Research Bulletin

              Technological innovation fuels identity theft fraud epidemic
By Sal Perri, ICJIA research analyst
Vol. 5, No. 3
October 2006
Research Bulletin
Illinois Criminal Justice Information Authority
Rod R. Blagojevich, Governor
Sheldon Sorosky, Chairman
Lori G. Levin, Executive Director
Research Bulletins are published periodically by the Il­linois Criminal Justice Information Authority. They focus on research conducted by or for the Authority on a topic of interest to Illinois criminal justice professionals and policy­makers.
This project was supported by Grant #03-DB-BX-0037, awarded to the Illinois Criminal Justice Information Author­ity by the Bureau of Justice Assistance, Office of Justice Programs, U.S. Department of Justice. Points of view in this document do not necessarily represent the official position
or policies of the U.S. Department of Justice.
For more information about this or other publications from the Authority, please contact the Authority’s Criminal Jus­tice Information Clearinghouse at 312-793-8550, or visit our website at www.icjia.state.il.us
Printed by authority of the State of Illinois, October 2006.
Stealing a person’s identity is a relatively new type of crime, but one that is threatening to become epidemic as technology evolves and provides innovative techniques to capture victim information. Unsuspecting millions of Americans already have been exposed to this crime.
In a recent case, a computer containing personal data of 26.5 million veterans discharged since 1975 was stolen from the home of a U.S. Department of Veterans Affairs analyst.1 The stolen electronic files also con­tained personal data for 1.1 million active-duty mili­tary personnel, 430,000 National Guard members, and 645,000 reserve members.2 The employee, who was not authorized to remove the computer from his office, was subsequently fired and the computer with the data, reportedly not accessed, was recovered.
Due to at least 15 major data breaches, millions of Americans in 2005 were also victims of large-scale information fraud. ChoicePoint Company sold private consumer data to con artists posing as legitimate ex­ecutives, triggering a surge of identity theft disclosures for months. Discount Shoe Warehouse Inc. had data for 1.4 million consumers stolen; CitiFinancial, data for 3.9 million customers stolen; Bank of America, data for 1.2 million government workers stolen; and Master­Card was hit by a data heist that could affect 40 million credit card users.3
Federal Trade Commission (FTC) Identity Theft Clear­inghouse Data statistics indicate 685,000 consumer fraud and identity theft complaints were received in 2005. Of those, 37 percent were identity-theft related, and consumers reported more than $680 million in losses from fraud.4 In 2003 the FTC estimated identity theft cost businesses, governments, and consumers more than $53 billion a year.5
Defining identity theft
The taking of a person’s identity for financial gain, to obtain credit or credit cards, steal money from a victim’s accounts, apply for loans, establish accounts with utility companies, rent an apartment, or find employment all constitute identity theft or identity fraud. Offenders can steal someone’s identity by using their social security number, birth date, address, phone number, or any other personal information. With this