Lawyer Article

Combating identity theft remains a top priority for the United States federal government, which just enacted another law designed to thwart identity thieves. This form of fraud, made easier by digital technologies, has exploded in recent years, and Congress continues to amend the laws protecting consumers from losing control of their financial identities.

On July 15, President Bush signed the Identity Theft Penalty Enhancement Act, providing longer prison sentences for knowingly using someone else's identity in the commission of certain federal crimes, including terrorism. The law adds a mandatory two years to prison sentences for criminals convicted of using stolen data in fraud-based offenses, and adds mandatory five years to the sentences of criminals using stolen data for terrorist offenses. The law also increases the penalties for "insiders" who use their positions to commit fraud or to help others commit fraud.

At the signing ceremony, President Bush explained that "when someone is convicted of mail fraud in a case involving stolen personal information, judges will now impose two sentences, one for mail fraud, and one for aggravated identity theft. Those convicted of aggregated identity theft must serve an additional mandatory two-year prison term."

This law follows on the heels of the 2003 amendments to the Fair Credit Reporting Act section 609, which entitles identity theft victims to receive a free copy of the application or other business transaction records relating to their identity at least every year. Under this Act, businesses must also provide these records to law enforcement agencies authorized by an identity theft victim.

In October of 1998, Congress had enacted the Identity Theft and Assumption Deterrence Act, creating a federal crime where a person "knowingly transfers or uses, without lawful authority, a means of identification or another person with the intent to commit, or aid or abet, any unlawful activity that constitutes a violation of federal law, or that constitutes a felony under any applicable state or local laws. Under this act, a "means of identification" includes a name, social security number, credit card number, or cell phone electronic serial number.

The United States Federal Trade Commission ("FTC"), the federal agency charged with fighting identity theft on behalf of consumers, has set up an ID Theft Clearinghouse at www.consumer/gov/idtheft, which keeps track of complaints and helps prosecutors. The FTC estimated that identity theft claimed 9.9 million victims in 2002, costing $53 Billion to American businesses and consumers.

Law enforcement is especially concerned with the practice of "phishing", whereby criminal trick consumers into entering their banking account and access numbers over the internet, and then use those numbers to steal the consumer's identities and/or to fraudulently use those accounts.

If you have any questions about the topic above, contact your lawyer or the Technology & Commerce Practice Group at Womble Carlyle Sandridge & Rice, PLLC.