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CRS – Identity Theft: Trends and Issues

Identity Theft: Trends and Issues, Kristin Finklea, Specialist in Domestic Security. January 16, 2014.

“Policymakers continue to be concerned with securing the economic health of the United States—including combating those crimes that threaten to undermine the nation’s financial stability. Identity theft, for one, poses both security and economic risks. By some estimates, identity fraud cost Americans nearly $21 billion in 2012.2 Federal Trade Commission (FTC) complaint data indicate that the most common fraud complaint received (18% of all consumer fraud complaints) is that of identity theft. In 2012, for instance, about 12.6 million Americans were reportedly victims of identity fraud. This is an increase from the approximately 11.6 million who were victimized in 2011 and 10.2 million who were victimized in 2010. Mirroring this increase in the overall number of reported identity fraud incidents, consumer costs relating to these incidents increased in 2012; the average identity fraud victim incurred a mean of $365. Nonetheless, this cost is about 42% less than the average expense roughly a decade ago. An increase in globalization and a lack of cyber borders provide an environment ripe for identity  thieves to operate from within the nation’s borders—as well as from beyond. Federal law  enforcement is thus challenged with investigating criminals who may or may not be operating within U.S. borders; may have numerous identities—actual, stolen, or cyber; and may be acting alone or as part of a sophisticated criminal enterprise. In addition, identity theft is often interconnected with various other criminal activities. These activities range from credit card and bank fraud to immigration and employment fraud. In turn, the effects felt by individuals and businesses who have fallen prey to identity thieves extend outside of pure financial burdens; identity thieves affect not only the nation’s economic health, but its national security as well. Consequently, policymakers may debate the federal government’s role in preventing identity theft and its related crimes, mitigating the potential effects of identity theft after it occurs, and providing the most effective tools to investigate and prosecute identity thieves. This report first provides a brief federal legislative history of identity theft laws. It analyzes selected trends in identity theft, including prevalent identity theft-related crimes, the federal agencies involved in combating identity theft, and the trends in identity theft complaints and prosecutions. The report also discusses the relationship between data breaches and identity theft as well as possible effects of the FTC’s Identity Theft Red Flags Rule. It also examines possible issues for Congress to consider.”

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