Identity Theft Victims To Be Compensated for The Time It Took To Restore Their Identities
Make Identity Thieves Pay: New Laws Would Protect Victims
Anyone who has been a victim of an identity theft crime will tell you that identity restoration is no picnic, as recovery from identity theft often leaves victims with a bad credit report, costing them months — even years — trying to get their finances back in order. Not to mention that contacting all your personal creditors and bank institutions after your identity has been stolen can also prove difficult emotionally.
When confronted with the identity restoration process, identity theft victims are told not to panic, and that acting fast is the best way to a quick recovery. But can you blame them for panicking? Even with identity theft numbers currently on the decline, studies indicate that U.S. consumers spend some 297 million hours on identity restoration annually, and there have still been over 27 million separate ID theft incidents in the last five years.1 And those are just the ones that were actually recorded — only about one half of all identity theft victims ever even know that their identity has been taken.
What's equally disturbing is that, according to current law (as of November 2007), federal prosecutors can only prosecute those cybercriminals whose identity theft crimes result in at least $5,000 of damage to victims' computers.2 While that's certainly something, many politicians and lawmakers don't think that's punishment enough. And that's why in October 2007, the U.S. Senate proposed a bill that would allow identity theft victims to seek restitution for their crime-related expenses.3 The Identity Theft Enforcement and Restitution Act of 2007 is designed to make the prosecution for identity thieves and cybercriminals easier.
What would the new identity theft law accomplish?
While a law designed to make it easier to criminally prosecute and impose harsher punishments on identity theft criminals would certainly help matters, it isn't entirely clear how big the impact might be. Some experts are, at best, lukewarm on the idea, claiming that the noticeable drop in identity theft cases in recent years makes the law unnecessary. But those in favor of the legislation claim that it would eliminate a current prosecution requirement that says that sensitive information must be stolen from a computer through interstate or foreign communications. Under the new law, an identity theft criminal can be prosecuted if they hack a computer within the same state.2 This seems particularly significant because many identity theft experts say that, in a large percentage of identity theft cases, the victim knows the perpetrator personally — with friends, co-workers and even family members topping the list of would-be offenders.
The proposed new identity theft law would also make it a felony to damage 10 or more computers through spyware or keyloggers.2 Spyware (software that secretly gathers personal information about an online user while navigating the Internet) and keyloggers (a hardware device that can monitor a user's individual computer keystrokes) are among cyber-thieves' most effective identity theft tools. Further, if the new law were ratified, the definition of cybercrime would be expanded to include cyber-extortion cases where the criminal removes malicious software from a user's computer in exchange for payment.2
On a broader scale, lawmakers who support the bill say it's common sense. "Protecting American consumers from identity theft and fraud should be one of the Senate's top priorities," says Senator Patrick Leahy (D–Vermont). "Cybercriminals are getting smarter and more effective in their online efforts to strip Americans of their privacy and their property. We can't stand around and watch them get around our laws and crime-fighting tactics."3
Indeed, experts have warned that cybercriminals will continue to find unique ways to steal personal information — seemingly remaining worry-free over being caught, knowing that the current laws don't carry particularly significant penalties. And while the proposed bill is an improvement over existing identity theft laws, further legislation will be needed to address emerging and as-yet undiscovered methods of ID theft.
What are the typical costs of identity theft recovery (identity restoration)?
One of the reasons that many people feel that new, more stringent identity theft punishments should be put in place is to help ease the financial burden on private citizens. According to the FTC, a 2006 study showed that identity theft victims spent an average of $792 on identity restoration.1
While some trends suggest that identity theft is somewhat more common among specific racial and economic groups, identity theft remains primarily an equal opportunity crime, and tougher identity theft laws may discourage cybercriminals from developing new methods to swipe your personal information. In the meantime, a law that would help identity theft victims receive monetary compensation from the perpetrators for time spent on identity restoration could further discourage identity thieves.