Congress and, if passed, will establish harsher penalties for perpetrators of identity theft crimes.

-Robert Catalano