| President Bush on July 15 signed the Identity Theft Penalty Enhancement Act, H.R. 1731, which stiffens penalties for the crime of identity theft and establishes a new federal crime of “aggravated identity theft” when ID theft is involved in such serious offenses as bank fraud or defrauding employee benefit plans.
At a White House bill signing ceremony, Bush noted that identity theft is “ one of the fastest growing financial crimes” in the United States and that in 2003 alone, nearly 10 million Americans had their identities stolen by criminals, costing U.S. businesses almost $50 billion. The annual cost to consumers from identity crimes is estimated to be $5 billion, according to the Federal Trade Commission (FTC). The president said the new law “sends a clear message that a person who violates another’s financial privacy will be punished.”
Under the new law, those convicted of aggravated identity theft must serve an additional mandatory two-year prison term. Enhanced five-year consecutive penalties would be imposed if a terrorist-related offense occurs.
The ID theft penalty law also addresses the problem of insiders, such as workers in financial institutions, who abuse their job position to commit fraud or help others to commit fraud. “The law directs the U.S. Sentencing Commission, which sets federal sentences, to amend its guidelines to increase punishment for those crimes involving an abuse of position. That is, an insider will pay an additional price for violating his position of trust,” according to Deputy Attorney General James B. Comey.
The Justice Department official advised that the new law also applies to phishing scams, which use phoney emails and websites to trick consumers into revealing personal or financial information over the Internet. “If the phishing results in someone taking identity information, this law will allow them to be prosecuted for possessing that information with criminal intent,” Comey said at an online, interactive “Ask the White House” forum on July 15.
For example, if the phisher uses false identity information to commit mail fraud, the individual will serve an additional two years in jail beyond whatever was imposed for the underlying fraud crime, Comey explained.
ID Theft Tips
Asked what to do if one becomes a victim of identity theft or fraud, Comey said, “Check your credit cards and bank accounts for suspicious activity. Then get a copy of your credit report. Call local police and the Federal Trade Commission’s identity theft hotline or go to www.ftc.gov.”
Industry Reaction
The American Bankers Association (ABA) applauded enactment of the ID theft penalty law. “This new law sends a strong message to thieves – that common criminals and terrorists who prey on innocent people by stealing their identity will face certain and swift punishment,” said ABA Executive Vice President Edward L. Yingling in written statement.
Congressional Sponsors
The identity theft bill was co-sponsored in the Senate by Diane Feinstein, D-Calif., and Jon Kyl, R-Ariz., and in the House by John Carter, R-Tex., and Adam Schiff, D-Calif.
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