Thesis on "Economic Impact of Online Identity Theft on Consumers"

Thesis 20 pages (5767 words) Sources: 10 Style: APA

[EXCERPT] . . . .

Economic Impact of Online Identity Theft

In evaluating the research necessary for the paper on Identity theft and its economic impact, it was important to understand the necessary elements that compromise such a project. These components were an evaluation of the term and types of identity theft and how it has changed over time, the current state of Identity Theft in the computer age and the possible legislative and judicial remedies and safeguards in place. There fore the literature would need to be in these three areas of definition and history; current trends and cause; and governmental response. This review will present a thematic description of these three components through the literature used in this research.

One of the initial references in this type of research begins with a standard search of the encyclopedia, in this case the Columbia Encyclopedia (2007). It gives the generic definition of Identity Theft, which is the misappropriation of the idiosyncratic information of an individual in order to commit fraud, theft or other crimes. Regarding an individuals personal data such as date of birth, social security numbers and the like can be used to purchase items online or open cellular phone numbers and/or bank accounts etc. They may also use this information when their own personal identification may cause them trouble, as with having a criminal record.

Identity theft not only causes financial loss but almost always affects a person's credit rating as well. This is also propounded in the article by Bielski (2001, p. 27) in which he views this as the duplication of a person, almost like the process of cloning. This helps to cement the creepy and intrusive nature of Identity Theft as he more dramatically calls it the "usurpation of another's self" by stealing the vital and unique substantiating information that makes us our particular selves in this society.

Identity theft has been around for a very long time, long before the advent of the internet and computers. It was still the theft or at least the copying of another person in order to substantiate yourself within a community. In modern times there are many levels and parameters that this crime can reveal itself. A sergeant with the Los Angeles county police department, Sunil Dutta, reveals some of these unique attributes as well as the fact that most of the perpetrators get away "scott-free." (2007, p. 290) Sergeant Dutta also reports that in certain cases the Identity Thief can commit crimes under the assumed identity, registering his own fingerprints in the stolen name, and the victim can be in very serious trouble. He analyzes some of the usual methods of ID theft, but some that may not be so apparent. ID thieves can rummage through a garbage pail and find gold. Tossing out those offers of credit along with any other personal information is a recipe for disaster. Lost or stolen wallets are another simple way of attaining enough information to ruin a person.

There are countess other scams and cons that can be perpetrated when doing some of the what may seem the simplest things. The internet is an obvious "use with caution" system, but sometimes one can still give up enough personal facts without realizing it. Posting a resume online, with phone number and schools attended, can give enough information to a would be ID thief. (Dutta, 2007, p. 290). Telemarketing frauds and bogus e-mails promising the transfer of fortunes are other methods of ID theft (Alt, 2007 p. 47). Even the personals, which can be inherently dangerous to begin with, often find ID victims plentiful. (Alt, 2007 p. 81). Home health caretakers have access to great deal of information form a unwary client as well. (Alt, 2007 p. 99).

Statistics are plentiful and growing in the area of Identity Theft. The Department of Justice tracks the costs of ID theft and one of these costs is in the criminal justice system itself. The extremely difficult nature of not only prosecuting Identity Theft criminals, but even discovering these crimes is enormous. (Cost of Identity Theft, 2008) in fact many people simply choose to try to get their lives back on track and often do not pursue criminal prosecution in the courts because of the almost insurmountable difficulties involved. (Federal Trade Commission, 2007)

Historically, what we know as ID theft today came with the dawning of the age of credit cards and plastic money. Not only did create a rise in fraud and ID theft, but a totally different consciousness regarding money and how it is spent (Manning 2000). Originally called charge plates, Credit Cards are one of the most vulnerable areas of ID theft. (History of Credit 2008) now, several levels of security are in place to help prevent the online use of stolen credit card numbers such as require special ID codes and answers to security questions. Also, there are services in place to minimize the damage a stolen credit card can cause. (Holmes, 2007) Electronic Fund Transfers (EFT's) are another area of potential risk. Any transfer of funds that does not require the physical presence of the customer always has a potentially higher risk of fraud and theft. (Guttman, 2003)

There is also the problem that has been termed Negligent Enablement that has occurred when Identity Thieves create bogus accounts at store that do not have the victim as a real customer. Many businesses refused to take any action on the victim's behalf, or even so much as talk to them to help them clear up this fraudulent activity. (Howard, 2005) Now there is in place legal precedence for making corporations ultimately responsible for ascertaining the true identity of their customers as well as assisting victim of Identity theft with adequate resolutions and remedies.

In the criminal justice system Identity Theft is often linked with computer crimes, or at least has some connection with the Internet and the tremendous access to information as well as banking and credit card transactions. This became even more difficult when the nature of legal jurisdiction became involved. A high percentage of the time the victim and the criminal an in entirely geographically different locations, often outside the United State, bring to beat extradition difficulties and other legal problems. (Jacobson & Green, 2002) of the Fair and Accurate Credit Transactions Act of 2003 or FACTA was an important step in helping to ameliorate the difficulties involved in prosecuting Identity theft criminals. (Linnhoff & Langenderfer, 2004)

There are also concerns for privacy, both for Identity Theft Victim as well as the consumer who has not been affected, but may have some of their privacy rights eased due to the need of government monitoring of some of the Internet's more vulnerable areas. This is now a concern of the ACLU and of the organizations trying to balance citizens' rights and the laws that protect them from ID theft. (Thierer & Crews, 2003) Computer Crime in general has been notoriously hard to detect as well as prosecute. Many companies often do not reveal the extent of on outside intrusion into their data network, not wanting to let the public know of their security inadequacies. (Yang & Hoffstadt, 2007) This has until recently been a major stumbling block to law enforcement, but is slowly giving way to greater due diligence and transparency to the public.

Up until 2004 these number were on the rise, but thanks to law enforcement and better legal remedies the situation has come under some control. But this due diligence has to extend to a public that is often too willing or unmindful of their own responsibility regarding their identity. (Svoern, 2004) There always new and more efficient techniques for thieves to steal identity, like phising and other nefarious Internet tools (Stafford, 2004). However the only remedy is for not only the government and corporations to have heightened security and better fact checking protocols, but for the consumer to keep a watchful eye on their wallets, their e-mails and their credit scores.

Economic Impact of Online Identity Theft

While it may seem that identity theft is something new, it is a crime almost as old as there are names. It has even been romanticized in such tales from the legend of King Arthur and the Prince and the Pauper to more modern versions as clones in the Sixth Day and face transplants in the movie Face Off. Although nothing new, Identity Theft has increased exponentially over the past couple of decades. This has primarily been due to the proliferation of the World Wide Web and the potential access to electronic information. However it is also in no small part due to the unfortunate ease with which information can be accessed by credit card agencies and other financial institutions as well as the low threshold of security when verify identity in certain situations.

This paper will revue the current meaning of identity theft as well as the various forms it can take. There will be research presented on the various institutions that are… READ MORE

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