By now, you’d be hard pressed to speak with someone who hasn’t already been a victim of identity theft themselves, or at least know someone who has had their good name compromised. From account takeovers to stolen funds, to social media hacks, identity theft has become a regular threat to our everyday lives, and the numbers continue to grow as our world becomes increasingly digitalized. Some 15.4 million consumers were victims of identity theft in 2016, with combined losses equaling $16 billion. That’s an increase of 16 percent from 2015 and the highest figure ever recorded (the 2017 numbers aren’t out yet!). Not to mention that in the U.S., the FTC continues to report that scams and identity theft are a serious and growing problem. Since we are in tax season right now, the latest report from the FTC reported that 29 percent of identity theft victims indicated that their data was used to commit tax fraud.
The effects of identity theft can be devastating for individuals and businesses alike. Whether your reputation is sullied through a social media takeover, or your financial information is used to fraudulently obtain a loan, it’s an extremely personal violation that can take hundreds of hours and thousands of dollars to repair. Not to mention that it can be very difficult, and sometimes nearly impossible, to determine who is responsible.
Successful identity thieves are cunning criminals. They often work behind the scenes and remain hidden in the shadows of the black market or Dark Web. Since fraudsters operate covertly, it can make victims feel helpless or frustrated in their pursuit of justice – but you should know there are both state and federal laws to protect consumers.
Due to the rise of identity theft and its significant consequences, the United States government passed the Identity Theft and Assumption Deterrence Act in 1998. Under this act, it is a federal crime for a person who “knowingly transfers or uses, without lawful authority, a means of identification of 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 law.”
With no slow-down in the rate of identity theft, Congress then passed the 2004 Identity Theft Penalty Enhancement Act, which increased the punishment for “aggravated” identity theft. This act requires courts to levy an additional 2-year sentence for general offenses, and 5 years for terrorism-related offenses.
In addition to being a federal crime, punishment for identity theft varies based on state and local laws. Like any other crime, the charges depend on the intent and severity of the damages caused. That determination comes from the investigation of agencies which could include police, federal bureaus of investigation, the Federal Trade Commission, the IRS and more.
Here are some of the consequences for those found guilty:
Fines are common for any criminal convicted of identity theft. The fine will be commensurate with the charges levied, whether a misdemeanor or felony.
The guilty party will be ordered to compensate the victim for all their financial losses. That not only includes the initial theft, but also any lost wages due to time out of work to restore their identity, legal fees and even damages from emotional distress.
Committing identity theft can lead to significant incarceration. Aggravated identity theft is punishable by a mandatory minimum sentence of 2 years, which can increase based on the severity of the crimes.
In rare cases, first-time offenders that didn’t inflict major harm can avoid jail time for identity theft. They will still be responsible for following court orders as well as paying restitution and fines.
My Personal Experience with Identity Theft
A few years ago, well before I joined IdentityForce, my husband had filed our tax return, just as we had any other year. However, this time was different. Our tax return was rejected. We were notified that someone had already filed under our Social Security Numbers.
In fact, we had to go through a slew of paperwork and phone calls to first prove we are who we say we are, and then show that we were victims of identity theft. This caused hours away from the office, emotional stress at home, the general fear of “what happens now” and wondering whether our children were also impacted, as their Social Security Numbers were also on our tax forms.
While we were working with the IRS, checks started to arrive at our home from the government in the amounts of 5K, 10K, even 20K dollars! Whomever had stolen our identities neglected to change where the checks should be sent.
After about 8 months, we finally received our tax refund, but the following year when we filed, we were audited, as our Social Security Numbers had been flagged.
In this case, we were one of many victims associated with stolen identity tax fraud and a money laundering scheme. The IRS, the U.S. Attorney’s Office, and the police were all involved in prosecuting the case.
You can see from the press release below, the accused perpetrator pleaded guilty and was later sentenced to 37 months in prison and ordered to pay $510,358.48 in restitution following a stolen identity tax fraud and money laundering scheme.
Are You Protecting Yourself?
Despite the threat of punishment, identity theft continues to rise – and nobody is off limits. Here are 10 Privacy Tips to Increase Your Security Today, and also an eBook on Insights, Trends, and Perspectives on Protecting Your Digital World.