Identity theft, the misuse of someone’s personal identity to commit fraud, is a large and growing economic and legal problem. Identity theft has become the most prevalent form of fraud resulting in billions of dollars in losses.
ID theft is often considered a “white-collar” crime because it is committed during the course of normal employment duties (e.g., a bank employee gathering personal information), or the crime does not usually involve any physical harm. Identity thieves are often portrayed as sophisticated computer specialists, hackers, or organized networks. But, is this the reality?
A recent research report by Heith Copes (U Alabama at Birmingham) and Lynne Vieraitis (U Texas at Austin) has shed some light on this issue. Copes and Vieraitis searched federal court records in the US for people convicted of identity theft and then tried to find out where they were serving their sentences. They were able to find 297 inmates, from which they sampled 59 inmates in 14 prisons across the country. The convicts agreed to do detailed interviews, in private, to talk about themselves and their crimes, and the results are reported in a recent issue of Criminal Justice Review.
It turns out that identity theft is an equal-opportunity crime. The thieves were just about equally often men or women, black or white, from poor backgrounds or from middle/upper class families. The ages ranged from 23 to 60. About 52% of the criminals were employed at the time of their crimes, and only 35% used their employment status to facilitate their crime (most often mortgage fraud). Most of the ID thieves had been arrested for other crimes before, but some said they stopped doing other crimes because they could make more money stealing identities.
The most common method for obtaining identity information was to buy it, often from employees of banks, mortgage companies, and government agencies. Identity information could also be bought off the street from petty criminals often fuelling drug habits. Other methods of obtaining IDs were robbing mailboxes and going through trashcans. Sometimes, victims willingly gave up their IDs in exchange for a portion of the fraud profits.
The most common method of converting identities into cash was to apply for credit cards using the false identity. These cards were then used to buy goods to be kept, returned for cash, or sold on the street. Buying gift cards was very popular because they could be quickly sold. Instant credit offers from big box stores were also a favourite.
Taking out new loans and mortgages was also a common form of cashing. ID thieves sometimes depositing bad cheques into newly opened accounts, using the false ID. After a couple of days, the cash would be withdrawn before the cheques could bounce. ID thieves would even create additional documents to complete a false identity, sometimes forging realistic copies and sometimes paying agency employees to issue the documents.
So, how do we understand identity theft? According to Copes and Vieraitis, “it is best categorized as an economic crime committed by a wide range of people from diverse backgrounds through a variety of legitimate (e.g., mortgage broker) and illegitimate (e.g., burglar) occupations.”
As to the issue of whether these are white-collar criminals: “Despite public perceptions of identity theft being a high-tech, computer driven crime, it is rather mundane and requires few technical skills. Identity thieves do not need to know how to hack into large, secure databases. They can simply dig through garbage or pay insiders for information. No particular group has a monopoly on the skills needed to be a capable identity thief.”
Copes, H., and Vieraitis, L.M. (2009). Understanding identity theft: Offenders’ accounts of their lives and crimes. Criminal Justice Review, 34(3), 329-349