Identity theft Identity theft occurs when someone uses another person's personal identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes. The term ''identity theft'' was c ...

involves obtaining somebody else's identifying information and using it for a criminal purpose. Most often that purpose is to commit financial fraud, such as by obtaining loans or credits in the name of the person whose identity has been stolen. Stolen identifying information might also be used for other reasons, such as to obtain identification cards or for purposes of employment by somebody not legally authorized to work in the United States. According to a

United States Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United Stat ...

study, in 2012 the direct and indirect cost of identity theft was estimated to be responsible for financial losses of $24.7 billion, approximately twice the $14 billion total cost of other property crimes. By 2014, losses to identity theft decreased to $15.4 billion, mostly due to a reduction in the number of high-value losses (the top 10% of cases). By 2016, the estimated cost of identity theft increased to $16 billion. In 2012, identity theft affected approximately 16.6 million people, approximately 7% of the U.S. population aged 16 or older. In 2014, identity theft affected approximately 17.6 million people, again approximately 7% of the U.S. adult population. It was estimated that approximately one third of Americans affected by a

data breach A data breach is a security violation, in which sensitive, protected or confidential data is copied, transmitted, viewed, stolen or used by an individual unauthorized to do so. Other terms are unintentional information disclosure, data leak, inf ...

ended up becoming a victim of financial

fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compen ...

in 2013, an increase from one ninth in 2010. When an existing credit card is exposed and then used for fraud, the average estimated loss is $1,251. When a

Social Security number In the United States, a Social Security number (SSN) is a nine-digit number issued to U.S. citizens, permanent residents, and temporary (working) residents under section 205(c)(2) of the Social Security Act, codified as . The number is issued to ...

is exposed and then used to open new accounts, the average estimated loss increases to $2,330. In 2015, a private study performed by Javelin suggested that incidents of identity theft remained steady from 2014, and that the losses associated with each instance of identity theft had decreased slightly.

Tax fraud

In 2012, identity theft was blamed for $4 billion of fraudulent tax refunds by the

Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory t ...

(IRS) and 770,000 taxpayers have been the victims of tax identity theft by 2013. A public-private initiative by the IRS and employers in 2016 resulted in a 50% drop in incidents of taxpayer identity theft reports. In calendar year 2016, the IRS stopped 883,000 confirmed identity theft returns. In 2022, the IRS indicted a man for identity theft and other crimes related to 76 fake charities registered to the same mailing address.

Medical identity theft

Medical identity theft involves the use of somebody else's identity or insurance information to obtain healthcare, or to bill for healthcare services that are not actually provided. It is estimated that medical identify theft can be more lucrative than credit card theft. At one black-market auction, a patient's

medical record The terms medical record, health record and medical chart are used somewhat interchangeably to describe the systematic documentation of a single patient's medical history and care across time within one particular health care provider's jurisd ...

sold for $251, while credit card records sold for 33 cents. Due to the ability of hackers to access customer data from large health insurance companies, concerns have been raised that health care companies are not doing enough to protect customer's financial and health data.

Data breaches

For purposes of identity theft, data breaches involve the unauthorized access of consumer data contained on computer systems, with the data being potentially subject to use for purposes of identity theft. The

Identity Theft Resource Center The Identity Theft Resource Center (ITRC) is a United States non-profit organization that provides identity crime victim assistance and education, free of charge, through a toll-free call center, live chat, website, podcasts, and social media. Th ...

said there were 662

es in the United States in 2010, almost a 33% increase from the previous year. Between January, 2015 and September, 2017, the

estimates that there were 7,920 breaches affecting more than one billion records that could lead to identity theft.

Incidents

On May 5, 2011,

Michaels Michaels Stores, Inc., more commonly known as Michaels, is a privately held chain of 1,252 American and Canadian arts and crafts stores, as of January 2021. It is one of North America's largest providers of arts, crafts, framing, floral and wall ...

, a craft store chain, sent an email alert to its customers revealing that its debit card terminals in 20 states had been compromised. Customers who made PIN-based purchases between February 8 and May 6, 2011 may have had their data exposed. A

class action A class action, also known as a class-action lawsuit, class suit, or representative action, is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member or members of that group. The class actio ...

lawsuit was filed against Michaels in the

county court A county court is a court based in or with a jurisdiction covering one or more counties, which are administrative divisions (subnational entities) within a country, not to be confused with the medieval system of ''county courts'' held by the hig ...

Passaic, New Jersey Passaic ( or ) is a city in Passaic County, in the U.S. state of New Jersey. As of the 2020 U.S. census, the city had a total population of 70,537, ranking as the 16th largest municipality in New Jersey and an increase of 656 from the 69,7 ...

over the incident. On April 17, 2014, Michaels confirmed a security breach at some of Michaels' stores and subsidiary Aaron Brothers from May 8, 2013 to February 27, 2014. Between July and September 2011, a $13 million scam resulted in the arrest of 111 people. The scammers used skimming devices to swipe consumer

credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the ...

information at retail or food establishments. According to the

Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction o ...

losses from identity theft in the United States cost about $1.52 billion in 2011. It is estimated that the IRS gave identity thieves $5 billion in refunds. In 2012, about 40 million sets of payment card information were compromised by a hack of

Adobe Systems Adobe Inc. ( ), originally called Adobe Systems Incorporated, is an American multinational computer software company incorporated in Delaware and headquartered in San Jose, California. It has historically specialized in software for the cre ...

.Skimming Off the Top; Why America has such a hiugh rate of payment-card fraud, 15 February 2014, The Economist On February 15, 2013, Rep. Debbie Wasserman Schultz (D, FL-23) introduced the Stopping Tax Offenders and Prosecuting Identity Theft Act of 2013 (H.R. 744; 113th Congress) into the

United States House of Representatives The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the lower chamber of the United States Congress, with the Senate being the upper chamber. Together they ...

. The bill would increase the penalties on identity thieves in the United States and change the definition of identity theft to include businesses and organizations instead of just individuals. Large U.S. corporations, such as

Target Corporation Target Corporation ( doing business as Target and stylized in all lowercase since 2018) is an American big box department store chain headquartered in Minneapolis, Minnesota. It is the seventh largest retailer in the United States, and a com ...

Home Depot The Home Depot, Inc., is an American multinational home improvement retail corporation that sells tools, construction products, appliances, and services, including fuel and transportation rentals. Home Depot is the largest home improvement re ...

Neiman Marcus Neiman Marcus Group, Inc. is an American integrated luxury retailer headquartered in Dallas, Texas, which owns Neiman Marcus, Bergdorf Goodman, Horchow, and Last Call. Since September 2021, NMG has been owned by a group of investment compani ...

and

Barnes & Noble Barnes & Noble Booksellers is an American bookseller. It is a Fortune 1000 company and the bookseller with the largest number of retail outlets in the United States. As of July 7, 2020, the company operates 614 retail stores across all 50 ...

, have been in the news after their credit card system was hacked. In 2014, a

malware Malware (a portmanteau for ''malicious software'') is any software intentionally designed to cause disruption to a computer, server, client, or computer network, leak private information, gain unauthorized access to information or systems, depr ...

intrusion at Staples resulted in a credit card breach. 119 stores were impacted between April and September 2014, and 1.16 million customer credit and debit cards may have been stolen. In October 2014, President

Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party (United States), Democratic Party, Obama was the first Af ...

announced that debit cards that transmit federal benefits like

Social Security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...

to Americans will be equipped with a security chip replacing the magnetic strip. The U.S. government will also apply the security chips and

personal identification number A personal identification number (PIN), or sometimes redundantly a PIN number or PIN code, is a numeric (sometimes alpha-numeric) passcode used in the process of authenticating a user accessing a system. The PIN has been the key to facilitati ...

s (PIN), to replace signatures of all government credit cards. The measure is expected to reduce fraud. ''

USA Today ''USA Today'' (stylized in all uppercase) is an American daily middle-market newspaper and news broadcasting company. Founded by Al Neuharth on September 15, 1982, the newspaper operates from Gannett's corporate headquarters in Tysons, Virgini ...

'' reported that an estimated 100 million people having been affected by breaches in 2014. In November 2014,

Sony Pictures Entertainment Sony Pictures Entertainment Inc. (commonly known as Sony Pictures or SPE, and formerly known as Columbia Pictures Entertainment, Inc.) is an American diversified multinational mass media and entertainment studio Conglomerate (company), conglom ...

suffered a

. On December 18, 2014, employees of Sony filed a

lawsuit against their employer claiming that Sony failed to take necessary actions to secure its employees personal information. The lawsuit was filed in U.S. District Court for the Central District of California . In 2015, there were 781 recorded data breaches in the United States, which compromised the security of over 169 million records. The frequency and severity of data breaches has led forty-seven states to pass security breach notification laws, to ensure that citizens are notified in a timely manner when their records have been exposed.

References

External links

* *{{cite web, url=https://www.justice.gov/criminal-fraud/identity-theft/identity-theft-and-identity-fraud , title=Identity Theft | CRIMINAL-FRAUD | Department of Justice , website=Justice.gov , date=2015-11-02 , accessdate=25 September 2017

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...