Identity Theft

Charles Carreon

Three hundred years ago in London, Jonathan Wild ran a gang of thieves who specialized in stealing information. No ordinary band of cut-purses and house-breakers, Wild was a gifted manager, and it was “his practice to give instructions to thieves, whom he employed, as to the manner they should conduct themselves, and if they followed his directions, it was seldom that they failed of success.” Wild's thieves were sometimes instructed to ignore rich pickings of silver plate and tea service over a book of accounts.

According to “The Newgate Calendar,” a compendium of 19th century British true-crime stories, Wild exercised great discipline over his gang, selling them out for their reward money to the police, who were always happy to buy a conviction on the cheap. Nor was there any hope for these petty criminals of escaping Wild's wrath, for he was “industrious to an extreme in his endeavors to surrender them into the hands of justice; and being acquainted with all their usual places of resort, it was scarcely possible for them to escape.” Thus Wild controlled his gang and its victims by extortion and blackmail, simply because he realized the value of information and had the knavish inclination to use it against people for his own benefit.

Essentially, that is the strategy behind identity theft, which has been called the “fastest growing crime in America.” The key to the crime is getting personal information about the victim, enough to impersonate the victim in today's modern non-face-to-face economy. Once they can impersonate you, they can get credit cards, open up checking accounts, rent cars, and do all kinds of other fun things with your identity. In fact, they could combine their credit card spree with a string of other criminal acts, making it look like you had gone crazy and were robbing liquor stores and passing bad checks in West Tennessee. Identity theft is not a laughing matter, if it actually happens. At a minimum, the victim will have to deal with closing down credit card accounts and getting false derogatory information off their credit report. At worst you could find existing lines of credit revoked, business crippled, and even nightmare scenarios such as being implicated in a crime ring yourself.

Most identity thefts occur because information that you entrusted to financial companies gets loose due to criminal activity within companies that have access to this data. We should be inherently mistrusting of a system that allows us to call up a stranger at an 800 number, who can access our account and provide details like our birth date, residence and business address, telephone numbers, social security number, etc. Who is this person and how do they know this? How much are they getting paid, and who are they hanging out with? Do they have a drug habit? All of these things are issues that affect identity theft, how it happens, and how it can be prevented.

At present, like many another legal problem that has been created by the revolution in information technology processing, government is caught flat-footed, with its hands in its pockets, giving out free dumb looks, as far as I'm concerned. Legislation to plug loopholes in financial, court records, and medical information processing is essential, but government is apparently more eager to maintain access to computer information about individuals, their lives and finances, than it is about protecting its citizens from a devastating crime that can ruin a business, an individual, a family. That leaves us where we usually are on the cyberfrontier, powerfully motivated to protect ourselves as quickly as possible from the consequences of something like an identity theft. The following discussion will give you some basic instructions on how to think about the problem, which in all likelihood will affect someone you know during the next year or two.

Oh, what about Jonathan Wild? How did he end up? Badly for him. For years Wild evaded prosecution, mainly because the laws didn't seem to precisely fit the style of his crimes. When finally brought to trial the first time, he was acquitted. But he was charged a second time while still in prison for the first crime, resulting from the continuing operations of his criminal associates. Convicted, he hanged at Tyburn on the 24th of May, 1725, after spending his time on death row in an alternately agitated and reflective state, discussing the spiritual consequences of suicide and the meaning of the words “cursed is everyone that hangeth upon a tree” with the prison chaplain. Apparently not inclined to repentance, The Newgate Calendar records, “Wild frequently declared that ... the service he had rendered the public in returning the stolen goods to the owners, and apprehending felons, was so great as justly to entitle him to the royal mercy.” No pardon was granted, but on reflection you can see his point. Many people who have had their identity stolen would consider it an acceptable resolution to be allowed to buy their good name back.

Since the DOJ calls the “fastest growing financial crime in America,” you'd expect that they would be all over it, aggressively prosecuting identity theft rings and obtaining hefty sentences for these up-to-date predators. This has not been the case. Although identity theft, or at least the theft of identity information, is unlawful in virtually all of the 50 states, and Congress enacted the Identity Theft and Assumption Deterrence Act, 18 U.S.C. Section 1028(a)(7), in 1998, there have been relatively few prosecutions. A DOJ report published in March, 2001 cited only four cases, one in California and two in Delaware, in which convictions have been obtained. Additionally, the DOJ described its successful prosecution of a drug-trafficking conspiracy that extensively utilized fake I.D. for the benefit of its criminal organization, but this case had nothing to do with what we really call identity theft, in that there were no “innocent victims” who had their credit ruined due to the conduct of the drug trafficking defendants.

Thus, one is left to scratch one's head. Here we have a law that makes identity theft a felony, the DOJ calling it the crime of the millennium, and massive governmental inaction. I don't want to dwell on this problem, but merely to flag it for your attention as we proceed through the rest of the topic, discussing how identity theft happens and what you can do to remedy it if it happens to you. After all, that is the focus of our book. However, I suspect that after reading through this material you will reach the same conclusion that I have — that the government really does not want to dig into the affairs of the large financial credit reporting agencies and the business of grading consumer debt. Particularly at the present time, the economy is surviving based upon a vast influx of credit directed to consumers, and thus the process of collecting and distributing information about consumer spending and borrowing patterns is a very valuable process for the economy as a whole. In order to avoid dragging down the credit reporting industry with additional expenses and safeguards, the government has taken a hands-off policy in order to keep the wheels of the economy spinning. As a result, lax control over consumer financial information seems to be the order of the day, and thus identity theft will continue to proliferate.