The President’s Identity Theft Task Force

April 2007

CombatingIDENTITY THEFT

Volume II: Supplemental Information

iii

COMBATING IDENTITY THEFT A Strategic Plan

Table of Contents

Glossary of Acronyms ................................................................iv

Identity Theft Task Force Members...............................................vii

A.	 Federal Laws and Regulations Related

to Data Security..................................................................................1

B.	 Enforcement Actions Relating to Data Security .................................12

C.	 Guidance for Businesses on Safeguarding Data..................................19

D.	 Guidance for Businesses on Data Breaches........................................27

E.	 Federal Consumer Education Efforts.................................................30

F.	 Private Sector Consumer Education Efforts .......................................39

G.	 Recent Laws Relating to Identification Documents ............................44

H.	 State Criminal Law Enforcement Efforts............................................45

I. 	 Sentencing in Federal Identity Theft Prosecutions .............................47

J.	 Investigative Approaches to Identity Theft:

Special Enforcement and Prosecution Initiatives ...............................50

K.	 How Law Enforcement Obtains

and Analyzes Identity Theft Data ......................................................55

L.	 Federal Law Enforcement Outreach Efforts .......................................60

M.	 Investigative Approaches to Identity Theft:

Interagency Working Groups and Task Forces...................................65

N.	 Federal Criminal Statutes Used to Prosecute Identity Theft ................69

O.	 Training For and By Investigators and Prosecutors.............................71

P.	 Current Remediation Tools Available to Victims................................74

ENDNOTES............................................................................................78
iv

Glossary of Acronyms

AAMVA–American Association

of Motor Vehicle Administrators

AARP–American Association

of Retired Persons

ABA–American Bar Association

APWG–Anti-Phishing Working Group

BBB–Better Business Bureau

BIN–Bank Identification Number

BJA–Bureau of Justice Assistance

BJS–Bureau of Justice Statistics

CCIPS–Computer Crime and

Intellectual Property Section (DOJ)

CCMSI–Credit Card Mail Security

Initiative

CFAA–Computer Fraud and Abuse Act

CFTC–Commodity Futures Trading

Commission

CIO–Chief Information Officer

CIP–Customer Identification Program

CIRFU–Cyber Initiative and Resource

Fusion Center

CMRA–Commercial Mail Receiving

Agency

CMS–Centers for Medicare and

Medicaid Services (HHS)

CRA–Consumer reporting agency

CVV2–Card Verification Value 2

DBFTF–Document and Benefit Fraud

Task Force

DHS–Department of Homeland Security

DOJ–Department of Justice

DPPA–Drivers Privacy Protection

Act of 1994

FACT Act–Fair and Accurate Credit

Transactions Act of 2003

FBI–Federal Bureau of Investigation

FCD–Financial Crimes Database

FCRA–Fair Credit Reporting Act

FCU Act–Federal Credit Union Act

FDI Act–Federal Deposit Insurance Act

FDIC–Federal Deposit Insurance

Corporation

FEMA–Federal Emergency

Management Agency

FERPA–Family and Educational Rights

and Privacy Act of 1974

FFIEC–Federal Financial Institutions

Examination Council

FIMSI–Financial Industry Mail Security

Initiative

FinCEN–Financial Crimes Enforcement

Network (Department of Treasury)

FISMA–Federal Information Security

Management Act of 2002

FRB–Federal Reserve Board

of Governors

FSI–Financial Services, Inc.

FTC–Federal Trade Commission

FTC Act–Federal Trade Commission

Act

GAO–Government Accountability

Office

GLB Act–Gramm-Leach-Bliley Act

HHS–Department of Health and Human

Services

HIPAA–Health Insurance Portability

and Accountability Act of 1996

IACP–International Association

of Chiefs of Police

IAFCI–International Association

of Financial Crimes Investigators

IC3—Internet Crime Complaint Center

ICE–U.S. Immigration and Customs

Enforcement

IRS–Internal Revenue Service

IRS CI–IRS Criminal Investigation

Division

IRTPA–Intelligence Reform and

Terrorism Prevention Act of 2004

GLOSSARY OF ACRONYMS
COMBATING IDENTITY THEFT A Strategic Plan

ISI–Intelligence Sharing Initiative

(U.S. Postal Inspection Service)

ISP–Internet service provider

ISS LOB–Information Systems Security

Line of Business

ITAC–Identity Theft Assistance Center

ITCI–Information Technology

Compliance Institute

ITRC–Identity Theft Resource Center

MCC–Major Cities Chiefs

NAC–National Advocacy Center

NASD–National Association of

Securities Dealers, Inc.

NCFTA–National Cyber Forensic

Training Alliance

NCHELP–National Council of Higher

Education Loan Programs

NCUA–National Credit Union

Administration

NCVS–National Crime Victimization

Survey

NDAA–National District Attorneys

Association

NIH–National Institutes of Health

NIST–National Institute of Standards

and Technology

NYSE–New York Stock Exchange

OCC–Office of the Comptroller

of the Currency

OIG–Office of the Inspector General

OJP–Office of Justice Programs (DOJ)

OMB–Office of Management and

Budget

OPM–Office of Personnel Management

OTS–Office of Thrift Supervision

OVC–Office for Victims of Crime (DOJ)

PCI–Payment Card Industry

PIN–Personal Identification Number

PMA–President’s Management Agenda

PRC–Privacy Rights Clearinghouse

QRP–Questionable Refund Program

(IRS CI)

RELEAF–Operation Retailers & Law

Enforcement Against Fraud

RISS–Regional Information Sharing

Systems

RITNET–Regional Identity Theft

Network

RPP–Return Preparer Program (IRS CI)

SAR–Suspicious Activity Report

SBA–Small Business Administration

SEC–Securities and Exchange

Commission

SMP–Senior Medicare Patrol

SSA–Social Security Administration

SSL–Security Socket Layer

SSN–Social Security number

TIGTA–Treasury Inspector General

for Tax Administration

UNCC–United Nations Crime

Commission

USA PATRIOT Act–Uniting and

Strengthening America by Providing

Appropriate Tools Required to Intercept

and Obstruct Terrorism Act of 2001

(Pub. L. No. 107-56)

USB–Universal Serial Bus

US-CERT–United States Computer

Emergency Readiness Team

USPIS–United States Postal Inspection

Service

USSS–United States Secret Service

VHA–Veterans Health Administration

VOIP–Voice Over Internet Protocol

VPN–Virtual private network

WEDI–Workgroup for Electronic Data

Interchange
vi

Identity Theft Task Force Members

Alberto R. Gonzales, Chairman

Attorney General

Deborah Platt Majoras, Co-Chairman

Chairman, Federal Trade Commission

Henry M. Paulson

Department of Treasury

Carlos M. Gutierrez

Department of Commerce

Michael O. Leavitt

Department of Health and Human Services

R. James Nicholson

Department of Veterans Affairs

Michael Chertoff

Department of Homeland Security

Rob Portman

Office of Management and Budget

John E. Potter

United States Postal Service

Ben S. Bernanke

Federal Reserve System

Linda M. Springer

Office of Personnel Management

Sheila C. Bair

Federal Deposit Insurance Corporation

Christopher Cox

Securities and Exchange Commission

JoAnn Johnson

National Credit Union Administration

Michael J. Astrue

Social Security Administration

John C. Dugan

Office of the Comptroller of the Currency

John M. Reich

Office of Thrift Supervision


COMBATING IDENTITY THEFT A Strategic Plan

PART A

FEDERAL LAWS AND REGULATIONS RELATED TO DATA SECURITY

Although there is no single comprehensive federal data security law, a number

of federal laws, regulations, and guidelines relate to and protect consumer

information. Each of these laws and regulations provides specific remedies

that can be sought by the agencies with enforcement authority. Significant

examples include:

Title V of the Gramm-Leach-Bliley Act

(GLB Act), 15 U.S.C. §§ 6801-09

The GLB Act addresses privacy and security obligations of “financial

institutions.” Financial institutions are defined broadly as those entities

engaged in “financial activities” such as banking, lending, insurance, loan

brokering, and credit reporting. 12 C.F.R. §§ 225.28, 225.86. The GLB Act

addresses two distinct types of protection for personal information: protection

of security and protection of privacy. Various federal agencies, including the

federal bank regulatory agencies, the Federal Trade Commission (FTC), and

the Securities and Exchange Commission (SEC), have issued regulations or

guidelines addressing both the security and privacy provisions of the GLB Act.

The security provisions require the agencies to write standards for financial

institutions regarding appropriate physical, technical, and procedural safeguards

to ensure the security and confidentiality of customer records and information,

and to protect against anticipated threats and unauthorized access to such

information. The privacy provisions require financial institutions to give notice

to their customers of their information-sharing practices and provide customers

with an opportunity to opt out of information-sharing with certain unaffiliated

third parties in certain circumstances.

Remedies: The specific remedies available to each agency are listed below.

Interagency Guidelines Establishing Information Security 

Standards (“Interagency Security Guidelines”)

The Interagency Security Guidelines, jointly issued by the federal bank

regulatory agencies in 2001, require each financial institution under their

jurisdiction to have a written information security program designed to meet

the statutory objectives of Title V of the GLB Act and Section 216 of the Fair

and Accurate Credit Transactions Act of 2003 (FACT Act) regarding disposal

of consumer information derived from consumer reports.1 See 12 C.F.R. Part

30, App. B (national banks); 12 C.F.R. Part 208, App. D-2 and Part 225, App.

F (state member banks and holding companies); 12 C.F.R. Part 364, App. B

(state non-member banks); 12 C.F.R. Part 570, App. B (savings associations);

12 C.F.R. Part 748, App. A (credit unions). Under the guidelines, the

institution’s board of directors must approve the program and oversee its


development, implementation, and maintenance. The institution also must

assess the risks to its customer information, identify reasonably foreseeable

internal and external threats that could result in unauthorized disclosure or

misuse of its customer information, and assess the likelihood and potential

damage of these threats, taking into account the institution’s size and

complexity, the nature and scope of its activities, and the sensitivity of the

customer information it handles. Each of the requirements in the guidelines

regarding proper disposal of customer information also applies to the disposal

of consumer information.

The institution must then design its information security program to control

the identified risks. The guidelines stipulate certain minimum specific

security measures that should be considered and adopted if appropriate

to the institution’s risk profile. These measures include access controls

on customer information systems, encryption of electronic customer

information, monitoring systems to detect actual and attempted attacks

on customer information systems, and response programs that specify actions

to be taken when an institution suspects or detects unauthorized access to

customer information.

Each institution must also train staff to implement the program and oversee

its arrangements with service providers that have access to its customer

information. This includes using due diligence in selecting service providers,

requiring by contract that service providers implement appropriate safeguard

measures that satisfy the guidelines, and monitoring the activities of service

providers, where necessary, to control the risks the institution has identified

that may be posed by the service provider’s access to the institution’s

customer information.

An institution’s information security program must be dynamic. Institutions

must routinely test their systems and address any weaknesses they discover.

Institutions must adjust their programs to address new threats to customer

information, changes in technology, and new business arrangements.

Remedies: The federal bank regulatory agencies have comprehensive

supervision and examination authority over banks, savings associations,

and credit unions, and are well positioned to detect violations of law, ensure

compliance, and apply sanctions appropriate to the nature and severity of

any violation of law or regulation. The bank regulatory agencies have a

well-established arsenal of enforcement tools under sections 8 and 39 of

the Federal Deposit Insurance Act (FDI Act) and sections 206 and 216

of the Federal Credit Union Act (FCU Act), ranging from informal to formal

actions. Depending on the level of severity of a violation, an agency may

choose to cite an institution for a violation, but forego formal action where

management quickly remedies the situation. In other circumstances, formal,

public actions are warranted and the regulators may seek civil penalties,

restitution, and cease and desist orders.

PART A


COMBATING IDENTITY THEFT A Strategic Plan

Interagency Guidance on Authentication in an Internet Banking 

Environment (“Interagency Authentication Guidance”)

The Interagency Authentication Guidance, jointly issued by the federal bank

regulatory agencies in 2005, states that financial institutions regulated by the

agencies should conduct risk-based assessments, evaluate customer awareness

programs, and develop security measures to reliably authenticate customers

remotely accessing their Internet-based financial services. In the guidance,

the federal bank regulatory agencies state that financial institutions should

use effective risk-based methods to authenticate the identity of customers

using their products and services. Single-factor authentication, as the only

control mechanism, is considered inadequate for high-risk transactions

involving access to customer information or the movement of funds to other

parties. Financial institutions are encouraged to implement multifactor

authentication, layered security, or other controls reasonably calculated

to mitigate those risks.

Remedies: The guidance describes practices that the federal bank regulatory

agencies consider to be safe and sound. The agencies may take enforcement

action under section 8 of the FDI Act and section 206 of the FCU Act against

an institution that engages in unsafe and unsound conduct.

FTC Standards for Safeguarding Customer Information 

(“Safeguards Rule”), 16 C.F.R. Part 314

The FTC’s Safeguards Rule applies to a wide variety of “financial

institutions” that are not subject to the jurisdiction of other federal or state

authorities under the GLB Act. Among the institutions that fall under the

Safeguards Rule are non-bank mortgage lenders, loan brokers, some stateregulated financial or investment advisers, tax preparers, providers of real

estate settlement services, and debt collectors. The FTC’s regulation applies

only to companies that are “significantly engaged” in such financial activities.

Like the Interagency Security Guidelines, the Safeguards Rule requires

financial institutions to develop a written information security plan that

describes their procedures to protect customer information. Further,

the Rule requires covered entities to take certain procedural steps, including:

(1) assigning employees to oversee the program; (2) conducting a risk

assessment; (3) designing and implementing an information safeguards

program; (4) contractually requiring service providers to protect customers’

information; and (5) evaluating and adjusting the program in light of relevant

circumstances. However, given the wide variety of entities (large and small)

that are covered, the Rule mandates a data security plan that accounts for

each entity’s particular circumstances, including its size and complexity, the

nature and scope of its activities, and the sensitivity of the customer

information it handles.


Remedies: The FTC can seek injunctive relief and other equitable remedies,

including consumer redress or disgorgement in appropriate cases.

SEC Regulation S-P, 17 C.F.R. Part 248

In June 2000, the SEC adopted Regulation S-P, which implements the GLB

Act’s Title V information privacy and safeguarding requirements for securities

brokers and dealers, investment companies, and SEC-registered investment

advisers. See 65 Fed. Reg. 40334 (June 29, 2000). Regulation S-P contains

rules of general applicability that are substantively similar to the financial

privacy rules adopted by the FTC and the federal bank regulatory agencies.

In addition to providing general guidance, Regulation S-P contains numerous

examples specific to the securities industry to provide more meaningful

guidance to help firms implement its requirements. It also includes a section

regarding procedures to safeguard information, including the disposal of

consumer report information. See 17 CFR 248.30. This section requires

securities firms to adopt written policies and procedures that address

administrative, technical, and physical safeguards that are reasonably

designed to: (1) ensure the security and confidentiality of customer records

and information; (2) protect against any anticipated threats or hazards to the

security and integrity of such records; and (3) protect against unauthorized

access to or use of such records or information that could result in substantial

harm or inconvenience to any customer.

In a public statement released in September 2004, the SEC stated that in large

and complex organizations, with thousands of employees and multiple offices,

written policies and procedures to safeguard customers’ records and

information generally address procedures at several levels, going from an

organization-wide policy statement down to detailed procedures addressing

particular controls. See Disposal of Consumer Report Information, Release

Nos. 34-50361, IA-2293, IC-26596 (Sept. 14, 2004). More specifically, the SEC

stated that at one level, the highest levels of management approve an

organization-wide policy statement. At another level, more specific policies

and procedures address separate areas of safeguarding risk. At a final level,

detailed procedures set out the controls, management checks and balances,

audit trail functions, and other actions needed to ensure that the firm’s

safeguarding program is reasonably effective and verifiable by senior

management. These written policies and procedures also generally designate

a specialized staff of information security professionals to manage the

organization’s day-to-day safeguarding operations, and an information security

governance framework, to ensure that the information security policy is

adequately supported throughout the enterprise. Finally, these written policies

and procedures generally make provision for measures to verify the

safeguarding program’s effectiveness, including risk assessments, independent

audits and penetration tests, as well as active monitoring, surveillance, and

detection programs. The SEC stated that this comprehensive approach to

safeguarding is consistent with widely accepted standards adopted by

PART A


COMBATING IDENTITY THEFT A Strategic Plan

government and private sector standard-setting bodies and professional

literature and generally leads to reasonable written policies and procedures.

Remedies: A violation of Regulation S-P can result in supervisory action,

such as a deficiency letter. In addition, the Commission has authority to

initiate enforcement proceedings for violations of Regulation S-P under the

Securities Exchange Act of 1934, the Investment Company Act of 1940,

and the Investment Advisers Act of 1940. Violations of regulations under

these acts can result in injunctive relief, civil penalties, or in some cases,

imprisonment. Failure to honor a commitment to a customer also may

constitute a violation of a rule of a self-regulatory organization, such

as National Association of Securities Dealers (NASD) Rule 2110, which

requires adherence to “high standards of commercial honor and just and

equitable principles of trade.”	

Interagency Guidance on Response Programs for Unauthorized 

Access to Customer Information and Customer Notice (“Incident 

Response Guidance”)

In 2005, the federal bank regulatory agencies also issued guidance for banks,

savings associations, and credit unions, relating to breach notification. See 12

C.F.R. Part 30, Supp. A to App. B (national banks); 12 C.F.R. Part 208, Supp.

A to App. D-2 and Part 225, Supp. A to App. F (state member banks and

holding companies); 12 C.F.R. Part 364, Supp. A to App. B (state nonmember banks); 12 C.F.R. Part 570, Supp. A to App. B (savings associations);

12 C.F.R. 748, App. B (credit unions). The guidance states that each of these

financial institutions should develop and implement a response program to

address incidents of unauthorized access to or use of customer information

maintained by or on behalf of the institution as part of the information

security program required by the Interagency Security Guidelines. The

program must contain procedures for: (1) assessing the nature and scope

of an incident, and identifying what customer information systems and types

of customer information have been accessed or misused; (2) notifying its

primary federal regulator as soon as possible when the institution becomes

aware of an incident involving unauthorized access to or use of sensitive

customer information; (3) notifying appropriate law enforcement authorities,

in addition to filing a timely Suspicious Activities Report, in situations

involving federal criminal violations requiring immediate attention, such as

when a reportable violation is ongoing; (4) taking appropriate steps to contain

and control the incident to prevent further unauthorized access to or use

of customer information, for example, by monitoring, freezing, or closing

affected accounts, while preserving records and other evidence; and

(5) notifying customers when warranted.

The Incident Response Guidance also describes when and how a financial

institution should provide notice to customers affected by unauthorized access

or misuse of sensitive customer information. In particular, it indicates that


once the institution becomes aware of an incident of unauthorized access

to “sensitive customer information” as defined in the guidance, it should

conduct a reasonable investigation to determine promptly the likelihood that

the information has been or will be misused. If the institution determines

that misuse of customer information has occurred or is reasonably possible,

it should notify any affected customer as soon as possible.

Such notice should be given in a clear and conspicuous manner, and it should

include a description of the incident, the type of customer information

affected, the steps taken to protect the customers’ information from further

unauthorized access, a telephone number that customers can call for further

information and assistance, and other information as appropriate to the

situation. The guidance also makes clear that an institution remains

responsible for protecting customer information in the hands of a service

provider and that it, by contract, should require the service provider to take

appropriate actions to address incidents of unauthorized access to the

institution’s customer information, including notifying the institution

of security breaches involving the institution’s customer information.

Remedies: The guidance represents the federal bank regulatory agencies’

interpretation of the standards set out in the Interagency Security Guidelines

described above. Remedies for breaches are discussed in that section. In

addition, the guidance describes practices that the federal bank regulatory

agencies consider to be safe and sound. The agencies may take enforcement

action under section 8 of the FDI Act and section 206 of the FCU Act against

an institution that engages in unsafe and unsound conduct.

Privacy of Consumer Financial Information (“Privacy Rule”) 

The Privacy Rule, issued by the federal bank regulatory agencies and the FTC,

implements the privacy provisions of the GLB Act with respect to financial

institutions under their respective jurisdictions. 16 C.F.R. Part 313 (FTC);

12 C.F.R. Parts 40 (OCC), 216 (FRB), 332 (FDIC), 573 (OTS), and 716

(NCUA). Subject to certain exceptions, it prohibits financial institutions

from disclosing nonpublic personal information to non-affiliated third parties

without first providing consumers with notice and the opportunity to opt out

of the disclosure. The notice and opt out must be provided no later than when

a customer relationship arises and annually for the duration of that

relationship, or at a reasonable time before the disclosure in the case of noncustomers. The notice must be “a clear and conspicuous notice that accurately

reflects [the financial institution’s] privacy policies and practices” including

policies and practices related to security.

Remedies: Pursuant to the FTC Act, the FTC can seek injunctive relief, as

well as consumer redress or disgorgement in appropriate cases. The GLB Act

provides that the regulations may be enforced by the federal bank regulatory

agencies under section 8 of the FDI Act and section 206 of the FCU Act,

which are discussed in detail above under “Interagency Security Guidelines.”

PART A


COMBATING IDENTITY THEFT A Strategic Plan

Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681-1681x, 

as amended by the Fair and Accurate Credit Transactions Act of 2003 

(“FACT Act”), Pub. L. No. 108-159, 117 Stat. 1952

The FCRA contains requirements designed to protect the privacy of consumer

report information, which includes account, credit history, and employment

information. Under the FCRA, consumer reporting agencies are prohibited

from distributing consumer reports except for specified “permissible purposes.”

These entities must maintain reasonable procedures to ensure that they

provide consumer reports only for such purposes, such as by verifying the

identities of persons obtaining consumer reports and their intended use of

the information. The FACT Act amendments to the FCRA added a number

of new requirements, many of which have been or are being implemented

through rulemaking. Several of these new requirements are intended to

prevent identity theft or assist victims in the recovery process. The rules

most relevant to data security are discussed below.2

Remedies: The FCRA allows for both monetary relief, including civil

penalties, and injunctive relief for violations of the Act, 15 U.S.C. § 1681s,

and provides for criminal sanctions against those who infringe on consumer

privacy by unlawfully obtaining consumer reports. The FCRA and its

implementing regulations may be enforced by the federal bank regulatory

agencies under section 8 of the FDI Act and section 206 of the FCU Act,

which are discussed in detail above under “Interagency Security Guidelines.”

Disposal of Consumer Report Information and Record Rule 

(“Disposal Rule”)

The FACT Act amended the FCRA to include a number of provisions

designed to increase the protection of sensitive consumer information.

One such provision required the financial regulatory agencies and the FTC

to promulgate a coordinated rule designed to prevent unauthorized access

to consumer report information by requiring all users of such information to

have reasonable procedures to dispose of it properly. This Disposal Rule took

effect on June 1, 2005.

The Rule applies to any entity that maintains consumer reports or information

derived from consumer reports. The Rule does not address when entities must

dispose of such information, but rather how they must dispose of it: by using

disposal practices that are reasonable and appropriate to prevent the

unauthorized access to or use of information in a consumer report. The

standard is flexible and allows the organizations and individuals covered by

the Rule to determine what measures are reasonable based on the sensitivity

of the information, the costs and benefits of different disposal methods, and

changes in technology. For the federal bank regulatory agencies, these

requirements are included in their Interagency Security Guidelines. The

SEC’s disposal rule requirements are included in the SEC’s Regulation S-P

(17 C.F.R. § 248.30(b)).


Remedies: All remedies available under the FCRA (see above) and

remedies available for violation of the SEC’s Regulation S-P (see above).

Identity Theft Red Flags and Address Discrepancies Rule under 

the FACT Act (“Red Flags Rule”), Pub. L. No. 108-159, 117 Stat. 

1952, Sections 114 and 315. (Proposed)

On July 18, 2006, the financial regulatory agencies and the FTC issued

a notice of proposed rulemaking for the Red Flags Rule, a new regulation

designed to reduce identity theft. The regulations would require every

financial institution and creditor to develop and implement a written identity

theft prevention program that includes policies and procedures for detecting,

preventing, and mitigating identity theft in connection with account openings

and existing accounts. The program must be risk-based and tailored to the size

and complexity of each financial institution or creditor and the nature and

scope of its activities. Credit card and debit card issuers must develop policies

and procedures to assess the validity of a request for a change of address that

is followed closely by a request for an additional or replacement card.

In addition, as required by statute, the proposed regulations require users

of consumer reports to develop reasonable policies and procedures regarding

notices of address discrepancies they receive from a consumer reporting

agency (CRA). If a user of a consumer report receives notice from a CRA

that the address a consumer has provided to obtain the report “substantially

differs” from the consumer’s address in the CRA’s file, the user must reasonably

confirm as accurate an address for the consumer and provide it to the CRA.

Remedies: All remedies available under the FCRA. (See above.)

Federal Trade Commission Act (FTC Act), 15 U.S.C. § 45(a)

The FTC Act prohibits “unfair or deceptive acts or practices in or affecting

commerce” and gives the FTC broad jurisdiction over a wide variety

of entities and individuals operating in commerce. Prohibited deceptive

practices include making false or misleading claims about the privacy and

security provided for consumer information. The FTC Act also prohibits

unfair practices, including unfair practices affecting consumer data. Practices

are unfair if they cause or are likely to cause consumers substantial injury that

is neither reasonably avoidable by consumers nor offset by countervailing

benefits to consumers or competition. The FTC has used this authority

to challenge a variety of injurious practices, including companies’ failure

to provide reasonable and appropriate security for sensitive consumer data

such as Social Security numbers (SSNs) and financial account information.

(See discussion of enforcement actions below.) The federal bank regulatory

agencies have also enforced Section 5 of the FTC Act against financial

institutions under their jurisdiction.

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COMBATING IDENTITY THEFT A Strategic Plan

Remedies: Injunctive relief, affirmative conduct requirements, and

consumer redress or disgorgement of ill-gotten gains in appropriate cases.

The FTC Act may be enforced by the federal bank regulatory agencies under

section 8 of the FDI Act and section 206 of the FCU Act, which are

discussed in detail above under “Interagency Security Guidelines.”

Customer Identification Program Rules Implementing 

Section 326 of the Uniting and Strengthening America by Providing 

Appropriate Tools Required to Intercept and Obstruct Terrorism Act 

of 2001 (USA PATRIOT Act) , 31 U.S.C. § 5318(l)

Banks, savings associations, credit unions, broker-dealers, mutual funds, and

futures commission merchants are required to follow verification procedures

under rules issued by the federal bank regulatory agencies, the Department of

Treasury, the CFTC, and the SEC under section 326 of the USA PATRIOT

Act. The implementing rules require every covered entity to design and

implement a customer identification program (CIP) that includes policies

and procedures for verifying the identity of a person opening a new account.

While the primary purpose of the regulations implementing the USA

PATRIOT Act was to deter terrorist financing and money laundering,

the CIP regulations also play a role in preventing identity theft.

Remedies: The Department of the Treasury’s Financial Crimes

Enforcement Network (FinCEN) has authority to assess penalties against

financial institutions that violate this regulation. The regulation also is

enforced by the federal bank regulatory agencies under section 8 of the FDI

Act and section 206 of the FCU Act, which are discussed in detail above

under “Interagency Security Guidelines.” The SEC examines mutual funds,

and the SEC and relevant self-regulatory organizations examine brokerdealers, for compliance with the regulation and may also bring enforcement

actions depending on the circumstances. The CFTC has similar authority

for futures commission merchants.

The Health Insurance Portability and Accountability

Act of 1996 (HIPAA), 42 U.S.C. § 1320d et seq. 

HIPAA and the implementing Privacy Rule prohibit covered entities

(including health plans, healthcare clearinghouses, and certain healthcare

providers) from disclosing to third parties an individual’s protected health

information without prior authorization, subject to some exceptions, such

as the disclosure of patient records by covered entities for purposes of routine

treatment, insurance, payment or, in limited circumstances, credit reporting

relating to account information. 45 C.F.R. Part 160 and Subparts A and E of

Part 164 (“HIPAA Privacy Rule”). Like the GLB Act Safeguards Rule, the
10

HIPAA Privacy Rule requires covered entities under its jurisdiction to have

in place “appropriate administrative, technical, and physical safeguards to

protect the privacy of protected health information.” 45 C.F.R. § 164.530(c).

The HIPAA Security Rule similarly seeks to protect the confidentiality,

integrity, and availability of electronic protected health information by

specifying a series of administrative, technical, and physical security

procedures for covered entities to use to assure the security and confidentiality

of electronic protected health information. 45 C.F.R. Part 160 and Subparts

A and C of Part 164 (“HIPAA Security Rule”).

Remedies: HIPAA allows for civil monetary penalties and criminal

sanctions for violations under some circumstances.

The Drivers Privacy Protection Act of 1994

(DPPA), 18 U.S.C. §§ 2721-2725

The DPPA prohibits the disclosure of a driver’s personal information (i.e.,

individual photograph, SSN, and driver identification number) obtained in

connection with a motor vehicle record. The DPPA contains exceptions that

allow for certain disclosures of such information, such as for use by an insurer

or to provide notice to the owners of towed or impounded vehicles. The DPPA

also prohibits an individual from knowingly obtaining a driver’s personal

information for a use not permitted under the Act, and from making a false

representation to obtain any such information.

Remedies: For violations of the Act, the DPPA provides for criminal fines

against individuals and/or State Departments of Motor Vehicles, civil penalties

for violations by State Departments of Motor Vehicles, and a private right of

action for individuals.

The Family Educational Rights and Privacy Act

(FERPA), 20 U.S.C. § 1232g; 34 C.F.R. Part 99

FERPA protects the privacy of student education records. The law applies

to all schools that receive funds under an applicable program of the U.S.

Department of Education. FERPA gives parents certain rights with respect

to their children’s education records; these rights transfer to the student when

he or she reaches the age of 18 or attends a school beyond the high school

level. Under FERPA, a parent or an eligible student has the right to inspect

and review the student’s education records maintained by the school and to

request that a school correct records that the parent or eligible student believes

to be inaccurate or misleading. Furthermore, schools generally must have

written permission from the parent or eligible student to release any

information from a student’s education record, subject to certain exceptions,

such as disclosures to appropriate parties in connection with financial aid

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COMBATING IDENTITY THEFT A Strategic Plan

to a student. Schools may disclose “directory” release information–including

a student’s name, address, telephone number, and date and place of birth–but

must provide advance notice to parents and eligible students and allow them a

reasonable amount of time to opt out of the disclosure.

Remedies: Institutions in violation of FERPA can be denied federal

educational funding.

Department of Veterans Affairs Information Security

Act of 2006, 38 U.S.C. §§ 5721-28

The Department of Veterans Affairs Information Security Enhancement Act

of 2006 establishes a comprehensive information security program for the

Department of Veterans Affairs (VA) and outlines requirements for the VA’s

response to data breaches. The Act provides that if it appears that VA sensitive

information may have been compromised, and an independent data breach

analysis determines that a reasonable risk of potential misuse exists, then the

VA must offer credit protection services to the record subjects. The following

credit protection services must be prescribed in VA regulations: notification

of the record subjects, data mining, fraud alerts, data breach analyses, credit

monitoring, identity theft insurance, and credit protection services. In addition,

the VA must comply with Congressional notification requirements regarding

data breaches. The Act requires all VA contracts in which the contractor will

have access to VA sensitive information to contain provisions prohibiting the

contractor from sharing the information with other entities except to perform

the contract, requiring the contractor to report any data breaches to the agency,

and requiring the contractor to pay liquidated damages to the VA for any data

breach involving sensitive VA information.
12

PART B

ENFORCEMENT ACTIONS RELATING TO DATA SECURITY

Many federal agencies have taken aggressive enforcement actions in response

to data security failures. Some of those actions are listed below.

Federal Bank Regulatory Agencies

The federal bank regulatory agencies have taken numerous enforcement

actions against institutions for failure to have adequate programs to safeguard

customer information. The FDIC took 17 formal enforcement actions

between the beginning of 2002 and the end of 2006; the FRB has taken

14 formal enforcement actions in the past five years; the OCC has taken

18 formal actions since 2002; and the OTS has taken 8 formal enforcement

actions in the past five years.

The following are just a few examples of the formal and informal actions

taken by those agencies in recent years:

A federal bank regulatory agency assessed civil money penalties against

a subsidiary of a bank for improperly disposing of customer records.

A federal bank regulatory agency issued a cease and desist order against

a California-based financial institution, requiring, among other things,

that the institution notify customers of security breaches, after the

federal regulator’s investigation revealed that the institution’s service

provider improperly disposed of hundreds of customer loan files.

The regulator also issued a cease and desist order against the financial

institution’s service provider, and assessed hundreds of thousands

of dollars in civil penalties against the financial institution and its

service provider.

A federal bank regulatory agency, after investigating allegations of a data

compromise by a financial institution employee, directed a retail credit

card bank to notify customers whose accounts or information may have

been compromised. The regulator was able to determine that the

information was used for nefarious purposes, after working collaboratively

with the FTC to review complaints of identity theft made to the FTC

through its Identity Theft Data Clearinghouse, with which the regulator

is an information-sharing member. The financial regulator imposed on

the employee a lifetime prohibition order from the banking industry and

ordered him to pay a $25,000 civil penalty.

A federal bank regulatory agency directed a large financial institution

to improve its employee screening policies, procedures, systems, and

controls after the regulator determined that the financial institution’s

employee screening practices had inadvertently permitted a convicted

felon, who engaged in identity theft-related crimes, to gain employment
13

COMBATING IDENTITY THEFT A Strategic Plan

at the financial institution. Deficiencies in the institution’s screening

practices came to light through the regulator’s review of the former

employee’s activities.

In 2004, a federal bank regulatory agency’s examination of a statechartered bank disclosed significant computer system deficiencies

and inadequate controls to prevent unauthorized access to customer

information. The financial institution regulator issued an order directing

the bank to develop and implement an information security program

meeting the requirements of the Guidelines Establishing Information

Security Standards. More specifically, the order required the bank to

perform a formal risk assessment of internal and external threats that

could result in unauthorized access to customer information, review

computer user access levels to ensure that access was restricted to only

those individuals with a legitimate business need to access the customer

information, and review all other security controls to manage and

control the risks to customer information.

The federal bank regulatory agencies also have taken dozens of enforcement

actions against financial institution insiders who breached their duty of trust

to customers, were engaged in identity theft-related activities, or were otherwise

involved in serious breaches, compromises, or the misuse of customer

information. These enforcement actions have included, for example, prohibiting

individuals from working in the financial services industry, personal cease and

desist orders restricting the use of customer information, the assessment of

significant civil money penalties, and orders requiring restitution.

Securities and Exchange Commission (SEC)

Pursuant to the Regulation S-P standards, the SEC’s staff has actively

examined securities firms to determine whether they have policies and

procedures reasonably designed to protect their customers from identity

theft. Specifically, the SEC, along with the NASD and the New York Stock

Exchange (NYSE), examines registered firms for Regulation S-P compliance

by examining their operations and reviewing customer complaints, and the

SEC is the primary regulator of investment companies and investment

advisers registered with the SEC. The SEC also evaluates the quality of

NASD and NYSE oversight in enforcing their members’ compliance with

federal securities laws, including compliance with Regulation S-P. The most

common Regulation S-P deficiencies have been failure to provide privacy

notices, lack of or inadequate privacy policies, and lack of or inadequate

policies and procedures for safeguarding customer information. The SEC has

not yet found any deficiencies during its examinations that warranted formal

enforcement actions; instead, the SEC thus far has dealt with Regulation S-P

compliance as a supervisory matter and has required registrants to resolve

deficiencies without taking formal action.
14

The SEC has conducted two separate examination sweep programs reviewing

securities firms’ policies and procedures to protect their customers from identity

theft. The first was conducted in 2002 and 2003, and the second is ongoing.

In the first program, the SEC focused on large firms where a significant security

breach could implicate large numbers of customers. The program included

broker-dealers with more than half of all brokerage accounts and fund

complexes with approximately a third of all mutual fund assets. In the second

program, the SEC selected firms for review based on a number of factors

including the extent to which their business model is dependent on the Internet,

recent complaints, and certain affiliations. In both sweep programs, the overall

goal has been to assess the reasonableness of securities firms’ policies and

procedures to protect their customers from identity theft. These sweep programs

supplement the SEC’s regular examination program, which includes examining

securities firms’ compliance with the SEC’s requirements for safeguarding

customer records and information.

At the SEC, consideration is being given to the possibility of adding provisions

to the SEC’s financial privacy rules to provide more detailed guidance.

Federal Trade Commission

The FTC has brought 14 cases against firms that allegedly failed to maintain

reasonable procedures to protect the sensitive consumer data they collected.

In the Matter of Guidance Software, Inc.,

FTC File No. 062-3057 (November 16, 2006) (consent order)

http://www.ftc.gov/opa/2006/11/guidance.htm

The FTC charged that Guidance, a seller of software for use in responding

to computer breaches and other security incidents, failed to take reasonable

security measures to protect sensitive customer data despite promises made

on its website. The complaint alleged that Guidance’s failure to protect the

sensitive data as promised constituted a deceptive practice under Section 5

of the FTC Act. The matter was settled through a consent agreement in which

Guidance agreed to implement a comprehensive information-security program

and obtain audits by an independent third-party security professional every

other year for 10 years.

In the Matter of Card Systems Solutions, Inc. and Solidus Networks, Inc.,

d/b/a Pay by Touch Solutions,

FTC File No. 052-3148 (Sept. 8, 2006) (consent order)

http://www.ftc.gov/privacy/privacyinitiatives/promises_enf.html

The FTC charged that CardSystems, a processor of transactions for major

credit cards, failed to provide reasonable security for sensitive consumer

information, resulting in the breach of credit card information for tens of

millions of card holders. The complaint alleged that this failure caused or was

likely to cause substantial consumer injury and constituted an unfair practice

under Section 5 of the FTC Act. The matter was resolved through a

PART B
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COMBATING IDENTITY THEFT A Strategic Plan

settlement whereby CardSystems and its successor company agreed to

implement a comprehensive information security program that must be

certified by a qualified, independent, third-party professional every other

year for 20 years.

In the Matter of Nations Title Agency, Inc., Nations Holding Company, 

and Christopher M. Likens, FTC Docket No. C-4161 (June 19, 2006)

(consent order) http://www.ftc.gov/os/caselist/0523117/0523117.htm

In the Matter of Superior Mortgage Corp.,

FTC Docket No. C-4153 (Dec. 14, 2005) (consent order)

http://www.ftc.gov/os/caselist/0523136/0523136.htm

In the Matter of Nationwide Mortgage Group, Inc., and John D. Eubank,

FTC Docket No. 9319 (April 12, 2005) (consent order)

http://www.ftc.gov/os/adjpro/d9319/index.htm

In the Matter of Sunbelt Lending Services,

FTC Docket No. C-4129 (Jan. 3, 2005) (consent order)

http://www.ftc.gov/os/caselist/0423153/04231513.htm

In these cases, the FTC charged four companies in the real estate business

with violating the GLB Safeguards Rule by failing to provide reasonable

security to protect consumers’ confidential financial information, including

SSNs, bank and credit card account numbers, and credit histories. In the

Nationwide and Sunbelt cases, the FTC charged that the companies violated the

GLB Privacy Rule by failing to provide required privacy notices to consumers,

and in the Nationwide and Superior cases, that the companies allegedly

misrepresented their security procedures. In settling these cases, the

companies agreed to comply with the various laws and regulations they

allegedly violated and to implement a comprehensive security program

and obtain periodic audits from an independent professional.

In the Matter of DSW, Inc.,

FTC Docket No. C-4157 (March 14, 2006) (consent order)

http://www.ftc.gov/privacy/privacyinitiatives/promises_enf.html

Following a breach involving account information for 1.5 million credit card,

debit card, and checking accounts, the FTC charged that shoe discounter

DSW engaged in an unfair practice by failing to provide reasonable security

for sensitive consumer information. In settling the case, as in other FTC data

security orders, DSW agreed to implement a comprehensive information

security program and obtain periodic audits.

United States v. ChoicePoint, Inc.,

1 06-CV-0198 (N.D. Ga. February 15, 2006)

http://www.ftc.gov/privacy/privacyinitiatives/promises_enf.html
16

Following a breach involving the sensitive information, including thousands

of credit reports, of over 160,000 consumers, the FTC charged data broker

ChoicePoint with failing to have reasonable procedures to screen prospective

purchasers of their data products. According to the FTC complaint,

ChoicePoint failed to detect obvious signs that certain purchasers were

lying about their credentials, and as a result, ChoicePoint sold information

to identity thieves posing as legitimate businesses. The FTC charged that

ChoicePoint violated the FCRA by furnishing consumer reports to purchasers

who did not have a permissible purpose to obtain them, and by failing to

maintain reasonable procedures to verify purchasers’ identities and purposes

for obtaining the information. The agency also charged that ChoicePoint

violated the FTC Act by engaging in unfair practices and by making false and

misleading statements in its privacy policies about its credentialing procedures.

The FTC alleged that ChoicePoint’s practices led to at least 800 cases of

identity theft at the time the complaint was filed. In its settlement with the

FTC, ChoicePoint agreed to pay $10 million in civil penalties for its violations

of the FCRA, and $5 million in redress to identity theft victims. The

settlement also requires ChoicePoint to maintain reasonable procedures to

prevent the provision of a consumer report to a party without a permissible

purpose, including specific types of investigation and certification procedures.

In the Matter of BJ’s Wholesale Club, Inc.,

FTC Docket No. C-4148 (Sept. 20, 2005) (consent order)

http://www.ftc.gov/opa/2005/06/bjswholesale.htm

Following a security breach involving account information for thousands

of credit and debit cards, BJ’s settled FTC charges that its failure to take

appropriate security measures to protect the sensitive account information

of its customers was an unfair practice. The FTC had alleged that an

unauthorized person or persons made millions of dollars in fraudulent

purchases using counterfeit copies of credit and debit cards that had been

used at BJ’s stores. In settling the case, as in other FTC data security orders,

BJ’s agreed to implement a comprehensive information security program

and obtain periodic audits.

In the Matter of Petco Animal Supplies, Inc.,

FTC Docket No. C-4133 (March 4, 2005) (consent order)

http://www.ftc.gov/privacy/privacyinitiatives/promises_enf.html

Petco settled FTC charges that security flaws in its www.petco.com web

site violated privacy promises it made to its customers and therefore was

a deceptive practice in violation of the FTC Act. According to the FTC

complaint, Petco made security claims on its website, for example, that

customers’ personal data was encrypted and “strictly shielded from

unauthorized access.” The FTC alleged that, in fact, Petco did not encrypt

the data and failed to implement reasonable measures to protect sensitive

consumer information from common attacks. As a result, a hacker allegedly

PART B
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COMBATING IDENTITY THEFT A Strategic Plan

was able to penetrate the website and access credit card numbers stored in

unencrypted clear text. The settlement prohibits Petco from misrepresenting

the extent to which it maintains and protects sensitive consumer information

and, as in other FTC data security orders, requires the company to implement

a comprehensive information security program and obtain periodic audits.

In the Matter of MTS Inc., d/b/a Tower Records/Books/Video,

FTC Docket No. C-4110 (May 28, 2004) (consent order)

http://www.ftc.gov/privacy/privacyinitiatives/promises_enf.html

Tower settled FTC charges that a security flaw in the Tower website exposed

customers’ personal information to other Internet users, in violation of

Tower’s claims in its privacy policy that it used “state-of-the-art” security

technology. The settlement bars Tower from misrepresenting the extent to

which it maintains and protects the privacy, confidentiality, or security of

personal information collected from or about consumers. As in other FTC

data security cases, Tower also agreed to implement a comprehensive

information security program and obtain periodic audits.

In the Matter of Guess?, Inc.,

FTC Docket No. C-4091(July 30, 2003) (consent order)

http://www.ftc.gov/privacy/privacyinitiatives/promises_enf.html

Guess settled FTC charges that it exposed consumers’ personal information,

including credit card numbers, to commonly known attacks by hackers,

contrary to the company’s claims that it would keep the information secure

and protected. The complaint also alleged that Guess falsely claimed that the

personal information was stored in an encrypted format. According to the

complaint, a visitor to the website, using a common attack, was able to read,

in clear text, credit card numbers stored in Guess’ databases. The settlement,

like those in the Tower and Petco cases, prohibits future misrepresentations and

requires Guess to implement a comprehensive information security program

and obtain periodic audits.

In the Matter of Microsoft Corp.,

FTC Docket No. C-4069 (Dec. 20, 2002) (consent order)

http://www.ftc.gov/privacy/privacyinitiatives/promises_enf.html

Microsoft settled FTC charges that it made false representations about the

security, confidentiality, and features of its “Passport” services, including

claims that purchases made using the service were generally safer or more

secure than purchases made without it. According to the FTC complaint,

Microsoft failed to implement sufficient security procedures to maintain the

high level of security it represented. The settlement, like those in Tower, Petco,

and Guess, prohibits future misrepresentations and requires Microsoft to

implement a comprehensive information security program and obtain

periodic audits.
18

In the Matter of Eli Lilly & Co.,

FTC Docket No. C-4047 (May 8, 2002) (consent order)

http://www.ftc.gov/privacy/privacyinitiatives/promises_enf.html

Lilly settled FTC charges that it engaged in a deceptive practice when it made

claims about the confidentiality of personal information it gathered on its

websites, while failing to maintain measures to protect that information.

These alleged failures led to the company’s disclosure of the email addresses

of 669 subscribers, which essentially revealed that they were users of Lilly’s

prescription drug Prozac. The settlement, like those in Tower, Petco, Guess, and

Microsoft, prohibits future misrepresentations and requires Lilly to implement

a comprehensive information security program and obtain periodic audits.

PART B
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COMBATING IDENTITY THEFT A Strategic Plan

Federal Agency Guidance

While the enforcement efforts by the government are key to sending a

message about the importance of securing data and preventing identity theft,

education and outreach also can help to ensure that companies are aware

of their legal obligations to protect the data they hold. Numerous federal

agencies–including the FTC, the federal bank regulatory agencies, the

National Institute of Standards and Technology (NIST), the Small Business

Administration (SBA), and the Department of Health and Human Services

(HHS)–provide guidance to the industries they regulate on the subject of data

protection. This guidance is accessible through agency websites, written

brochures, speeches, workshops, and conferences. They include the following:

Federal Trade Commission. The FTC’s emphasis is on preventing

breaches before they happen by encouraging businesses to make data

security part of their regular operations and corporate culture. The

agency recognizes that there is no one-size-fits-all data security “fix,”

and offers companies realistic advice about adapting old-school business

practices to meet new-style threats. Its recommendations deal with

employee management and training, appropriate information systems

security, and detecting and managing system failures through constant

monitoring and system updates. The FTC has numerous programs

to inform organizations about their legal responsibilities to strengthen

data security:

Publications. Among the publications the FTC has produced

for businesses are Security Check: Reducing Risks to Your Computer 

Systems, available at www.ftc.gov/bcp/conline/pubs/buspubs/security.

htm; Financial Institutions and Customer Information: Complying with 

the Safeguards Rule, available at www.ftc.gov/bcp/conline/pubs/

buspubs/safeguards.htm; Disposing of Consumer Report Information? 

New Rule Tells How, available at www.ftc.gov/bcp/conline/pubs/

alerts/disposalalrt.htm; and Securing Your Wireless Network, available

at www.ftc.gov/bcp/conline/pubs/online/wireless.pdf. The FTC

has recently issued a new brochure on how entities can safeguard

sensitive consumer information at www.ftc.gov/infosecurity.

OnGuard Online website, available at www.onguardonline.gov. This

website offers practical tips on guarding against Internet fraud,

securing computers, and protecting personal information, as well

as resources for companies in the event of a data breach, such as

law enforcement and credit reporting agency contacts. The site

has daily updates from the Department of Homeland Security

PART C

GUIDANCE FOR BUSINESSES ON SAFEGUARDING DATA
20

(DHS), as well as content developed by IT companies, industry

associations, and other federal agencies.

Workshop on “Technologies for Protecting Personal Information: 

The Consumer and Business Experiences.” The FTC’s efforts on data

security took root in this workshop, which explored the challenges

consumers and industry face in securing their computers. The

workshop featured industry leaders, technologists, researchers

on human behavior, and representatives from consumer and privacy

groups to both identify challenges in safeguarding information and

propose solutions, both technical and human. Information about

this workshop is available at www.ftc.gov/bcp/workshops/technology

and www.ftc.gov/bcp/workshops/technology/finalreport.pdf.

The Division of Privacy and Identity Protection. Recognizing

the need to protect sensitive consumer information and fight

against identity theft, in January 2006, the FTC created a new

Division of Privacy and Identity Protection within its Bureau of

Consumer Protection. This division addresses consumer privacy

and data security matters through aggressive enforcement,

rulemaking, policy development, and creative outreach to

consumers and businesses.

Federal Bank Regulatory Agencies. The federal bank regulatory

agencies also have been extremely active in issuing guidance for financial

institutions relating to information security and identity theft, including

the Federal Financial Institutions Examination Council (“FFIEC”)

Information Technology Examination Handbook’s Information Security 

Booklet, available at http://www.ffiec.gov/guides.htm; the FFIEC’s

guidance entitled Authentication in an Internet Banking Environment,

available at http://www.fdic.gov/consumers/consumer/fighttheft/index.

html; the Interagency Informational Brochure on Internet Phishing Scams,

available at www.fdic.gov/consumers/consumer/fighttheft/index.html; and

the bank regulatory agencies’ letter entitled Identity Theft and Pretext 

Calling, available at http://www.federalreserve.gov/boarddocs/

srletters/2001/sr0111.htm.

3

Securities and Exchange Commission. In June 2000, SEC adopted

Regulation S-P, which implements the GLB Act’s Title V information

privacy and safeguarding requirements for securities brokers and dealers,

investment companies, and SEC-registered investment advisers.

In addition to providing general guidance, Regulation S-P contains

numerous examples specific to the securities industry to provide more

meaningful guidance to help firms implement its requirements. It also

includes a section regarding procedures to safeguard information,

including the disposal of consumer report information. In September

2004 the SEC released a public statement on Regulation S-P’s

PART C
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COMBATING IDENTITY THEFT A Strategic Plan

safeguarding requirements. See Disposal of Consumer Report

Information, Release Nos. 34-50361, IA-2293, IC-26596 (Sept. 14, 2004).

National Credit Union Administration. The NCUA offers advice to

credit unions on issues related to data security. It has issued numerous

letters to credit unions that provide guidance on these issues (available at

www.ncua.gov/letters/letters.html), and representatives from the NCUA

regularly speak on information security issues at credit union conferences.

Small Business Administration. The SBA offers information and

data security guidance targeted towards small businesses. The SBA’s

website, www.sba.gov/beawareandprepare/cyber.html, serves as a portal to

private sector sites that offer information for safeguarding computers

against cyber attacks, and directs users to NIST’s Computer Security

Division’s Small Business Corner, which provides “Cyber Security Tips”

on subjects including spyware, email hoaxes, employee awareness, and

firewalls (available at sbc.nist.gov/cyber-security-tips/). The SBA also

offers workshops on small business computer security around the

country, co-sponsored by the SBA and the Federal Bureau of

Investigation (FBI), that allow participants to explore practical tools

to assess and improve the security of their information.

Department of Health and Human Services. The Department of

Health and Human Services provides entities with information to help

their compliance with the Privacy and Security Rules of HIPAA. The

Office for Civil Rights provides guidance and educational materials

for entities required to comply with the Privacy Rule, and the Office

of e-Health Standards and Services in the Centers for Medicare and

Medicaid Services provides guidance and educational materials for

entities required to comply with the Security Rule. The Privacy Rule

sets standards that protect the privacy of health information, and the

associated Security Rule sets standards to assure the confidentiality,

integrity, and availability of electronic protected health information.

Private Sector Guidance

Private sector entities also provide guidance to businesses that addresses

safeguarding sensitive data, usually targeted to entities based on their industry

sector or size. A few examples include:

Financial Services Industry. The Financial Services Roundtable has

developed voluntary guidelines to address data security concerns in the

financial services industry, such as incorporating security awareness and

education into corporate-wide training programs, encrypting some types

of financial data and customer data when it is transported on unprotected

networks or stored for aggregation-related processes, and using Secure

Socket Layers (SSL) when obtaining data feeds for aggregation-related

processes.4 The financial services industry also has produced white

papers and reports, which include advice about new account/application
22

review, “Know Your Employee” practices that are designed to screen

criminals out of financial institutions, and using technology to identify

and manage fraud and identity theft.5

	 The payment card segment of the financial services industry has adopted

a single set of data security standards, the Payment Card Industry Data

Security Standards (PCI Standards), for all merchants and service

providers that store, process, or transmit cardholder data. These standards,

which card companies have adopted voluntarily, resulted from a

collaboration between Visa and MasterCard, and have been endorsed

by other major U.S. card companies.6 The PCI Standards are designed

to ensure the proper handling and protection of cardholder account and

transaction information. Major card companies have their own programs

to ensure data security compliance in accordance with PCI standards,

and each company enforces the standards via their individual programs.

Visa, for example, instituted a program called Cardholder Information

Security Program for this purpose; information about this program is

available at http://usa.visa.com/business/accepting_visa/ops_risk_

management/cisp.html. Under individual company programs, failure

to comply with the standards may subject merchants and service

providers to fines levied by the card company and possible revocation

of the right to participate in the card company’s network.

Real Estate Industry. Real estate associations also have issued

information security guidelines that address how the industry collects,

shares, and protects the consumer information it uses and receives.

One set of guidelines issued by the National Association of Realtors

(available at http://www.realtor.org/realtororg.nsf/files/ 

NARInternetSecurityGuide.pdf/$FILE/NARInternetSecurityGuide.pdf),

consolidates best practices for real estate agents, multiple listing services,

and associations to improve their security safeguards. The guidelines

recommend setting policies for the acceptable use of information; creating

management oversight, including setting up an information security

management committee; setting up access controls on a “need to know”

basis; implementing appropriate personnel screening and regular training;

instituting physical controls including locks and appropriate disposal

tactics; and using technology applications to secure data and detect

problems (e.g., cryptographic controls, network intrusion detection).

Health Care Industry. The health care industry has applied significant

resources towards improving the privacy and security of its business

practices. Major industry organizations such as the American Hospital

Association and the American Medical Association produce handbooks

and toolkits, and partner with vendors to provide security and privacy

guidance to their members. WEDI (Workgroup for Electronic Data

Interchange), an industry nonprofit dedicated to improving health care

through electronic commerce, has produced a series of white papers that

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COMBATING IDENTITY THEFT A Strategic Plan

provide guidance on topics that include encryption, disaster recovery,

policies and procedures, and evaluation, available at www.wedi.org.

Industry-sponsored conferences and seminars focused on implementing

privacy and security protections for health information are commonplace.

Providing the tools to enable compliance with the HIPAA Security and

Privacy Rules has been the common goal of these efforts.

Internet Service and Electronic Mailbox Providers. Because

of their unique position in the internet community, internet service

providers (ISPs) and electronic mailbox providers pay particular

attention to data security issues. Guidelines from the Anti-Phishing

Working Group (APWG), available at www.antiphishing.org/reports/

bestpracticesforisps.pdf, focus on how ISPs and mailbox providers can

prevent and mitigate the damage caused by phishing attacks. They

recommend a number of practices, including using inbound and

outbound filtration technology to prevent spam, monitoring bounced

email messages to help determine when a phishing attack is underway,

disabling hyperlinks in emails from sources that are not trusted, and

providing customers relevant, accurate information about phishing

and what to do following an attack.

Small Businesses. Organizations also have made available

information on how to recognize and address identity theft and fraud

directed toward small businesses. The U.S. Chamber of Commerce,

for instance, offers a “Security Toolkit” for small businesses, available

at www.uschamber.com/sb/security/default.htm, that includes information

about compliance with PCI standards, technology tips, a Microsoft

Interactive Security Video, a sample security plan, and technical tools.

The Chamber is conducting a series of seminars in 12 cities, featuring

experts from Visa, that should help businesses that accept credit or debit

card payments understand the basic requirements for handling sensitive

customer data. Information about these seminars is available at www.

uschamber.com/events/visatour.

	 Other organizations, such as the Council of Better Business Bureaus

and the National Cyber Security Alliance, provide guidelines that

serve as primers for incorporating basic security and privacy practices

into everyday business operations that are appropriately tailored

for smaller companies. These guidelines, available at www.bbb.org/

securityandprivacy/SecurityPrivacyMadeSimpler.pdf and www.

staysafeonline.org/basics/company/basic_tips.html, emphasize the

importance of employee screening and training and the use of physical

safeguards beyond electronic measures to prevent identity theft. They

include tips on: recognizing attempts at theft and fraud; understanding

the importance of offline and online security and privacy safeguards;

developing security and privacy policies and communicating them to

customers; training employees; handling and managing sensitive
24

information; managing employees as they interact with customers and

their personal data; credit card/debit card security safeguards; physically

safeguarding systems and accessories; using the latest technologies;

instituting controls to prevent phishing; and conducting international

transactions securely.

Nonprofit Organizations. Nonprofit organizations also have issued

guidance to businesses. For example, one nonprofit organization focused

on online privacy has guidelines available for companies drafting

internal data security at www.truste.org/pdf/SecurityGuidelines.pdf. The

guidelines stress that reasonable security standards are not “one size

fits all,” and offer companies a non-technical high level overview of

recommended security practices for consideration.

Some private sector entities also have developed standards and guidelines

regarding specific issues that raise security concerns:

Contractual Arrangements with Service Providers. The guidance

from the private sector generally recognizes that entities have a

responsibility to ensure that their security and privacy policies are

implemented and enforced. Typically, private sector guidelines recognize

the importance of contractually requiring all third party service vendors

with access to an organization’s sensitive data, such as outsourced IT

or data management operations, to adhere to the contracting entity’s

security requirements.7 These guidelines also address specific practices

for contracting organizations, including conducting a site audit of a

vendor’s data center to determine the adequacy of the security

infrastructure; requiring vendors to provide certification that they

are in compliance with the contracting organization’s privacy and data

protection obligations; and performing periodic or random audits of

vendors or outsourcers.8

Encryption. Encryption is the process of converting plaintext into

ciphertext to ensure that data can be read only by the intended recipient.

Categories of information for encryption commonly include access

passwords, email, files on laptops, stored data, and virtual private

networks (VPNs), which use a public telecommunication infrastructure

like the Internet to provide remote users with secure access to their

organization’s network. A number of industry groups are developing

new policies that recommend the use of encryption to enhance internal

data storage security.9 In the wake of several highly publicized security

breaches, encryption is being viewed as a tool for providing enhanced

security for portable devices (laptops) and for media (backup tapes).10

Preventing Malware. Malware is considered a growing threat to data

privacy and security.11 Spyware, a type of malware intended to violate

a user’s privacy, is becoming more widespread, and is leading

organizations and computer users to take new precautions.12 Some

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COMBATING IDENTITY THEFT A Strategic Plan

businesses have adopted industry and government guidelines on how to

detect and avoid malware, including guidelines developed by NIST.

Although developed for use by federal agencies, the NIST guidelines

have been adopted voluntarily by many businesses as well.13 NIST’s

recommendations for improving an organization’s malware incident

prevention measures include: planning and implementing an approach

to malware incident prevention based on the most likely attack points;

ensuring that policies support the prevention of malware incidents and

including provisions related to remote workers; and using appropriate

techniques to prevent malware incidents (e.g., patch management,

application of security configuration guides).14

Employee Data. While some guidance to businesses is exclusively or

primarily focused on providing advice about securing customer data,

some organizations concentrate their efforts on guidelines and best

practices for protecting the data of employees. For instance, the Society

for Human Resource Management offers its members reports and

toolkits related to identity theft, data security, and HIPAA privacy,

including advice about compliance with federal and state privacy laws,

on its website at www.shrm.org.

State Guidance

Many state consumer protection agencies and Attorneys General have

information and guidance for businesses to help them protect consumers’

sensitive information. A few examples of states providing this type of

guidance include:

California. California has created an Office of Privacy Protection

to promote and protect consumers’ rights. This office makes available

numerous publications to assist businesses in complying with federal

and state safeguards requirements as well as improving their general

information security practices. In its publication, A California Business 

Privacy Handbook (available at www.privacyprotection.ca.gov/

recommendations/ca_business_privacy_hb.pdf), the state’s Office of Privacy

Protection describes basic techniques that companies can use

to protect personal information and prevent identity theft, such as

controlling access to personal information and securely disposing of

materials containing sensitive consumer information. Likewise, in its

Recommended Practices for Protecting the Confidentiality of Social Security 

Numbers (available at www.privacyprotection.ca.gov/recommendations/

ssnrecommendations.pdf), the state provides businesses with information

on federal and state laws regarding the collection, use, and confidentiality

of SSNs, as well as recommended practices like reducing the unnecessary

collection of SSNs and eliminating the public display of SSNs.
26

New York. The New York State Office of Cyber Security and Critical

Infrastructure Coordination has published Best Practices and Assessment 

Tools to Promote Cyber Security Awareness. This guide includes advice

specifically directed at corporations and small businesses.

Wisconsin. Like California, Wisconsin has created an agency to

address consumers’ privacy rights, the Office of Privacy Protection

within the Wisconsin Department of Agriculture, Trade and Consumer

Protection division. This office provides guidance for small businesses

through its website, available at www.privacy.wi.gov/business/business.jsp,

which recommends actions like limiting the collection of sensitive

information, and screening and training employees.

	 	

PART C
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COMBATING IDENTITY THEFT A Strategic Plan

Federal Guidance

In addition to providing guidance on safeguarding sensitive information,

the federal government offers businesses guidance on what to do in the event

of a data breach. The federal bank regulatory agencies (the FRB, FDIC,

NCUA, OCC, and OTS), for example, have issued detailed guidance on

financial institutions’ response programs and customer notice, which is

discussed in detail in Part A, above. The FTC offers businesses guidance on

breach notifications in a booklet entitled Information Compromise and the Risk of 

Identity Theft: Guidance for Your Business, available at http://www.ftc.gov/bcp/

edu/pubs/business/idtheft/bus59.htm. The FTC recommends that when a data

compromise could result in harm to a person or business, private entities

should contact appropriate local law enforcement as soon as possible. The

FTC also recommends that companies consider contacting other businesses

that may be impacted by a data breach, such as banks or credit issuers, and

if names and SSNs have been stolen, the major credit bureaus. Finally, when

deciding if or when individual consumer notification is warranted, the FTC

recommends that businesses consider the nature of the compromise, the type

of information taken, the likelihood of misuse, and the potential damage

arising from misuse. The FTC’s booklet also contains a model letter for

businesses notifying people whose names and SSNs have been stolen.

Private Sector Guidance

In light of recent high-profile data breaches, a number of private sector

organizations also have developed guidance regarding how to respond

to breaches and when to provide notice to consumers. Some of this guidance

is designed to facilitate compliance with applicable laws, regulations, or

industry standards. Examples of entities providing this guidance include:

The American Bankers Association (ABA). The ABA sponsors

conferences on regulatory compliance that address responding to

information breaches; information about these conferences is available

at www.aba.com/Events/NCS.htm. The ABA also provides online

information about establishing a response program and notifying

customers on its website at www.aba.com/About+ABA/

datasecuritynotification.htm.

The Financial Services Roundtable. The Financial Services

Roundtable has developed guidelines to address breach response issues,

available at www.bitsinfo.org/downloads/Publications%20Page/

bitscons2005.pdf.

The Payment Card Industry (PCI). Members of the payment card

industry also have issued guidance for businesses to respond to security

PART D

GUIDANCE FOR BUSINESSES ON DATA BREACHES
28

incidents in order to comply with the PCI standards. For instance,

individual card companies have issued step-by-step instructions and

workbooks for businesses responding to a security incident.15 Businesses

are encouraged to create an internal response plan that, among other

things, confirms, analyzes, and documents events, and allows for a quick

response to maintain and restore business continuity.16 In the event of a

suspected or confirmed security breach, merchants and service providers

are advised to immediately contain the breach and limit possible

exposure of consumer information while preserving logs and electronic

evidence.17 Affected companies are advised to contact their internal

information security group and incident response team, merchant bank,

card company, and the local office of the United States Secret Service

(USSS).18 Moreover, businesses are advised to conduct a forensic

analysis of the event and maintain logs and evidence to assist law

enforcement authorities in investigations.19

Nonprofit Organizations. Nonprofit organizations that specialize

in data security and privacy issues also have distributed guidance for

businesses in the event of a data security breach. For instance, the

National Cyber Security Alliance offers a guide on Small Business Incident 

Recovery and Reporting, available at www.staysafeonline.org/basics/

recovery/recoveryandreporting.html. This guide includes information

about establishing an internal incident response team to respond to

security incidents, and a formal written breach response plan and

process for reporting and escalating incidents. The Identity Theft

Resource Center (ITRC) provides similar guidance on its website at www.

idtheftcenter.org/index.shtml. In addition, the Council of Better Business

Bureaus has created guidelines specifically targeted to small businesses,

available at www.bbb.org/securityandprivacy/SecurityPrivacyMadeSimpler.

pdf. Although not all states require customer notification in the event of

a breach, the guidance urges companies to consider the advantages of

notifying those whose information has been compromised.

Other organizations, including higher education associations,20

professional associations,21 and firms that offer consulting or policy

development services related to data security,22 have provided advice

and guidance to businesses in the event of a data breach. The guidance

relates to policies, procedures, technical tools, and notice to consumers

for businesses responding to a security incident.

State Guidance

State consumer protection agencies and Attorneys General also offer

guidance on responding to data breaches. Among states offering such

guidance are:

PART D
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COMBATING IDENTITY THEFT A Strategic Plan

California. California’s Recommended Practices on Notice of Security Breach 

Involving Personal Information, available at www.privacyprotection.ca.gov/

recommendations/secbreach.pdf, has information about the state’s breach

notification law, as well as recommended practices for protection and

prevention, preparation for notification, and notification itself. This

document offers guidance on developing an incident response plan, with

instructions for developing written procedures for internal notification

processes, designating an individual responsible for coordinating internal

notification procedures, and responding to the breach by providing

notice to consumers and law enforcement. The document also provides

sample breach notice letters. 

Wisconsin. The Wisconsin Department of Agriculture, Trade and

Consumer Protection, Office of Privacy Protection, publishes a fact

sheet entitled How Small Business Can Help in the Fight Against ID Theft,

(available at www.privacy.wi.gov./business/business.jsp), which

recommends that businesses create an action plan in advance for

responding to data breaches. In the event of a breach, businesses are

encouraged to investigate internally while devising a plan for notifying

people that a breach has occurred.

Colorado. The Colorado Attorney General’s office provides information

about data breach response plans to businesses on its website at www.

ago.state.co.us/idtheft/clients.cfm. It recommends that businesses have

policies and procedures in place to isolate the information that has been

compromised, promptly notify all affected customers of the breach, and

promptly notify the appropriate law enforcement office of the breach.
30

The federal government has produced, promoted, and distributed an

extensive library of consumer education materials in print and electronic

formats to help consumers learn about various aspects of identity theft.

Listed below are titles and locations of each agency’s identity theft consumer

education materials.

FEDERAL TRADE COMMISSION (FTC)

www.ftc.gov

The FTC has played a primary role in consumer awareness and education,

developing information that has been co-branded by a variety of groups and

agencies. Its website, www.ftc.gov/idtheft, serves as a comprehensive one-stop

resource in both English and Spanish for consumers. (Spanish–www.consumer.

gov/idtheft/espanol.htm.)

The FTC also recently implemented a national public awareness campaign

centered around the themes of “Deter, Detect, and Defend.” This campaign

seeks to drive behavioral change in consumers that will reduce their risk of

identity theft (Deter); encourage consumer monitoring of their credit reports

and accounts to alert them of identity theft soon after it occurs (Detect);

and mitigate the damage caused by identity theft should it occur (Defend).

This campaign, mandated in the FACT Act, consists of material written

for consumers about identity theft and material written for organizations,

community leaders, and local law enforcement on how to communicate and

educate their constituencies about identity theft. www.consumer.gov/idtheft/

ddd/index.html. (Spanish–www.consumer.gov/idtheft/ddd/espanol.html).

The Deter, Detect, and Defend materials have been adopted and distributed

by hundreds of entities, both public and private, involved in the fight against

identity theft. The National Council of Higher Education Loan Program,

the Direct Marketing Association, the National Association of Realtors, the

Internal Revenue Service (IRS), neighborhood associations, and over 500

local law enforcement agencies among others, are using the materials as part

of their own consumer education efforts. The U.S. Department of Justice’s

Office for Victims of Crimes disseminated 4,600 Deter, Detect, Defend kits

to the victim services field offices.

Other FTC publications include:

Fighting Back Against Identity Theft

www.ftc.gov/bcp/edu/pubs/consumer/idtheft/idt01.htm

ID Theft: What It’s All About

www.ftc.gov/bcp/conline/pubs/credit/idtheftmini.htm

In Spanish—www.ftc.gov/bcp/conline/spanish/credit/s-idtheftmini.htm

PART E

FEDERAL CONSUMER EDUCATION EFFORTS
31

COMBATING IDENTITY THEFT A Strategic Plan

Take Charge: Fighting Back Against Identity Theft

www.ftc.gov/bcp/conline/pubs/credit/idtheft.htm

In Spanish—www.ftc.gov/bcp/conline/spanish/credit/s-idtheft.htm

“Active Duty” Alerts Help Protect Military Personnel from Identity Theft

www.ftc.gov/bcp/conline/pubs/alerts/dutyalrt.htm		

What To Do If Your Personal Information Has Been Compromised

www.ftc.gov/bcp/conline/pubs/alerts/infocompalrt.htm

Remedying the Effects of Identity Theft

www.ftc.gov/bcp/conline/pubs/credit/idtsummary.pdf

In Spanish—www.ftc.gov/bcp/conline/spanish/credit/s-idtsummary.pdf

Your Access to Free Credit Reports

www.ftc.gov/bcp/conline/pubs/credit/freereports.htm

In Spanish—www.ftc.gov/bcp/conline/spanish/credit/s-freereports.htm

How Not to Get Hooked by a Phishing Scam

www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt127.htm

In Spanish—www.ftc.gov/bcp/conline/spanish/alerts/s-phishingalrt.htm

Privacy Choices for Your Personal Financial Information

www.ftc.gov/bcp/conline/pubs/credit/privchoices.htm

Medicare Part D Solicitations: Words to the Wise About Fraud

www.ftc.gov/bcp/conline/pubs/alerts/meddalrt.htm

ID Theft Audio File —Audio 1, Audio 2

www.consumer.gov/idtheft/con_pubs.htm

ID Theft Video News Release (Dial Up Version—56k)—Video 1, Video 2

www.consumer.gov/idtheft/con_pubs.htm

ID Theft Video News Release (Broadband Version)—Video 1, Video 2

www.consumer.gov/idtheft/con_pubs.htm

U.S. DEPARTMENT OF JUSTICE (DOJ)

www.usdoj.gov

Bureau of Justice Assistance (BJA)

The Justice Department’s BJA, together with the National Crime Prevention

Council, created an identity theft booklet, Preventing Identity Theft: a Guide for 

Consumers,

23 and produced radio and television public service announcements

about identity theft, featuring McGruff® the Crime Dog. Other publications

include Identity Theft and Fraud, at www.usdoj.gov/criminal/fraud/idtheft.html.
32

Office for Victims of Crime (OVC)

The Department of Justice’s OVC has several web pages on identity theft,24

and has provided funding to several identity theft-related initiatives, such as

the Ohio Identity Theft Verification Passport program. Other publications

include Identity Theft, at www.ojp.gov/ovc/help/it.htm.

Office of Justice Programs (OJP)

The Department of Justice’s OJP also has developed some identity theft

resources, including the following publications:

Justice Resource Update

www.ncjrs.gov/jru/spring_2006/featured.html

Preventing Identity Theft: A Guide for Consumers

www.ncpc.org/cms/cms-upload/prevent/files/idtheftrev.pdf

Executive Office for United States Trustees

The Executive Office for the United States Trustees, a component of DOJ,

has developed the following publication on identity theft: Fraud/Identity Theft,

at www.usdoj.gov/ust/r16/fraud.htm.

United States Attorney’s Offices (www.usdoj.gov/usao)

Some United States Attorney’s Offices also have their own identity theft

web pages, for example: www.usdoj.gov/usao/gan/citizen/idtheft.html

and www.usdoj.gov/usao/cac/idtheft/idtheft.html.

U.S. DEPARTMENT OF THE TREASURY

www.treas.gov

Over 120,000 copies of the Department of the Treasury’s DVD about identity

theft, Identity Theft: Outsmarting the Crooks, have been distributed to the public.

See www.treasury.gov/press/releases/js3083.htm. In addition, the Department of

the Treasury has developed Identity Theft Resource Page, which can be found

at www.treas.gov/offices/domestic-finance/financial-institution/cip/identitytheft.shtml.

The FACT Act established the Financial Literacy and Education Commission

(the Commission), and appointed the Secretary of the Treasury as head. The

Commission, composed of 19 other federal agencies and bureaus, launched

a website and toll-free hotline for financial literacy in 2004, www.MyMoney.

gov and 1–888–MY–MONEY, along with a free toolkit. These resources

include consumer information (available in English and Spanish) about how

to defend oneself against identity theft and what victims should do to set their

records straight.

Separately, the Department of Treasury’s Financial Management Service and

the Federal Reserve Banks sponsor Go Direct, a campaign to motivate people

who receive federal benefit checks to use direct deposit. Direct deposit is the

PART E
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COMBATING IDENTITY THEFT A Strategic Plan

best way for people to get their Social Security and SSI payments because it

eliminates the risk of stolen checks, reduces fraud, and gives them more

control over their money. A simple action like enrolling in direct deposit can

offer much-needed peace of mind to people who rely on federal benefits, most

of whom are seniors and people with disabilities.

Office of the Comptroller of the Currency (www.occ.treas.gov)

The OCC has issued a number of publications on identity theft. Those include

the following:

Fight Back: What You Can Do about Identity Theft

www.occ.gov/consumer/idtheft.htm

How to Avoid Becoming a Victim of Identity Theft

www.occ.treas.gov/idtheft.pdf

Internet Pirates Are Trying to Steal Your Personal Financial Information

www.occ.gov/consumer/phishing.htm

Check Fraud: A Guide to Avoiding Losses

www.occ.treas.gov/chckfrd/chckfrd.pdf

Office of Thrift Supervision (www.ots.treas.gov)

The OTS has issued a number of publications related to identity theft.

These publications deal with topics including pretext calling, phishing

and email scams, and customer/consumer education, and can be found

on the OTS website.

Internal Revenue Service (www.irs.gov)

The IRS, another arm of the Treasury Department, has issued the following

publication on identity theft:

Identity Theft and Your Tax Records

www.irs.gov/individuals/article/0,,id=136324,00.html

Treasury Inspector General for Tax Administration (www.treas.gov/tigta) 

TIGTA has issued the following publication for taxpayers relating to identity

theft:

Computer Security Bulletin—Phishing Scams

www.treas.gov/tigta/docs/phishing_alert_2006.pdf

U.S. SECRET SERVICE (USSS) 

www.secretservice.gov

The USSS, a component of DHS, is active in the investigation of identity

theft. In that role, it also has issued the following guidance on identity theft:
34

Financial Crimes Division

www.treas.gov/usss/financial_crimes.shtml

Frequently Asked Questions (FAQ): Protecting Yourself

www.treas.gov/usss/faq.shtml#identity

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)

www.fdic.gov

The FDIC’s December 2004 Identity Theft Study recommended the

development of an educational initiative targeted to online banking customers

on how to avoid common scams. That initiative, entitled Don’t Be an On-Line 

Victim, is comprised of three parts: how consumers can secure their computer;

how consumers can protect themselves from electronic scams that can lead to

identity theft; and what consumers should do if they become the victim of

identity theft. The educational tool is being distributed through the FDIC

website and via CD-ROM. Additionally, in 2005, the FDIC sponsored four

identity theft symposia entitled Fighting Back Against Phishing and AccountHijacking. Each symposium included presentations by panels of experts from

federal and state government, the banking industry, consumer organizations,

and law enforcement. Total attendance at the symposia exceeded 575. The

FDIC’s 2006 symposia series, Building Consumer Confidence in an E-Commerce 

World, was a continuation of the FDIC’s efforts to facilitate dialogue on the

risks and solutions for e-commerce and payment system fraud. The FDIC is

also working on an educational campaign, scheduled for rollout in 2007, to

educate consumers about online banking and the protections available to

them that make it safe.

The FDIC’s other publications on identity theft include the following:

Classic Cons... And How to Counter Them

www.fdic.gov/consumers/consumer/news/cnsprg98/cons.html

A Crook Has Drained Your Account. Who Pays?

www.fdic.gov/consumers/consumer/news/cnsprg98/crook.html

When a Criminal’s Cover Is Your Identity

www.fdic.gov/consumers/privacy/criminalscover/index.html

Your Wallet: A Loser’s Manual

www.fdic.gov/consumers/consumer/news/cnfall97/wallet.html

Identity Theft

www.fdic.gov/consumers/consumer/alerts/theft.html

PART E
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COMBATING IDENTITY THEFT A Strategic Plan

NATIONAL CREDIT UNION ADMINISTRATION (NCUA)

www.ncua.gov

The NCUA’s primary publication on identity theft, entitled You Can Fight

Identity Theft, can be found at www.ncua.gov/publications/brochures/

identitytheft/phishbrochure-web.pdf.

FEDERAL RESERVE SYSTEM

www.federalreserve.gov

The Federal Reserve Bank of Boston has published a consumer brochure

entitled Identity Theft, which can be found at www.bos.frb.org/consumer/

identity/idtheft.htm.

U.S. SOCIAL SECURITY ADMINISTRATION (SSA)

www.socialsecurity.gov

The SSA has a hotline for reporting fraud, which can be found at www.

socialsecurity.gov/oig/guidelin.htm. In addition, the SSA’s website, www.

socialsecurity.gov/pubs/idtheft.htm, provides links to various resources to assist

victims of identity theft. SSA has several printed publications (in English and

Spanish) on safeguarding the use of SSNs and cards to help prevent identity

theft. These include the following:

Identity Theft and Your Social Security Number 

(SSA Publication No. 05-10064)

www.socialsecurity.gov/pubs/10064.html

Your Social Security Number and Card

(SSA Pub. No. 05-10002)

www.socialsecurity.gov/pubs/10002.html

New Rules for Getting a Social Security Number and Card

(SSA Publication No. 05-10120)

www.socialsecurity.gov/pubs/10120.html

Frequently Asked Questions on SSA’s Internet website

www.socialsecurity.gov

SSA OIG (Office of Inspector General): When Someone Else Uses Your 

Social Security Number Fact Sheet

www.socialsecurity.gov/oig/hotline/when.htm

SSA OIG—Identity Theft Links

www.socialsecurity.gov/oig/investigations/links.htm
36

U.S. POSTAL INSPECTION SERVICE (USPIS)

www.usps.com

The USPIS has been active in engaging in outreach activities related to

identity theft. For example, the USPIS, together with the FTC and the Better

Business Bureau (BBB), developed the “Shred It & Forget It” campaign,

which encourages consumers to shred discarded documents containing

personal information. The USPIS also maintains an identity theft website

and has conducted national campaigns about Internet fraud and identity

theft, and produced two DVDs on these subjects–“Identity Crisis” and “Web

of Deceit”–and Publication 248, “Safeguard Your Personal Information.”

Other publications include:

ID Theft Poster

www.usps.com/websites/depart/inspect/idposter.pdf

Identity Theft Is America’s Fastest-Growing Crime

www.usps.com/websites/depart/inspect/idthft_ncpw.htm

Read These Tips to Protect Yourself from Identity Theft

www.usps.com/websites/depart/inspect/idtheftips.htm

Safeguard Your Personal Information

www.usps.com/cpim/ftp/pubs/pub280/welcome.htm

Identity Theft: Stealing Your Name and Your Money

www.usps.com/websites/depart/inspect/IDtheft2.htm

Identity Crisis—DVD

www.usps.com/websites/depart/inspect/idthft_ncpw.htm

LooksTooGoodToBeTrue.com

http://www.lookstoogoodtobetrue.com/fraud.aspx

U.S. DEPARTMENT OF EDUCATION

www.ed.gov

The Department of Education offers materials aimed at increasing students’

and college administrators’ awareness of identity theft and steps to reducing

students’ chances of falling victim. The Department also has included identity

theft prevention tips in the billing statements that are sent to student

borrowers. Its Federal Student Aid website, www.federalstudentaid.ed.gov,

contains information on safeguarding student aid information and reducing

the risk of identity theft.25 The Department’s OIG’s website, www.ed.gov/

misused, both offers and collects information on identity theft. The OIG also

conducts presentations at conferences of financial aid professionals, and has

developed a DVD, FSA Identity Theft—We Need Your Help, to alert the financial

aid community to the problem.

PART E
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COMBATING IDENTITY THEFT A Strategic Plan

DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS)

www.hhs.gov

Office of Disease Prevention and Health Promotion

HHS’s Office of Disease Prevention and Health Promotion has circulated the

following publication relating to identity theft: Healthfinder—Protecting Your 

Identity, which can be found at www.healthfinder.gov/docs/doc09195.htm.	

Centers for Medicare and Medicaid Services (www.cms.gov)

HHS’s Centers for Medicare and Medicaid Services has released the following

publications relating to identity theft:

Medicare and You 2006

www.medicare.gov/publications/pubs/pdf/10050.pdf

Holding Ourselves to a Higher Standard

www.cms.hhs.gov/InformationSecurity/

The National Women’s Health Information Center 

Protecting Yourself from Cybercrime

www.girlshealth.gov/safety/internet.cybercrime.htm

Food and Drug Administration (www.fda.gov)

The FDA’s publications relating to identity theft include the FDA Consumer

magazine (July-August 2005 Issue), and Be Aware and Beware of Identity Theft,

which can be found at www.fda.gov/fdac/departs/2005/405_fda.html#theft.

National Institutes of Health (NIH): National Institute on Aging

The NIH’s National Institute on Aging provides guidance to the elderly on

matters related to identity theft in a publication entitled Age Page—Crime and 

Older People, which can be found at www.niapublications.org/agepages/PDFs/

Crime_and_Older_People.pdf.

Administration on Aging

HHS’s Administration on Aging has supported the development of the

following materials related to identity theft:

Protect Yourself from Identity Theft

www.consumerlaw.org/action_agenda/seniors_initiative/

identity_theft.shtml

What You Should Know About Your Credit Report

www.consumerlaw.org/action_agenda/seniors_initiative/content/

CFactsCreditReport.pdf

Protecting Older Americans from Telemarketing Scams: 

A Quick Guide for Advocates

www.consumerlaw.org/initiatives/seniors_initiative/

concerns_telemarket.shtml
38

What To Do If You’ve Become The Victim of Telemarketing Fraud

www.consumerlaw.org/initiatives/seniors_initiative/telemarketing_

fraud.shtml

Neremberg, L. (June 2003). Daily Money Management Programs—

A Protection Against Elder Abuse

www.elderabusecenter.org/pdf/publication/DailyMoneyManagement.pdf

In addition, the Administration on Aging’s Senior Medicare Patrol (SMP)

program utilizes the skills and expertise of volunteers that educate and

empower beneficiaries to take an active role in the detection and prevention of

health care fraud and abuse, with a focus on the Medicare and Medicaid

programs. The National Consumer Protection Technical Resource Center

(www.smpresource.org) provides further information on the SMP program and

a variety of consumer protection materials.

SECURITIES AND EXCHANGE COMMISSION (SEC)

www.sec.gov

The SEC’s guidance to consumers on identity theft includes a publication

entitled Online Brokerage Accounts: What You Can Do to Safeguard Your Money 

and Your Personal Information, which can be found at www.sec.gov/investor/

pubs/onlinebrokerage.htm.

PART E
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COMBATING IDENTITY THEFT A Strategic Plan

The private sector has produced, promoted, and distributed an extensive

library of consumer education materials in print and electronic formats

to help consumers learn about various aspects of identity theft. Listed below

are titles and links to a sample of individual organizations’ identity theft

consumer education materials, presented by sector.

Information Technology (IT)

Material produced by the information technology industry, most often

delivered through the Internet, focuses largely on secure and safe computing,

urging consumers to install anti-spyware, anti-virus, and firewall software

on their computers, and educating them about the harm that can result from

phishing, malware, and spyware. The information generally warns consumers

against responding to spam and divulging personal information in email

or on unsecured websites, and provides tips on creating strong passwords.

For example, the National Cyber Security Alliance maintains Stay Safe

Online, a website with tips on safe computing for adults and children.26

In addition, much of the material is directed to warning consumers about

the existence of phishing attacks and assisting consumers in spotting suspect

emails and websites. Microsoft and Best Buy, along with several other private

and public partners, sponsor the Get Net Safe Tour, in which experts visit

schools, hold assemblies, parents nights, local community and senior events,

and Internet fairs to discuss general Internet safety, including topics related to

identity theft. Similarly, Americans for Technology Leadership, a coalition of

technology professionals, consumers, and organizations, conducts Take Back

The Net cybersecurity workshops, which include discussions of phishing and

other identity theft-related topics, for consumers throughout the country.

AOL

Money & Finance—Identity Theft

money.aol.com/creditdebt/identity/

Microsoft

Security at Home: Protect Yourself

www.microsoft.com/athome/security/privacy/default.mspx

Earthlink

Earthlink Identity Protection Center

www.earthlink.net/mysecurity/identity/

E-bay

Tutorial: Spoof (fake) E-mails

www.pages.ebay.com/education/spooftutorial/

PART F

PRIVATE SECTOR CONSUMER EDUCATION EFFORTS
40

The National Cyber Security Alliance

Don’t Take the Bait! Avoid Getting Hooked By “Phishers” Trying

to Steal Your Personal Information

www.staysafeonline.org/basics/pharming_tips.html

The Anti-Phishing Working Group

www.antiphishing.org/phishing_archive.html

Consumer Advice: What To Do If You’ve Given Out Your Personal

Financial Information

www.antiphishing.org/consumer_recs2.html

GetNetWise

www.getnetwise.org 

The Business Software Alliance / Cybersafety

Phishing: Do you know if someone is trying to steal your identity?

www.bsacybersafety.com/index.cfm

Financial Institutions and Credit Providers

The financial services sector provides a great deal of information about

common frauds related to identity theft, such as phishing, pharming,

spoofing, pretext calling, and dumpster diving. Many institutions and credit

card service providers also offer their customers information about identity

theft prevention and remediation through statement stuffers, mailers, and

websites. The information often includes explanations of common

terminology and definitions related to these frauds, as well as explanations

about how they work. The Texas Bankers Association, for example, produces

inserts, posters, and wallet cards about identity theft for distribution to

customers by Texas banks.27 The Securities Industry Association publishes a

booklet that informs investors of how to avoid identity theft and what to do if

they are the victim of identity theft.28 Securities self-regulatory organizations

(SROs), such as the NASD and the NYSE, also publish guidance relating to

identity theft. For example, NASD has published “Phishing and Other Online 

Identity Theft Scams: Don’t Take the Bait.”29

MasterCard

Identity Theft

www.mastercard.com/us/personal/en/securityandbasics/identitytheft/

index.html

Visa USA

Protect Yourself

www.usa.visa.com/personal/security/protect_yourself/index.html 

Bank of America

Identity Theft and Your Rights

www.bankofamerica.com/privacy/Control.do?body=privacy

secur_idprotect

PART F
41

COMBATING IDENTITY THEFT A Strategic Plan

Capital One

Find Out How To Protect Yourself From Fraud And Identity Theft

www.capitalone.com/fraud/

Chase

Identity Theft

www.chase.com/ccp/index.jsp?pg_name=ccpmapp/shared/assets/page/

Identity_Theft

Citi

Protect Yourself

www.citibank.com/us/cards/cm/theft01.htm

Columbia Credit Union

Security and Identity Theft

www.columbiacu.org/identity/identity_tips.html

Commerce Bank

Identity Theft and Fraud

www.commercebank.com/about/privacy/identity.asp

U.S. Bank

Online Security

www.usbank.com/cgi_w/cfm/about/online_security/index.cfm

Virginia Credit Union

Security and Identity Theft

www.vacu.org/education/security.asp

Wells Fargo

Identity Theft

www.wellsfargo.com/privacy_security/fraud/operate/idtheft

Health Care Industry

The health care industry also provides information specifically about “medical

identity theft,” which occurs when an unauthorized individual uses someone’s

personal information either to obtain medical treatment, prescription

medications, or other medical goods or to make false claims for medical

services. While this type of identity theft is detrimental to the victim’s

financial status, it also can result in the exhaustion of health insurance

coverage and the addition of false entries to the victim’s medical record,

incorrect medical treatment, or even the loss of a job if employers require

physical exams and medical history checks.30 Minneapolis-based health

system Allina Hospitals and Clinics, targeted by an identity theft ring,

produced a booklet to alert physicians and their staff on how to prevent

patient identity theft, and to provide tips for medical professionals to protect

themselves from becoming identity theft victims.
42

“Medical Identity Theft: the information crime that can kill you,” Dixon,

Pam. World Privacy Forum, Spring 2006.

www.worldprivacyforum.org/pdf/wpf_medicalidtheft2006.pdf

ECRI—Operating Room Risk Management, Healthcare Identity theft:

Prevention and Response. Mar. 2006.

www.ecri.org/MarketingDocs/0306news.pdf

Educational Institutions

For a variety of reasons, college students are frequent targets of identity

thieves. Colleges and universities store vast amounts of personal information

about students. According to one report, one-half to one-third of all

reported personal information breaches in 2006 occurred at colleges

and universities.31 The student lifestyle also may contribute to the high

rate of identity theft in this age group. College students tend to keep personal

information unguarded in shared dorm rooms. In recognition of the increased

vulnerability of the college population, many universities are providing

information to their students about the risks of identity theft through websites,

orientation campaigns, and seminars. The University of Michigan undertook

a wide-scale effort, launching Identity Web, a comprehensive

site based on the recommendations of a graduate class in the fall of 2003.32

The State University of New York’s Orange County Community College

offers identity theft seminars, the result of a student who fell victim to

a scam. A video at student orientation sessions at Drexel University in

Philadelphia warns students of the dangers of identity theft on social

networking sites. Bowling Green State University in Ohio emails campuswide “fraud alerts” when it suspects that a scam is being targeted to its

students. In recent years, more colleges and universities have hired chief

privacy officers, focusing greater attention on the harms that can result

from the misuse of students’ information.

The higher education community, including associations and financial

institutions, also has conducted outreach to financial aid counselors, students,

parents, and borrowers. For instance, the National Council of Higher Education

Loan Programs (NCHELP) reached out to its constituents and encouraged

them to take advantage of identity theft resources produced by the FTC and

share them with students. Many college bookstores now provide these

educational materials to students purchasing textbooks. The following links

provide examples of universities’ educational information on identity theft.

Harvard

www.hupd.harvard.edu/id_theft.php

Northwestern University

www.it.northwestern.edu/security/protectingprivacy/index.html

PART F
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COMBATING IDENTITY THEFT A Strategic Plan

Pennsylvania State University

consumerissues.cas.psu.edu/PDFs/CreditPrivacyIdentity.pdf

Tulane University

www.tuhscpd.tulane.edu/Safety/idtheft.htm

University of California—Los Angeles

www.ucpd.ucla.edu/ucpd/programs_persafe.html

University of Kansas

www.privacy.ku.edu/idtheft/

University of Michigan

identityweb.umich.edu/

University of Minnesota

safecomputing.umn.edu/safepractices/idtheft.html

University of Missouri—Kansas City

www.umkc.edu/adminfinance/police/tips/Identity.asp

University of Oklahoma

www.ou.edu/oupd/idtheft.htm

University of Utah

www.it.utah.edu/leadership/security/identity.html

Yale

www.yale.edu/security/goodmeasures/ProtectingYourIdentity.html
44

Since 2004, two major federal laws have imposed significant new requirements

relating to identification documents. First, the Intelligence Reform and

Terrorism Prevention Act (IRTPA) of 200433 improves identification

information security and requires a national strategy for combating

international terrorist travel. As part of this plan, the law contains provisions

for robust travel document screening and authentication and for improved

training for a variety of federal officials who come into contact with

fraudulent identification documents. The law also requires that part of the

strategic plan will be to disrupt terrorists’ production and use of false travel

documents. It also requires that the President lead international efforts to

provide for the detection of counterfeit or stolen foreign travel documents

and to criminally punish those involved in such crimes.

One section of the law focuses on biometrics. The law requires that biometric

identifier technology be studied, included in airport access controls, and

incorporated into a new, uniform law enforcement officer credential. The law

also requires that a plan be developed to accelerate the full implementation

of an automated biometric entry and exit system.

The law also focuses on improving identification documents, from requiring

that improved pilots’ licenses be developed to providing for the creation

of federal standards for birth certificates, drivers’ licenses, and personal

identification cards. The law included security enhancements for Social

Security cards, such as restricting the issuance of multiple replacement cards

and establishing minimum standards for verification of documents.

Additionally, the law prohibits the use of SSNs on drivers’ licenses.

In addition, the Real ID Act of 200534 supplements the requirements of state

drivers’ licenses and identification cards for use by federal agencies. The law

requires a number of verification measures before such an identification is

issued, including that the state verify the validity of supporting documents.

The law also mandates that identification cards used for federal purposes expire

every eight years and be produced in secure environments by personnel with

appropriate clearances. It further requires that state identification cards that

do not meet the federal security requirements state so on their face, and that all

states provide electronic access to other states of their motor vehicle databases.

Numerous government initiatives relating to authentication methods are

described at www.biometrics.gov.

PART G

RECENT LAWS RELATING TO IDENTIFICATION DOCUMENTS
45

COMBATING IDENTITY THEFT A Strategic Plan

All 50 states and the District of Columbia have some form of legislation that

prohibits identity theft, and in all of those jurisdictions, except for Maine,

identity theft can be a felony. In general, 11 states appear to use a narrower

approach to criminalizing identity theft by focusing on the use of personal

identifying information with intent to defraud. Other states use a broader

approach to criminalization that often includes not only unauthorized use,

but also possession, creation, recording, obtaining, selling, giving, or

transmitting of personally identifiable information.

State law concerning identity theft is changing rapidly. As one indication,

several states have amended their criminal identity theft provisions within the

last year. One of the trends has been to make criminal law more specific, for

example, making it a separate crime to traffic in stolen identities or to engage

in phishing.

Data from the 2005 National Survey of State Court Prosecutors indicate that

state and local prosecutors are actively engaged in prosecuting identity theft.

According to the survey, 69 percent of all prosecutors surveyed, and 97

percent of prosecutors surveyed from areas with populations of 1 million

or more, had litigated at least one computer-related identity theft case.

In addition, 80 percent of all prosecutors surveyed, and 91 percent of

prosecutors surveyed from areas with populations of 1 million or more,

had litigated a computer-related credit-card fraud case.35

These are just a few examples of state and local identity theft prosecutions:

The Arizona Attorney General announced the arrest of a Phoenix

resident, on suspicion of using Green Bay Packers quarterback Brett

Favre’s credit card more than 40 times. The defendant was charged with

four felony charges and two other men were charged with forgery. The

unauthorized charges to the credit card totaled more than $10,000, and

the use of Favre’s card is suspected to be part of a large identity theft

scheme run by the other two men.

The Florida Attorney General announced that two defendants pleaded

guilty to identity theft for manufacturing counterfeit Florida drivers’

licenses and checks in names that belonged to real and fictitious

individuals.

The Michigan Attorney General filed charges against two former

nursing home employees who allegedly obtained a resident’s personal

information and used the information to obtain a Comcast account.

PART H

STATE CRIMINAL LAW ENFORCEMENT EFFORTS
46

The Missouri Attorney General and the Jefferson County Prosecuting

Attorney charged an individual with two counts of identity theft. The

defendant allegedly stole the identities of Missourians online to purchase

and obtain thousands of dollars worth of merchandise and gift cards.

The New York Attorney General announced the indictment of an

individual for his role in an identity theft scheme that defrauded

financial institutions of more than $1.5 million. The defendant allegedly

obtained the personal identifying information of two Staten Island

residents and, using their home as collateral, applied for and obtained

home equity loans and lines of credit.

PART H
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COMBATING IDENTITY THEFT A Strategic Plan

The United States Sentencing Commission has treated the problem of identity

theft seriously. Among other things, the Sentencing Commission implemented

a two-part sentencing guideline amendment in response to the Identity Theft

Penalty Enhancement Act of 2004.36 First, the Sentencing Commission

promulgated a new guideline at Guidelines Section 2B1.6 for aggravated

identity theft, effective November 1, 2005. The guideline provides that

offenders convicted under the aggravated identity theft statute are to be

sentenced to the term required by statute. In Fiscal Years 2005 and 2006, the

Sentencing Commission received 55 and 163 cases respectively, with at least

one conviction under the aggravated identity theft statute.37 The aggravated

identity theft cases in Fiscal Years 2005 and 2006 had average sentences

imposed of 33 and 44 months, respectively.38

Second, the Sentencing Commission expanded the applicability of a Sentencing

Guidelines provision that is aimed at enhancing the sentences of those

defendants who abuse a position of trust or use a special skill to commit the

crime. Specifically, the Sentencing Commission expanded the enhancement

to apply to any defendant who “. . . exceeds or abuses the authority of his or

her position in order to obtain unlawfully, or use without authority, any means

of identification.”39 In Fiscal Year 2006, 0.6 percent of 18 U.S.C. § 1028(a)(7)

offenders received offense level increases under this provision.

The U.S. Sentencing Commission maintains a comprehensive, computerized

data collection system that forms the basis for its clearinghouse of federal

sentencing information. Sentencing Commission data show that more than

1,000 offenders have been sentenced for convictions under the identity theft

statute, 18 U.S.C. § 1028(a)(7), since it was enacted in October 1998. There

has been a substantial increase in the number of sentenced cases with at least

one count of conviction under 18 U.S.C. § 1028(a)(7) each year, from 12 cases

in Fiscal Year 1999 to 195 cases in Fiscal Year 2006. Average sentences for

these identity theft cases have increased steadily from an average of 16 months

of confinement in Fiscal Year 1999 to an average of 25 months of

confinement in Fiscal Year 2006.40

PART I

SENTENCING IN FEDERAL IDENTITY THEFT PROSECUTIONS
48

The following are some examples of identity theft cases prosecuted by DOJ

in which federal courts have imposed substantial terms of imprisonment:

On May 12, 2006, the U.S. District Court for the Western District of

Missouri sentenced a man to 10 years imprisonment and ordered him

to pay $126,180 in restitution, for participating in an identity theft-related

wire fraud conspiracy that involved more than 50 victims in 17 states.

The conspiracy involved stealing the identities of victims and using their

credit card information to receive money wired by Western Union. Both

the defendant and a codefendant targeted Citibank credit card holders

and Western Union agents. When targeting individual card holders, the

defendant would call Western Union, posing as the credit card holder,

and request a money transfer. Prior to making this call, he used his

extensive knowledge of how the telecommunications network operated

to have the victim’s home telephone line forwarded to a location where

he could pose as the victim card holder when Western Union called back

to verify the wire transfer. When targeting businesses that served as

Western Union agents, the defendant would call Western Union posing

as an employee of a Western Union agent, to initiate a fraudulent and

fictitious wire transfer that would be picked up by either of the defendants.

To facilitate the scheme, the defendant sometimes posed as a “fraud

early warning” employee of the Citibank credit card company in order

to obtain information on true Citibank credit card holders.41

In December 2004, three defendants were sentenced for installing a

computer program on the nationwide computer system used by Lowe’s

in order to steal credit card account numbers. To carry out this scheme,

the defendants secretly compromised the wireless network at a Lowe’s

retail store in Southfield, Michigan, and thereby gained unauthorized

access to Lowe’s Companies, Inc.’s central computer system in North

Wilkesboro, North Carolina and, ultimately, to computer systems

located in Lowe’s retail stores around the United States. Having gained

this unauthorized access, the defendants then installed a computer

program on the computer system of several Lowe’s retail stores, which

was designed to capture the credit card information of customers

conducting transactions with those stores. The lead defendant in the case

received a sentence of 108 months imprisonment.

On June 23, 2006, in the U.S. District Court for the Eastern District

of Missouri, the leader and organizer of an identity theft ring and her

two daughters were sentenced (respectively) to 70 months imprisonment;

2 years and 1 day imprisonment; and 4 years probation (with home

confinement) on aggravated identity theft, identity theft, and related

fraud charges, in a scheme to use stolen identities to open credit

accounts and purchase merchandise. Some of the documents seized

during the investigation came from patient records through one

daughter’s employment at a St. Louis area dental office. The entire

PART I
49

COMBATING IDENTITY THEFT A Strategic Plan

scheme resulted in losses exceeding $47,000 as a result of more than

252 fraudulent credit applications. More than 67 individuals had their

identities compromised as a result of the fraud.

In October 2004, the Secret Service arrested 21 individuals on charges

relating to their involvement in “Shadowcrew.” “Shadowcrew” was

an international criminal organization with numerous members that

promoted and facilitated various criminal activities including the

electronic theft of personal identifying information, credit-card and

debit-card fraud, and the production and sale of false identification

documents. The organization operated a website with approximately

4,000 members that was dedicated to facilitating malicious computer

hacking and disseminating stolen credit card, debit card, and bank

account numbers, and counterfeit identification documents, such

as driver’s licenses, passports, and Social Security cards. In July 2006,

one of the participants in Shadowcrew was sentenced to 90 months

imprisonment.42

In December 2005, a California man convicted of orchestrating a creditcard fraud scheme that involved skimming was sentenced to 87 months

imprisonment and ordered to pay $140,000 in restitution to more than

50 identified victims of his scheme. In this case, which the Secret Service

investigated, the defendant employed a waitress who worked at two

restaurants to use a “skimmer” device and other means to obtain creditcard information. When federal agents searched the defendant’s home,

they found more than 1,500 stolen credit-card account numbers and

software and hardware to download the account information on to blank

credit card stock.43

The IRS has pursued a number of identity theft prosecutions. For Fiscal

Year 2005, in 25 identity theft cases where defendants were convicted

and sentenced, the average prison sentence imposed was 41 months.

For Fiscal Year 2006 (through June 30, 2006), 18 persons were convicted

and sentenced in cases involving identity theft, and the average prison

sentence received was 38 months.
50

PART J

INVESTIGATIVE APPROACHES TO IDENTITY THEFT: Special Enforcement and

Prosecution Initiatives

Each agency responsible for the investigation of identity theft tracks its

identity theft cases independently. By any measure, however, it is clear that

the federal investigative agencies have been aggressively pursuing identity

theft. The FBI reports that as of September 30, 2006, it had 1,274 pending

identity theft-related cases, and that it opened 493 identity theft-related cases

in Fiscal Year 2006. The USPIS reports that it opened 1,269 identity theft

cases and made 1,647 arrests in Fiscal Year 2006. The USSS reports that

it made 3,402 identity theft arrests in Fiscal Year 2006. The Social Security

Administration (SSA) Office of the Inspector General’s (OIG) Office of

Investigations reports that it opened 1,482 cases involving SSN misuse44 in

Fiscal Year 2006, and 412 cases involving SSN misuse from October 1, 2006

through January 31, 2007 in FY 2007.

Special Enforcement Initiatives

Many agencies involved in the investigation of identity theft have also

undertaken special enforcement initiatives in recent years, including

the following:

FBI

The FBI Cyber Division has conducted a number of investigative initiatives

into various types of online crime that involve identity theft:

Operation “Retailers & Law Enforcement Against Fraud” 

(RELEAF): RELEAF is an international investigative initiative directed

at the related problems of “reshipping” (i.e., the use of one or more

people to receive merchandise that criminals have fraudulently ordered

from retailers, often using others’ credit cards, and ship that merchandise

to other participants in the fraud scheme to evade detection by retailers

and law enforcement) and money laundering. This initiative involves

more than 100 private sector participants and numerous law enforcement

agencies and has produced more than 150 investigations.

Digital Phishnet: Digital Phishnet is a phishing and identity theft

initiative involving more than 60 organizations (banks, ISPs, and

ecommerce companies) that assisted in the development of more

than 100 investigations.

Operation Slam Spam: Operation Slam Spam is a criminal spam and

malicious code investigative initiative that is supported daily by more

than 20 small and medium enterprises. An anti-spam email list provided

intelligence on current cyber crimes, which involved over 95 industry

members. In addition, 12 industries provided analysts who are co-
51

COMBATING IDENTITY THEFT A Strategic Plan

located with the Internet Crime Complaint Center (IC3) and Cyber

Initiative and Resource Fusion Unit (CIRFU) to support this project,

which resulted in more than 100 investigations.

In addition, as identity theft becomes more global in scope and impact, the

FBI has provided some foreign law enforcement agencies with identity theftrelated assistance and training in the execution of specific enforcement

initiatives. Initial efforts in this context have already proved highly productive,

and include the following:

The FBI Legal Attaché in Bucharest contributed to the development and

launching of www.efrauda.ro, a Romanian government website for the

collection of fraud complaints based on the IC3 model. The IC3 also

provided this Legal Attaché with complaints received by U.S. victims

who were targets of a Romanian Internet crime ring. The complaint

forms provided to Romanian authorities via the Legal Attaché assisted the

Romanian police and Ministry of Justice to prosecute Romanian subjects.

Following up on the success of IC3’s Operation RELEAF, IC3 and FBI

Cyber Units developed and presented a “Cyber 101” course to law

enforcement officials in Ghana and Nigeria. This course had immediate

results, in the form of aggressive foreign law enforcement action to

support FBI investigations, including the seizure of millions of dollars

in stolen merchandise and fraudulent cashier’s checks.

United States Secret Service

The USSS has approximately 15 online undercover investigations targeting

suspects who are trafficking in government-issued documents (driver’s

licenses, Social Security cards, U.S. and foreign passports and visas). These

suspects reside both within the United States and abroad. In the next year,

the Secret Service intends to continue its undercover operations targeting

these groups, increase its arrests of these suspects, and disrupt the online

sale and distribution of stolen personal and financial information.

Internal Revenue Service—Criminal Investigation

IRS CI’s Questionable Refund Program (QRP) and Return Preparer Program

(RPP) are focused on identifying and stopping fraudulent tax refund claims

schemes. These schemes often involve hundreds of returns, with refunds

totaling hundreds of thousands or even millions of dollars of revenue at stake.

These schemes can create significant problems for legitimate taxpayers by

denying them refunds to which they would be entitled. Investigating and

prosecuting those responsible for these ambitious schemes ranks among these

programs’ highest priorities. Although identity theft is not a component of all

fraudulent refund schemes, the rise of identity theft has helped fuel an increase

in fraudulent refund schemes and other tax frauds, specifically employment

tax fraud. In Fiscal Year 2006, IRS-CI had 77 cases involving identity theft

under active investigation. The IRS is also developing improved screening and

detection processes to more effectively identify future fraudulent refund schemes.
52

Treasury Inspector General for Tax Administration

TIGTA’s role in combating identity theft is protecting the privacy and security

of confidential taxpayer data entrusted to the IRS. The integrity of IRS’s

information systems is fundamental to federal tax administration. A breach

of IRS computer databases leading to identity theft would be devastating to

the nation’s voluntary tax system and the government’s ability to collect taxes.

TIGTA’s Strategic Enforcement Division (SED) utilizes both proactive and

reactive investigative methods to detect and deter unauthorized accesses

(UNAX) to taxpayer information by IRS employees and by those who try

to hack into IRS computer databases. SED administers a variety of audit trail

and computer matching tools to proactively identify UNAX violations that

could lead to identity theft. TIGTA’s System Intrusion Network Attack

Response Team (SINART) was formed to detect and investigate intrusions

into IRS systems and information technology equipment. In fiscal year 2006,

TIGTA initiated 488 investigations into suspected UNAX violations, and its

investigations in fiscal year 2006 resulted in 385 referrals to DOJ for criminal

prosecution and 409 administrative disciplinary actions.

Department of State—Bureau of Diplomatic Security

Since 2005, the State Department’s Bureau of Diplomatic Security (DS)

has been working on an initiative to address the use of identities of deceased

people to obtain U.S. passports. As part of this initiative, some of the DS field

offices have had several arrests and successful prosecutions, including some

asset forfeiture cases. Some of these investigations resulted in the arrests of

fugitives who had assumed the identities of others many years earlier to flee

justice. DS plans to expand this initiative to all of its field offices.

One example of the value of this initiative involves the prosecution of

Christopher J. Clarkson. On March 15, 2006, Clarkson pleaded guilty in

Florida to bank fraud and was required to forfeit $500,000 in assets. Clarkson

was a member of a widely known gang of bank robbers who reportedly

robbed more than 100 banks and armored cars in the 1970s and 1980s in both

Canada and the United States. For nearly 30 years, Clarkson used the identity

of Stephen Duffy, a boy who lived in California and died there at age 4 in

1948. Using Duffy’s identity, which he apparently had stolen in the late 1970s,

Clarkson lived in Hollywood, Florida, and worked as a successful real estate

broker. DS investigators found irregularities in “Duffy’s” California driver’s

license because of the year of the true Duffy’s death. Further investigation,

including the discovery that Clarkson had applied for a passport in Duffy’s

name, led DS agents and Florida law enforcement to arrest Clarkson in

October 2005.	

Special Prosecution Initiatives

Since 2002, DOJ has conducted a number of enforcement initiatives targeting

identity theft. The first of these initiatives, in May 2002, involved 73 criminal

prosecutions by United States Attorney’s Offices against 135 individuals in 24

PART J
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COMBATING IDENTITY THEFT A Strategic Plan

districts. The cases in that initiative covered a broad range of fraud schemes

such as mortgage fraud and securities fraud. Since then, identity theft has

played an integral part in several initiatives that DOJ and other agencies have

directed at online economic crime. For example, “Operation Cyber Sweep,”

a November 2003 initiative on Internet-related economic crime, resulted

in the arrest or conviction of more than 125 individuals and the return of

indictments against more than 70 people involved in various types of Internetrelated fraud and economic crime. The cases in Cyber Sweep included

phishing schemes and other efforts to use stolen credit cards to buy computer

equipment online.45

In addition to these general enforcement initiatives, various United States

Attorney’s Offices have established their own identity theft initiatives:

“Fast Track” Program. The District of Oregon has an identity theft

fast track program that requires eligible defendants both to plead guilty

to aggravated identity theft under 18 U.S.C. § 1028A(a)(1) and to agree,

without litigation, to a 24 month minimum mandatory sentence. In

exchange for their pleas of guilty, defendants are not charged with the

predicate offense which would otherwise result in a consecutive sentence

under the United States Sentencing Guidelines. The program is intended

to capture cases that are smaller than the typical federal identity theft

cases, but larger than typical state-level cases. Generally, in order for

a defendant to be eligible for the program, the actual or intended loss,

whichever is higher, must be more than $5,000 and less than $70,000.

If the loss is less than $5,000, the defendant must be a manufacturer

of fraudulent identification documents or the defendant’s criminal

activity must create a disproportionately adverse impact in the

community. The offense must have 10 or more victims, but less than

50 victims, from multiple jurisdictions. Finally, there must be no

applicable organizer, leader, manager, or supervisor adjustments under

section 3B1.1 of the federal Sentencing Guidelines. The program relies

upon a network of local investigators and prosecutors to identify eligible

defendants, referring them to agents of the FBI, USSS, and the USPIS

for follow-up work, and ultimately to designated Assistant U.S.

Attorneys for federal prosecution.

“Operation Checkmate.” Two United States Attorney’s Offices have

collaborated on a special initiative to combat passport fraud, known

as Operation Checkmate. Because approximately one-quarter of the

8.8 million passports issued by the State Department in 2004 were issued

at the National Passport Center in Portsmouth, New Hampshire, the

United States Attorney’s Office for the District of New Hampshire

initiated Operation Checkmate in collaboration with the State

Department’s Bureau of Diplomatic Security, ICE, and SSA OIG.

Operation Checkmate aims to deter passport fraud by improving fraud

detection efforts and dedicating resources to prosecuting these crimes.
54

Most evidence and witnesses are located where the fraudulent passport

applications are detected by State Department passport adjudicators.

Districts that are home to adjudication centers therefore are logical

choices for prosecuting passport fraud cases, in addition to the districts

where the perpetrators temporarily, and often illegally, reside. For these

reasons, the United States Attorney’s Offices in New Hampshire and

South Carolina, where the largest passport centers are located, agreed

to supply the additional prosecutorial resources necessary to support

increased enforcement efforts.

PART J
55

COMBATING IDENTITY THEFT A Strategic Plan

With the increased attention given to identity theft in recent years, federal law

enforcement agencies have recognized the importance of the timely receipt,

analysis, and referral of identity theft information, including complaints by

identity theft victims. Currently, there are many different sources of identity

theft data, and several different ways in which that data is being analyzed.	

The General Public As a Source of Information

Identity Theft Data Clearinghouse (FTC)

The Identity Theft and Assumption Deterrence Act of 1998 directed the FTC

to develop the federal government’s centralized education and assistance

program. Now, the FTC provides a federal “one-stop shop” for consumers

and victims.

As a result, a wide variety of entities refer consumers to the FTC through

its identity theft website and toll-free help line. The credit reporting agencies,

credit card issuers, financial institutions, several federal agencies, several

states’ Attorneys General, and numerous local law enforcement agencies

all refer consumers to the FTC. In 2006, the FTC recorded more than 4.2

million visits to its Identity Theft website (www.ftc.gov/idtheft) and more than

590,000 visits to the web version of its victim recovery guide, Take Charge: 

Fighting Back Against Identity Theft, as well as 113,000 visits to its Spanishlanguage website (www.consumer.gov/idthet/espanol.htm), and 55,000 visits to

the Spanish-language version of its victim recovery guide.

The number of identity theft victims filing complaints with the FTC is

similarly substantial. In 2006, the FTC logged in 246,035 new identity theft

complaints. The complaints are promptly added to the Clearinghouse, which

currently contains more than one million consumer complaints. Analysts

from the FBI and the USPIS routinely work on site at the FTC to mine

the Clearinghouse data to identify new leads or expand upon existing leads.

The FTC also provides remote access to the Clearinghouse data, and actively

encourages law enforcement at all levels to use its complaints for their

investigations and analysis. Local, state, and federal law enforcement officers

can remotely access the Clearinghouse by a secure online connection. Officers

and agents can query the data to identify significant clusters, leading to

suspected perpetrators and targets, as well as to detect patterns and trends

for further investigation. In addition, users can set the Clearinghouse’s

“Autoquery” program to notify them any time new data is entered that

matches their specified parameters. The Clearinghouse also has a

deconfliction tool: the officer can place an “Alert” on information relating

to their investigations to notify other users that the officer is working with

this information and would like to be contacted.

PART K

HOW LAW ENFORCEMENT OBTAINS AND ANALYZES IDENTITY THEFT DATA
56

The FTC continues to work to simplify the victim’s recovery process. One

example is the Identity Theft Affidavit, which is posted on its website. The

Identity Theft Affidavit was the result of the FTC working with industry and

consumer advocates to create a standard form for victims to use in disputing

identity theft accounts. Since its inception in 2001, more than 1.5 million hits

to the English version and more than 62,000 hits to the Spanish version have

been recorded.

Internet Crime Complaint Center (IC3) (FBI/National White Collar 

Crime Center) and Cyber Initiative and Resource Fusion Unit (CIRFU)

Another conduit for complaints about internet-related fraud and identity theft

is the IC3. IC3 is a joint venture between the FBI and the National White

Collar Crime Center (a nonprofit organization, funded by the DOJ’s BJA,

that, among other things, disseminates information on cybercrime and

actionable cyber-related investigative leads to state and local law enforcement).

The IC3 provides an important means of collecting, analyzing, and

disseminating to law enforcement information about crimes committed over

the Internet. The IC3 receives more than 20,000 complaints per month from

Internet users. For Internet victims, the IC3 provides a convenient and easy

means of alerting authorities to a suspected criminal violation, including

online identity theft. For law enforcement and regulatory agencies, it offers

a central repository for complaints related to Internet crimes and allows them

to use the information to obtain timely statistical data and current crime trends.

A special component of the FBI that works closely with the IC3 is the

CIRFU. The CIRFU, based in Pittsburgh, is housed within the National

Cyber Forensic Training Alliance (NCFTA), a public/private alliance and

fusion center. The CIRFU and NCFTA maximize intelligence development

and analytical capabilities by combining resources from law enforcement with

those of critical industry partners. Such resources are utilized to substantially

enhance the development and support of joint initiatives aimed at new and/

or high-profile cybercrime problems. It also fosters the development of public/

private alliances and joint training in support of these investigative initiatives.	

Other Government Agencies

Other federal law enforcement agencies also have processes to receive

and analyze complaints from the public. For example, the USPIS uses the

Financial Crimes Database (FCD), a web-based national database that is

available to all inspectors for use in analyzing mail theft and identity theft

complaints received from various sources, including, but not limited to, the

financial industry (American Express, Discover, MasterCard, Visa); major

mailers (Netflix, Blockbuster, GameFly); the Identity Theft Assistance

Center (ITAC) complaints; on-line mail theft complaints, USPIS field offices,

Corporate Customer Contact (1-800-ASK-USPS) telephone complaints; and

U.S. Treasury Checks. The USPIS receives approximately 1,000 identity theft

complaints per month that are entered into the FCD. Additionally, the SEC’s

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COMBATING IDENTITY THEFT A Strategic Plan

Enforcement Complaint Center receives approximately 5,000 to 7,000

complaints per day on all types of securities law violations, including those

that involve account intrusion and identity theft.

When HHS receives complaints that involve allegations of telemarketing

fraud and misuse of Part D beneficiaries’ personal information for

unauthorized bank transactions, it refers many of them to the FBI because

the HHS OIG does not have primary jurisdiction over the identity theft

offense (18 U.S.C. § 1028) or the wire fraud offense (18 U.S.C. § 1343).

Even though beneficiaries may voluntarily disclose their personal information

in connection with a transaction they believe they are authorizing, any

unauthorized and fraudulent use by the telemarketers of the beneficiaries’

information may constitute identity theft. HHS also refers to the Criminal

Division of DOJ and to the FBI complaints that raise the possibility

of identity theft from sources other than Medicare or its other payment

programs. These complaints are received by HHS pursuant to its

administrative enforcement of the HIPAA Privacy and Security Rules.

Public and Private Sector Collaborations

To improve information sharing and cooperation between law enforcement

and private sector entities on online identity theft and fraud matters, IC3 and

CIRFU representatives have been meeting with representatives from a number

of industry coalitions combating online fraud, including: the Merchants Risk

Council, the Business Software Alliance, as well as numerous financial

services and other e-commerce stake holders, regarding co-location of

analysts at both locations. Target Corporation (which in addition to being

a merchant is also a bank and credit card issuer) and the USPIS have assigned

full-time fraud investigators to work at both IC3 and/or CIRFU, with eBay

and other organizations agreeing to rotate personnel through IC3 and/or

CIRFU. Other law enforcement agencies have been invited to place personnel

in both locations to further enhance cooperation among such agencies.

The Secret Service hosts a portal called the e-Information system for members

of the law enforcement and banking communities. This system provides

a forum for members to post the latest information on scams, counterfeit

checks, frauds and swindles, and updated Bank Identification Numbers

(BINs). It is widely used and receives a tremendous amount of positive

comments from users.

In 2005, the USPIS created the Intelligence Sharing Initiative (ISI), a website

that allows the Inspection Service and fraud investigators representing retail

and financial institutions, as well as major mailers, to openly share

information pertaining to mail theft, identity theft, financial crimes,

investigations, and prevention methods. ISI interacts with the Financial

Crimes Database and generates Alert Reports. These reports are posted to

assist the industry in identifying “high risk” areas, closing suspect accounts,

and saving thousands of dollars in potential fraud.
58

ISI also gives the users access to the “Hot Addresses List,” i.e., a list of

addresses located throughout the United States and Canada linked to a variety

of fraud schemes, including fraudulent application schemes, account takeover

schemes, mail order schemes, and reshipping schemes. The “Hot Addresses

List” is published monthly and distributed by postal inspectors to the retail

and financial industry, federal law enforcement, and government agencies

and is also posted on the FTC’s Identity Theft Data Clearinghouse for law

enforcement use. This intelligence sharing has resulted in a reduction in fraud

schemes and significant savings to the retail and financial industries.

Private Sector As a Source of Information

Financial Services Industry

The financial services industry is an important source of identity theft data

for law enforcement agencies. The financial services industry provides that

information in a number of different ways, some of which are detailed below.

Suspicious Activity Reports

A significant source of identity theft information is already available to federal

law enforcement through Suspicious Activity Reports (SARs). In general,

a federally regulated financial institution is required to file SARs with the

Department of the Treasury’s FinCEN for certain suspected violations

of the law, including identity theft, and for suspicious transactions involving

funds or assets of at least $5,000 (e.g., transactions that involve potential

money laundering or Bank Secrecy Act violations).

To make more effective use of SAR data, the FBI has begun a SAR

Exploitation Project. The Project is designed to identify financial patterns

and criminal groups associated with identity theft, financial institution fraud,

and other aberrant financial activities. Using SAR data from FinCEN, the

Project analyzes financial information that is available but not readily

exploitable for FBI investigators to generate leads for the field investigators.

Analytical software enables analysts to visualize financial patterns, link

discrete criminal activities, and display the activities on link charts. Leads

developed from analysis of SAR activity may be instrumental in “connecting

the dots” for cross-program investigations of criminal, terrorist and intelligence

networks, all of which rely on financial transactions to operate. The Secret

Service is also using SAR data to investigate identity theft crimes.

Identity Theft Assistance Center (ITAC)

The ITAC is a nationwide cooperative initiative of the financial services

industry that provides a free victim assistance service for customers

of member companies. ITAC is run by the Identity Theft Assistance

Corporation, a not-for-profit membership corporation sponsored by two other

private-sector organizations, The Financial Services Roundtable and BITS.

Currently, 48 financial services industry companies participate in ITAC. ITAC

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COMBATING IDENTITY THEFT A Strategic Plan

helps victims of identity theft by facilitating the recovery process. First, the

identity theft victim and the ITAC member company resolve any issues at that

company. An ITAC counselor walks the consumer through his or her credit

report to find suspicious activity, notifies the affected creditors, and places

fraud alerts with the credit bureaus. In addition, ITAC shares information

with law enforcement and the FTC to help catch and convict the criminals

responsible for identity theft. Since opening its doors in August 2004, ITAC

has helped approximately 13,000 consumers restore their financial identities.

ITAC has data sharing agreements with the USPIS and the FTC under which

it provides those agencies, on a weekly basis, with information about victims

and the circumstances of their identity theft incidents. The USPIS has loaded

information into its Financial Crime Database, and the FTC adds the ITAC

data to its Identity Theft Data Clearinghouse.46

Credit Reporting Agencies

Section 621(f)(3) of the Fair Credit Reporting Act (FCRA) requires that the

nationwide consumer reporting agencies (CRAs) submit an annual summary

report to the FTC “on consumer complaints received by the agency on identity

theft or fraud alerts.” The three nationwide CRAs—Experian, Equifax, and

TransUnion—have recently submitted their first set of annual reports to the

Commission covering the 13-month period from December 1, 2004, the

effective date of the FACT Act provision, through December 31, 2005. Review

of the data by FTC staff is underway. Section 621(f)(3) of the FCRA does not

require the FTC to report on the data submitted to it by the CRAs.

The first set of reports includes five categories of information: (1) the number

of initial fraud alerts placed; (2) the number of extended fraud alerts placed;

(3) the number of active duty alerts placed; (4) the number of inaccurate trade

lines or items blocked from consumers’ credit reports as a result of the

consumer providing an “Identity Theft Report”; and (5) the number of

accounts or items disputed as inaccurate as a result of identity theft or fraud.

Reports of Database Intrusions Mandated by Federal and State Law

Another potential source of reports on identity theft are reports that various

state laws mandate for database intrusions. In addition, under federal securities

and financial reporting laws, such as the Sarbanes-Oxley Act of 2002, publicly

traded companies may be obligated to report any known instances of breaches,

intrusions, or compromises of personal data that they control. As an example

of how a similar regulatory regime may operate in other countries, in January

2006, the corporate owner of the Bahamian hotel resort Atlantis filed a

document with the Bahamas SEC, reporting that data on approximately

55,000 customers of Atlantis were missing from Atlantis’s computer database.

The data, which included names, addresses, credit card and bank account

information, SSNs, and driver’s license numbers, were reportedly obtained by

a hacker.47
60

Federal law enforcement agencies have been supportive of the need to involve

state and local law enforcement and the private sector in combating identity

theft. The FBI, the USSS, the USPIS, and ICE, for example, all conduct

outreach to and work with state and local law enforcement agencies on

identity-theft matters, whether through interagency task forces or direct

contacts from field offices. Additionally, several agencies have partnered

with private sector entities to do outreach to consumers and others. Those

efforts include the following:

“Operation: Identity Crisis.” In 2003, the USPIS partnered with

the FTC and the USSS (with support from various other agencies)

to educate American consumers about the ease with which identity

theft occurs and how to prevent it. A multi-media effort included

advertisements in 17 newspapers; a 3 million piece educational mailing;

public service announcements; posters displayed in 38,000 Post Office

lobbies as well as in lobbies of police departments, banks, and other

financial institutions throughout the country; and release of a USPIS

prevention DVD entitled “Identity Crisis.”

“Operation Identity Shield.” In 2005, the FBI, the USPIS, IC3,

the National White Collar Crime Center, the FTC, Merchants’ Risk

Council, Monster.com, and Target began an initiative to educate

U.S. consumers about how to protect themselves and their personal

information from the reach of online scam artists. A multi-media effort

included the release of a free USPIS prevention DVD, “Web of Deceit,”

to update and inform consumers about new and evolving identity theft

schemes that they may encounter; a posting of a joint law enforcement/

industry website, www.LooksTooGoodToBeTrue.com, to provide

educational and prevention information; magazine ads with a combined

circulation of over 22 million; newspaper and radio spots; banner ads

on each magazine’s website with links to the USPIS website; message

inserts in stamp fulfillment orders; and a full-page ad placed in the

October issue of the Police Chief magazine. This initiative also allows

consumers to provide law enforcement authorities with valuable

intelligence to assist in combating the problem.

Identity Theft Enterprise Strategy. The IRS Identity Theft Program

Office has adopted the Identity Theft Enterprise Strategy as a

comprehensive approach to combating identity theft by focusing

on outreach, prevention, and victim assistance. The outreach

component seeks to alert and inform tax professionals, taxpayers,

and other interested parties of the threat that identity theft poses to tax

administration. The prevention component’s objective is to proactively

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FEDERAL LAW ENFORCEMENT OUTREACH EFFORTS
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COMBATING IDENTITY THEFT A Strategic Plan

address identity theft within the context of tax administration. An

example of these activities is the IRS’s efforts to identify and deter

“phishing” schemes before taxpayers are victimized. The third

component of the strategy is victim assistance, the important task

of mitigating and correcting the harm suffered by taxpayers who

are victims of identity theft.

To address identity theft relating to health care, HHS Centers for

Medicare and Medicaid Services (CMS) uses Consumer Alerts, press

releases, speeches to beneficiary, provider, and health care industry

associations, and cable television programs to educate the beneficiary

and provider communities and alert them to emerging problems. CMS

Alerts publicize the telephone number for victims to call to report

Medicare scams (1-800-HHS-TIPS) and prescription drug fraud

(1-877-7SAFERX or 1-877-772-3379), and contain specific tips for

people with Medicare to protect themselves against scams. CMS also

issues reminders to its contractors, providers, and beneficiaries, similar

to internal departmental reminders to HHS employees, to inform them

of their responsibility to protect private information and of actions they

should take to keep data secure. CMS recently issued prescription drug

compliance guidance similar to that previously issued by HHS OIG for

other health care providers (e.g., hospitals, nursing homes, home health

agencies, physicians in private practice, laboratories, and durable medical

equipment suppliers) that includes safeguarding of beneficiary and

provider information. Finally, CMS staff speak at national and local

provider, beneficiary, and prescription drug plan associations and

partner with the U.S. Administration on Aging, Area Agencies

on Aging, and community outreach agencies to spread the word

about scams and how to report complaints. CMS regularly participates

in conferences sponsored by the National Health Care Anti-Fraud

Association with federal, public, and private sector representatives

involved in health care fraud and abuse.

In addition, federal law enforcement agencies have frequently established

direct lines of communications on fraud and identity theft issues with

various companies and financial institutions in various cities throughout

the United States:

The FBI, for example, has established Infragard, a national information

sharing network between the FBI, an association of businesses, academic

institutions, state and local law enforcement agencies, and other

participants dedicated to increasing the security of United States

infrastructures. Infragard has more than 11,800 members in 79 chapters

throughout the United States. Infragard’s goals, at both the national and

local levels, include increasing the level of information and reporting

between InfraGard members and the FBI on matters related to

counterterrorism, cybercrime, and other major crime programs,
62

and increasing interaction and information sharing among InfraGard

members and the FBI regarding threats to the critical infrastructures,

vulnerabilities, and interdependencies.

U.S. Immigration and Customs Enforcement (ICE) conducts outreach

programs to employers to provide them with training in identifying

fraudulent documents.

One of the most productive approaches that the public and commercial

sectors have been using to deal with identity theft and identity fraud issues

is the creation of multi-sectoral working groups, organized by private

companies, that provide a common forum for discussion of technological

and other solutions to identity fraud with each other and with government

agencies. The following descriptions of two multi-sectoral working groups

interested in identity theft indicate the types of approaches that such groups

can develop to address various aspects of identity fraud:

Anti-Phishing Working Group. The APWG is an industry association

focused on eliminating the identity theft and fraud that result from the

growing problem of phishing and email spoofing. The APWG has more

than 2,300 members and more than 1,500 companies and government

agencies participating in the APWG’s activities. It provides a forum

to discuss phishing issues, define the scope of the phishing problem

in terms of hard and soft costs, and share information and best practices

for eliminating the problem. Where appropriate, the APWG will also

look to share this information with law enforcement. Membership is

open to qualified financial institutions, online retailers, ISPs, the law

enforcement community, and solutions providers. Certain members

of the APWG have worked closely with federal law enforcement on

other initiatives, such as Digital Phishnet.

Liberty Alliance. Formed in September 2001, the Liberty Alliance

is a global consortium of more than 150 leading merchants, service

providers, technology vendors, and government organizations that

work together to address the technical and business issues associated

with developing an open standard for federated network identity.

The Alliance is engaged in the ongoing release of open technical

specifications as well as business and policy guidelines to help

companies deploy federated identity services across a broad range

of products, services, and devices.48 Recently, the Alliance has held

workshops on identity theft prevention in Chicago, Illinois, and Tysons

Corner, Virginia. These workshops brought together law enforcement

and private sector representatives to explore potential technological

and procedural solutions to the problem of identity fraud.

Other groups and initiatives that facilitate productive discussions between law

enforcement and the private sector include:

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COMBATING IDENTITY THEFT A Strategic Plan

International Association of Financial Crimes Investigators.

The International Association of Financial Crimes Investigators (IAFCI)

is a non-profit international organization that engages in training and

information-sharing about financial fraud, fraud investigation, and fraud

prevention methods. Its members are drawn from law enforcement, the

banking and credit-card sectors, and other companies. IAFCI members

have access to the IAFCI Network, a secure international electronic

fraud information network that allows them to broadcast warnings

to all participating members and request investigative assistance;

a complete International Membership Directory listing invaluable

investigative contacts worldwide; quarterly newsletters that alert IAFCI

members to the latest schemes of fraud criminals; and the IAFCI

International Annual Training Seminar, where members can learn a

variety of fraud prevention techniques, as well as the latest technological

advances and in-the-field instructions to stop fraud.

Financial Industry Mail Security Initiative. In 1992, the USPIS

started a Credit Card Mail Security Initiative (CCMSI) in an effort

to work more effectively with the credit card industry. A coordinated

crime prevention effort was needed to reduce fraud losses and allow

law enforcement to concentrate investigative attention on organized

criminals. Results were immediate; non-receipt fraud losses were

reduced 35 percent in 1993 when compared with 1992. This reduction

in loss trend has continued into 2006. In 2003, the USPIS broadened

the scope of the meetings and included other significant trends that were

taking place, such as counterfeit check schemes, internet fraud, and bank

fraud schemes. Since the focus expanded, the name of the group was

changed from the Credit Card Mail Security Initiative to the Financial

Industry Mail Security Initiative (FIMSI). This group meets three times

annually and provides a forum in which agency representatives can

identify and share trend data. Representatives from the retail/financial

industry, and federal, state, and local law enforcement agencies

participate in these meetings. Timely presentations on current trends

are given at these meetings by experts in their respective fields.

Working groups are created from these meetings to address specific problems

and share best business practices. Examples of these working groups include

Non-Receipt, Plant Security, Identity Theft, Convenience Checks, Nigerian

Crimes, Skimming, Internet Fraud, and Address Validation. Through these

working groups, the USPIS has been responsible for several preventive

initiatives. Some of those initiatives are Card Activation where the consumer

must call to activate a credit card that he receives through the mail; and the

Inspection Service’s full use of the National Change of Address service and

Address Change Service to the Credit Card Industry, which prevents the

fraudulent use of changes of address. It also identified addresses belonging

to Commercial Mail Receiving Agencies and other mail drops. These services
64

reduced the risk of sending credit cards and other access devices to fraudulent

addresses and vacant properties.

Working groups were also responsible for the development and publication

of the Identity Theft Brochure, Publication 280, Identity Theft: Safeguard Your 

Personal Information, and the publication of the best practices guide, Fighting 

Identity Theft, Best Practices for the Financial Industry, Law Enforcement Agencies, 

Prosecutors, and Consumer Awareness Groups. In addition, the USPIS publishes

a FIMSI newsletter three times annually for law enforcement and the financial

services and retail industries. It contains information of relevance

to financial crimes investigators, significant investigations, upcoming training,

identity-theft articles, and a nationwide list of USPIS coordinators. These

meetings have identified a number of new prevention strategies. Many of

these strategies were implemented by the financial industry and have resulted

in reduced fraud losses for them.

Finally, various agencies have had some success in sharing identity theft

information with state and local law enforcement authorities through forums

other than multiagency task forces. HHS OIG, for example, participates in

an information sharing national teleconference that has produced a number

of helpful tips to state Attorneys General by providing them with 800

numbers, names used and the names of organizations behind telemarketing

fraud schemes directed at Part D beneficiaries, as well as processors of the

electronic transfers through which those schemes were conducted.

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COMBATING IDENTITY THEFT A Strategic Plan

A number of federal, state, and local law enforcement authorities have found

multi-agency task forces or working groups especially valuable in investigating

identity theft. Task forces typically share intelligence and investigative

information about leading identity theft activities, groups, and offenders in

their region, facilitate coordination among law enforcement agencies in the

same area, and enable participating agencies to make the most efficient use of

their respective resources to pursue significant identity theft cases. In addition,

a few of these task forces have dedicated office space, where agents from

different agencies can meet to exchange information and work together,

and a prosecutor who is regularly assigned to handle task force cases.

Federal authorities lead or co-lead more than 90 task forces and working

groups devoted (in whole or in part) to identity theft:

United States Attorney’s Offices: U.S. Attorneys lead approximately

17 identity theft task forces and working groups in cities such as

Philadelphia, St. Louis, and Eugene, Oregon. Approximately 27

U.S. Attorney’s Offices participate in identity theft task forces

or working groups, one U.S. Attorney’s Office participates on a task

force that investigates identity theft, but also other white collar crime,

and other U.S. Attorney’s Offices are in the process of forming an

identity theft task force or working group.

FBI: The FBI leads four identity theft task forces, and participates in 21

identity theft/financial crimes task forces or working groups in most of

the major metropolitan areas. In addition, the FBI’s Cyber Division has

more than 90 task forces and more than 80 working groups, consisting

of federal, state, and local law enforcement personnel, that investigate

all cybercrime violations, including identity theft and Internet fraud.

U.S. Secret Service: The Secret Service has 29 Financial Crimes Task

Forces and 24 Electronic Crimes Task Forces that focus, to varying

degrees, on identity theft-related crimes. The Financial Crimes Task

Forces are controlled through Secret Service offices in Atlanta, Austin,

Baltimore, Charlotte, Chicago, Cleveland, Dallas, Ft. Myers, Houston,

Jacksonville, Kansas City, Las Vegas, Little Rock, Memphis, Miami,

New Orleans, Newark, Norfolk, Oklahoma City, Omaha, Orlando,

Riverside, San Antonio, San Diego, St. Louis, Springfield, Tampa,

Tulsa, and Washington, D.C. The Electronic Crimes Task Forces are

located in Atlanta, Baltimore, Birmingham, Boston, Buffalo, Charlotte,

Chicago, Cleveland, Columbia (South Carolina), Dallas, Houston, Las

Vegas, Los Angeles, Louisville, Miami, Minneapolis, New York City,

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INVESTIGATIVE APPROACHES TO IDENTITY THEFT: Interagency Working Groups

and Task Forces
66

Oklahoma City, Orlando, Philadelphia, Pittsburgh, San Francisco,

Seattle, and Washington, D.C.49

U.S. Postal Inspection Service: The Postal Inspection Service actively

leads 14 Financial Crimes Task Forces/Working Groups in the following

places: Atlanta, Birmingham, Boston, Hawaii, Los Angeles, Memphis,

New York, Northern Kentucky, Philadelphia, Phoenix, Pittsburgh,

Richmond, Springfield, and St. Louis. The Postal Inspection Service

is also the co-leader of task forces in Chicago, Salt Lake City, St. Paul/

Minneapolis, and Oklahoma City.

U.S. Immigration and Customs Enforcement (ICE): ICE has

established Document and Benefit Fraud Task Forces (DBFTFs) in 11

cities across the country to enhance interagency communications and

improve each agency’s effectiveness in fraud investigations. The DBFTFs

consist of federal, state, and local agencies, and are co-located at ICE

facilities. The DBFTFs combine the resources, authorities, and expertise

of each of their partners to disrupt and dismantle organizations that

commit various types of fraud and to deter the perpetration of fraud.

The DBFTFs aggressively pursue many types of fraud that, by their

nature, encompass identity theft. Additionally, ICE is aggressively

focusing its anti-identity theft efforts in the area of worksite enforcement,

and ICE is working with other departments and agencies to establish

a comprehensive approach for employers to identify and employ

authorized workers and reduce the use of counterfeit identification.

Other agencies do not lead, but actively participate in identity theft task

forces. Examples include:

SSA OIG. SSA OIG’s Office of Investigations special agents participate

in more than 100 various task forces, many devoted specifically to

identity theft.

IRS Criminal Investigation Division (IRS CI). Approximately onequarter of IRS CI’s 30 field offices have representatives on identity theft

task forces. Some field offices have representatives in multiple judicial

districts.

State Department Diplomatic Security. The State Department’s

Bureau of Diplomatic Security is establishing an identity fraud task

force with the Puerto Rican Police Department. The Bureau’s 31 field

and resident offices participate in multi-agency identity theft task forces

in their regions.

The following are some examples of interagency working groups and task

forces:

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COMBATING IDENTITY THEFT A Strategic Plan

In two areas of the country where the use of compromised identities

are common, the HHS OIG has teamed with the FBI, the DOJ, the

Medicaid Fraud Control Unit, the SSA OIG, and representatives of the

CMS to target the perpetrators. This is an effective program to identify

those who commit fraud against the government.

The Regional Identity Theft Working Group (the RIT Group) in the

Eastern District of Pennsylvania has the following purposes: (1)

information sharing and deconfliction of investigations; (2) identification

of new identity theft schemes and key identity theft targets; and (3)

hosting of discussions about identity theft prevention. In order to

increase federal prosecutions for identity theft, monetary thresholds are

reduced for cases involving organizations, and for individuals who serve

in certain leadership roles. In order to increase sanctions for such cases,

Assistant United States Attorneys regularly seek upward departures in

criminal defendants’ sentences when the defendants disrupted victims’

lives. The RIT Group is also developing an online database to foster

better communication between law enforcement agencies about identity

theft investigations.

The Identity Theft Crimes Working Group in the District of New

Hampshire is highly inclusive of both federal and state agencies,

including a number of regulatory agencies for banking, insurance,

and securities. It also monitors and uses information from the FTC

Consumer Sentinel website to identify identity theft complaints over

which it may have jurisdiction for the purpose of generating new cases.

The Los Angeles Identity Theft and Economic Crimes Task Force,

led by the USPIS, includes the USSS, the FBI, the Los Angeles Police

Department, and the Los Angeles County Probation Department.

This task force also has a working relationship with other federal law

enforcement components, including ICE, IRS-CI, and the SSA OIG.

Numerous success stories reflect the impact of these task force efforts. For

example, beginning in February 2005, the USPIS-led Identity Theft Economic

Crimes Task Force (ITEC) in Los Angeles received information from Sears/

Citibank regarding the fraudulent account takeovers of more than 300 linked

Sears credit cards totaling more than $1 million in fraud losses. All of the

account addresses were fraudulently changed through Sears/Citibank to

various Commercial Mail Receiving Agencies (CMRAs) located throughout

Southern California. Subsequent investigation by ITEC revealed that two

Nigerian nationals obtained the credit cards from the various CMRAs.

These individuals then used the credit cards and corresponding fraudulent

identification to conduct fraudulent balance transfers and cash advances.

They also used data search engines such as ChoicePoint and Merlin to obtain

the necessary information on the victims to facilitate the account takeovers.
68

On July 19, 2005, members of ITEC executed federal search warrants

at the suspects’ residences, vehicles, and storage units. Fraudulent California

identification cards and Nigerian passports bearing the individuals’

photographs but issued in various names were recovered during the search

of the residences. The names on the identification cards corresponded with

the account holder information on more than 30 recovered credit cards. Also

recovered during the search were a number of printouts bearing corresponding

victim information issued from Merlin and Intelius. Recovered from the

storage unit were several hundred credit cards and more than 3,000

ChoicePoint search printouts, many of which bore handwritten notations

indicating credit cards issued in those identities that were shipped to CMRAs

under their control. The suspects were taken into custody pursuant to federal

arrest warrants for violations of conspiracy to commit access device fraud.

Both defendants pleaded guilty in United States District Court to conspiracy

and access device fraud, and one defendant pleaded guilty to an additional

count of computer intrusion.

PART M
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COMBATING IDENTITY THEFT A Strategic Plan

Federal law enforcement officers rely on a wide range of federal criminal

statutes to investigate and prosecute identity theft. The two federal statutes

that most directly prohibit identity theft are the identity theft (18 U.S.C.

§ 1028(a)(7)) and aggravated identity theft (18 U.S.C. § 1028A(a)) statutes. The

identity theft statute generally prohibits knowingly transferring, possessing,

or using a means of identification of another person in connection with any

unlawful activity that constitutes a violation of federal law, or that constitutes

a felony under any applicable state or local law.50 Similarly, the aggravated

identity theft statute (18 U.S.C. § 1028A(a)(1)) prohibits knowingly transferring,

possessing, or using a means of identification of another person, during and

in relation to any of numerous specified federal felonies listed in that section.

Federal prosecutors have been making substantial use of the identity theft

and aggravated identity theft statutes in pursuing identity theft cases.

In addition to using the identity theft and aggravated identity statutes, DOJ

often charges other offenses that may be committed in the course of identity

theft and fraud. Some of the most frequently used statutes in this regard

are mail fraud (18 U.S.C. § 1341); wire fraud (18 U.S.C. § 1343); financial

institution fraud (18 U.S.C. § 1344); access device fraud (18 U.S.C. § 1029);

and SSN fraud (42 U.S.C. § 408(a)(7)(B)). In cases involving false documents,

such as visas, passports, or other documents relating to identification, federal

prosecutors also can charge a variety of identification document offenses.

These include identification document fraud (18 U.S.C. § 1028(a)(1)-(6));

false statement in application and use of passport (18 U.S.C. § 1542); forgery

or false use of passport (18 U.S.C. § 1543); misuse of passport (18 U.S.C.

§ 1544); and fraud and misuse of visas, permits, and other documents

(18 U.S.C. § 1546). In some cases involving “pretexting” (i.e., fraudulent

misrepresentations to obtain customer data) directed at or affecting financial

institutions, the GLB Act51 may apply.

Three other federal statutes may also apply to computer-related identity theft.

First, the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030(a)(4),

generally prohibits the unauthorized accessing of a computer with intent to

defraud and thus furthering the fraud and obtaining anything of value. This

statute has been used effectively to charge defendants engaging in identity

theft by unlawful accessing of computers where the evidence shows that the

data was taken as part of a fraud scheme. Second, 18 U.S.C. § 1030(a)(2)

generally prohibits the theft of information from a computer, but limits a

federal court’s jurisdiction to instances in which the thief uses an interstate

communication to access that computer (unless the computer belongs to the

federal government or a financial institution). Third, 18 U.S.C. § 1030(a)(5)

prohibits actions that cause “damage” to computers—that is, actions that

impair the “integrity or availability” of data or computer systems.52 Absent

PART N

FEDERAL CRIMINAL STATUTES USED TO PROSECUTE IDENTITY THEFT
70

special circumstances, however, the loss caused by the conduct must exceed

$5,000 in order for it to constitute a federal crime.

Another federal criminal offense that may apply in some computer-related

identity theft cases is the “cyber-extortion” provision of the Computer

Fraud and Abuse Act, 18 U.S.C. § 1030(a)(7). This subsection prohibits

the transmission of a threat “to cause damage to a protected

computer.”53 Subsection 1030(a)(7) is used, for example, to prosecute

criminals who threaten to delete data, crash computers, or knock computers

off of the Internet using a denial of service attack. This provision provides

the electronic counterpart to traditional extortion statutes that generally

require a threat to cause bodily harm or the destruction of physical property.

In addition, prosecutors often utilize statutes related to the programs and

operations of the SSA, which are located in title 42 of the United States Code,

to prosecute identity theft-related crimes. One of these statutes, 42 U.S.C.

§ 408, specifically addresses fraud relating to a SSN and Social Security card.

It provides criminal penalties for an individual who fraudulently obtains,

uses, or represents a SSN to be theirs. This statute also provides for criminal

penalties for an individual who fraudulently buys, sells, or possesses a Social

Security card with intent to sell or alter. It is also a violation of this statute

to disclose, use, or compel the disclosure of the SSN of any person in violation

of the laws of the United States.

Finally, HIPAA can be used to prosecute identity theft-related offenses.

HIPAA provides for criminal sanctions against a health plan, health care

clearing house, or health care provider subject to its provisions that wrongfully

uses or causes to be used a unique health identifier, or that wrongfully obtains

individually identifiable health information relating to an individual, or which

wrongfully discloses such individually identifiable information to another

party. 42 U.S.C. § 1320d-6(a). Violators may be fined not more than $50,000

and imprisoned not more than one year; or, if the offense is committed under

false pretenses, be fined up to $100,000 and/or imprisoned not more than five

years; or, if the offense is committed with intent to sell, transfer, or use

individually identifiable health information for commercial advantage,

personal gain, or malicious harm, be fined not more than $250,000 and be

imprisoned up to ten years.

PART M
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COMBATING IDENTITY THEFT A Strategic Plan

At the National Advocacy Center (NAC) in Columbia, South Carolina,

the DOJ offers training on identity fraud as part of other courses, including

cybercrime and white-collar crime courses. The National District Attorneys

Association (NDAA) also has a training program at the NAC, where it

conducts courses on identity theft and cybercrime.	

A number of other law enforcement entities also provide training, not only

to their own investigators, but also to the private sector:

United States Attorney’s Offices 

The U.S. Attorney’s Office for the Eastern District of Pennsylvania

organized a conference for hospitals, utilities, universities, banks, and

corporations on data security. In addition to technical data management

and employee screening sessions, the conference addressed the pitfalls

of poor information security, such as civil liability.

The U.S. Attorney’s Office for the Southern District of West Virginia

has implemented the Identity Theft/Document Fraud Initiative to train

prosecutors, law enforcement officers, Department of Motor Vehicle

employees, other state and federal agencies, and the banking industry

about the prevention and detection of document fraud. The Initiative

involves an extensive training plan for each member agency, and

includes the IRS-CI, SSA’s OIG, USSS, FBI-Joint Terrorism Task Force,

ICE, West Virginia State Police, West Virginia Department of Motor

Vehicles, Bureau of Prisons, West Virginia Bankers Association, and the

Southern District of West Virginia’s Anti-Terrorism Advisory Council.

The U.S. Attorney’s Office for the District of Oregon sponsors an annual

financial crimes conference that serves law enforcement, financial fraud

investigators for financial institutions, and internal auditors for public

agencies. It provides investigators and prosecutors who handle financial

crimes, and private-sector personnel who assist them, tools to assist in

the prevention, detection, investigation, and prosecution of fraud and

identity theft. It regularly includes sections on asset tracing, investigative

techniques involving digital technology, basic data recovery, search and

seizure laws, pertinent financial privacy and regulatory provisions, and

trends associated with economic fraud.

FBI

The FBI has provided in-service training on identity theft to its agents,

and also includes identity theft information in other training sessions

for FBI personnel. With respect to identity theft and health care, the FBI

and the CMS are presenting Part D law enforcement training in several

cities, which focuses on identity theft and scams that facilitate

prescription drug fraud.

PART O

TRAINING FOR AND BY INVESTIGATORS AND PROSECUTORS
72

United States Secret Service 

The Secret Service provides a substantial amount of training to local

and state law enforcement counterparts, as well as providing support

in a variety of ways—such as forensic analysis and expert testimony in

support of local cases. In connection with an interagency working group

on identity theft, the Secret Service, the Postal Inspection Service, and

the FTC, in conjunction with the International Association of Chiefs

of Police, developed a roll-call video on identity theft for police

departments to show to their officers. This video was provided to police

departments throughout the country. In addition, the Secret Service’s

Electronic Crimes Section has trained over 150 state and local officers

from across the United States to conduct computer investigations as well

as computer forensic analysis. The Secret Service has also partnered with

the National District Attorneys Association’s National Center for the

Prosecution of Identity Crime to provide training for local prosecutors

focused primarily on identity crimes.

The Secret Service provides six training seminars annually for U.S.

Attorneys from across the United States. These seminars are hosted

and coordinated by Secret Service personnel, and have included a block

of instruction from the Department of Justice’s Computer Crime and

Intellectual Property Section (CCIPS) in some of the seminars. The

topics covered in this training included: Counterfeit Currency, Eurasian

Hacking, Identity Theft, Electronic Crimes Task Forces and Private

Sector Partnerships, Cyber Law, and Cyber Prosecutions. The seminars

are intended to provide an education on the Secret Service’s core

violations and current trends observed in its daily investigations

and investigations involving the Internet.

National White Collar Crime Center 

The National White Collar Crime Center (NW3C), a nonprofit

organization that provides training programs and other assistance

to state and local law enforcement in partnership with the Bureau

of Justice Assistance, has completed the development of a three-day

identity theft course. The curriculum includes topics such as investigative

tools, techniques, and resources for investigating identity theft crimes;

“criminal tools of the trade”; the basics of identity theft for financial

gain or concealment (e.g., for terrorism or avoidance of prosecution);

and proactive and reactive approaches to identity theft that provide

students with practical investigative experience. NW3C has also included

modules on identity theft in other courses it conducts, which include

methods of following the financial trail of these types of crimes.

PART O
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COMBATING IDENTITY THEFT A Strategic Plan

American Prosecutors Research Institute 

A nonprofit affiliate of the NDAA, the American Prosecutors Research

Institute, has an established White Collar Crime Unit. With start-up

funding from the BJA, the unit provides training to local prosecutors

and law enforcement on a variety of issues including cybercrime,

telemarketing fraud, and financial exploitation of the elderly. Trainings

occur at specific sites across the country and as part of NDAA’s training

program at the NAC.

	 NDAA recently established the National Center for the Prosecution

of Identity Crimes to train local prosecutors, law enforcement, and

members of the financial industry in the investigation and prosecution

of identity crimes. The Center has conducted a Financial Identity Fraud

training in Las Vegas and presented an Identity Theft Fall Conference at

the NAC. The Center contemplates conducting several more conferences

and providing clearinghouse services in the future.

Regional Information Sharing Systems (RISS)

Through the RISS program, in partnership with BJA, several additional

classes including identity theft have been taught for state and local law

enforcement. For example, the Mid-States Organized Crime Information

Center co-sponsored a Financial Records Examination and Analysis

course (presented by NW3C) that included identity theft as one of

the topics.

National Consortium for Justice Information and Statistics (SEARCH)

Through a partnership with BJA, SEARCH trains state and local law

enforcement on “Core Skills for the Investigation of Computer Crime,”

which covers the basics of investigating the misuse of identities online.

Other Multi-Agency Training

Since 2002, several federal law enforcement agencies—the DOJ, the

USPIS, the USSS, the FTC, and the FBI—and the American

Association of Motor Vehicle Administrators (AAMVA) have jointly

sponsored a series of more than 20 regional training seminars on identity

fraud for state and local law enforcement agencies in numerous states

across the United States. These one-day seminars, which are provided

free of charge to state and local law enforcement, provide basic

information tools and guidance with investigators’ and prosecutors’

perspectives on pursuing identity theft cases.
74

Federal and state laws offer victims of identity theft an array of tools to avoid

or mitigate the damage they incur. Numerous resources and websites advise

consumers of the steps to take if they have become victims of identity theft,

or if their personal information has been breached. Consumers should take

specific actions as soon as they suspect that they have been or are about

to become a victim of identity theft. The following options are available

to identity theft victims:

Place Fraud Alerts

	 Once a consumer suspects that he or she has been or may become a

victim of identity theft, for instance, if their wallet was stolen or they are

notified that their personal information was compromised by a data

breach, they may place, at no cost, an “initial fraud alert” on their credit

report by making a request to any one of the three national CRAs—

Experian, Equifax, or TransUnion.54 Fraud alerts can help prevent an

identity thief from opening any accounts in the consumer’s name. The

presence of a fraud alert requires creditors to confirm the consumer’s

identity before opening new accounts or making changes to existing

accounts.55 An initial fraud alert remains in place for 90 days, but may

be renewed.56 If an identity theft occurs, the victim may place an

extended seven-year alert.57

File a Police Report 

	 Victims of identity theft should file a report with law enforcement

officials as soon as they learn of the crime. This is a necessary step in

obtaining an extended fraud alert or blocking fraudulent trade lines on

a credit report, and can help with creditors who may want proof of a

crime. Because many police departments, as a matter of policy and/or

practice, do not routinely take identity theft reports, consumers often

must be persistent in their requests for police reports. Victims can print

a copy of the online form and provide it to their local police department.

The police can use the completed form as the foundation of a police

report.

Report the Theft to the FTC’s Identity Theft Data Clearinghouse

	 Consumers who experience identity theft should report the event to the

FTC either through the online complaint form (www.ftc.gov/idtheft) or

the toll free hotline (877 ID THEFT). The FTC maintains the federal

clearinghouse for complaints by victims of identity theft. Identity theft

reports are available through the FTC’s Consumer Sentinel Network to

law enforcement officials across the country for use in their

investigations.

PART P

Current Remediation Tools Available to Victims
75

COMBATING IDENTITY THEFT A Strategic Plan

	 As noted above, victims of identity theft should file a report with law

enforcement officials as soon as they learn of the crime.

Obtain Document Related to Fraudulent Transactions

	 Under section 609(e) of the FCRA,58 victims, or law enforcement

officers acting on their behalf, can obtain records and application

information from financial institutions that have handled transactions

that identity thieves conducted in the victims’ names. (Some law

enforcement officials, however, report that their agents have had

difficulty in doing so because certain financial institution personnel are

not familiar with the relevant provisions of the FCRA.)

Close Fraudulently Opened or Compromised Accounts

	 Consumers should close any accounts, such as bank accounts and/or

credit cards that were established fraudulently or appear to have been

compromised. A consumer may be required to provide evidence,

including a police report and other supporting documents, before a

creditor closes the account or forgives the fraudulent debt.

Order a Credit Report 

	 All consumers are entitled to receive a free copy of their consumer

report from each of the three national CRAs (Experian, Equifax, and

TransUnion), as well as from various other nationwide specialty CRAs,

every twelve months.59 Additionally, placing a fraud alert entitles

consumers to immediately request free copies of their credit reports

regardless of the timing of their previous requests.60 Consumers who

have had an extended fraud alert placed on their credit reports are

entitled to request two free copies of their credit report from each of the

CRAs in the twelve months following the date the extended alert was

placed.61

Blocking Fraudulent Information on Credit Reports

	 When a credit report contains fraudulent information as a result of

identity theft, the consumer can ask that the information be blocked

from the credit report. CRAs block fraudulent information from a credit

report when the consumer provides certain information including a copy

of a police report and a statement that the information does not relate to

any transaction made or authorized by the consumer.62

Seek Assistance from Information Furnishers

	 An “information furnisher” is any entity that provides information to

the CRAs. For example, a department store that opens a store account

for a consumer would furnish information about that credit account to
76

the three CRAs. When a CRA notifies an information furnisher that it

has blocked fraudulent information about a credit transaction by that

furnisher, the information furnisher may not continue to report that

information to the CRAs, and may not hire someone to collect the debt

that relates to the fraudulent account, or sell the debt to someone else

who would try to collect it.63

Receive an Accounting of Disclosures Made By Health Care 

Providers and Health Plans

	 All consumers can protect themselves against a form of identity theft,

medical identity theft, by requesting from their health care providers or

health plans accountings of any disclosure made of their protected

health information during the preceding six years, other than those that

relate, among other exceptions, to treatment, payment, and health care

operations. 45 C.F.R. § 164.528. The HIPAA Privacy Rule requires

health plans, health care clearinghouses, and covered health care

providers to provide one free accounting per year upon the request of the

consumer.

Seek Assistance from IRS

	 In some cases of identity theft, the suspect either obtains a refund or

incurs tax liability in the victim’s name. In such cases, the victim may

need to obtain assistance from the IRS. The IRS is updating procedures

to provide notices and assistance to taxpayers whose name and SSN

were used by an identity thief for employment purposes. The Identity

Theft Program Office can provide further information regarding this

comprehensive effort.

Dispute Fraudulent Debts with Debt Collectors

	 Consumers also have rights if they are contacted by debt collectors about

debts incurred in their name by identity thieves. The consumer can stop

contacts by a debt collector by sending a letter within 30 days of being

contacted, informing the collector that the debt is not theirs. The debt

collector may not contact the consumer again until it sends proof of the

debt to the consumer. After a debt collector is notified that a debt is the

result of identity theft, it is required to inform the creditor for whom it is

collecting that the consumer disputes the debt.

Pursue State Remedies

	 Some states provide additional protections to identity theft victims by

allowing them to request a “credit freeze,” which prevents consumers’

credit reports from being released without their express consent. Because

most companies obtain a credit report from a consumer before extending

credit, a credit freeze will likely prevent the extension of credit in a

consumer’s name without the consumer’s express permission.

PART P
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COMBATING IDENTITY THEFT A Strategic Plan

Contact Identity Theft Victim File Programs

	 Identity thieves have sometimes committed crimes using another’s name.

Victims who experience this form of identity theft often must establish

that they are not the person who, in their name, committed the crime.

Several states and the FTC have programs that address this serious

situation. For example, California maintains a registry of individuals

whose identities have been used in the commission of a crime. The

registry is used to help consumers establish that they were not

responsible for crimes committed in their name.64 Similarly, Ohio’s

PASSPORT system for identity theft victims issues a card to identity

theft victims that can be used to verify their identities to law enforcement

officers and creditors. Several other states, too, have begun to use

“passport” programs like these. The FBI has a similar program, which is

managed through the Criminal Justice Information Service.

Consider Private Sector Assistance

	 The private sector and not-for-profit entities also provide tools for

victims to repair the damage caused by identity theft. For example, both

the ITRC and the Privacy Rights Clearinghouse (PRC) provide direct

consumer assistance under certain circumstances. Other organizations

offer recovery programs for a fee that promise to repair the damage

caused by the identity thief.65 CRAs and other companies offer credit

monitoring services that claim to provide early warning of identity

theft.66

	 In addition, a consortium of dozens of large financial institutions

created the not-for-profit ITAC in 2004, to provide free, one-on-one

assistance to consumers who experience identity theft through one of the

member entities. Identity theft victims who contact an ITAC member

company first try to resolve their dispute with that company, and then

can choose to refer their identity theft case to the ITAC.

Consider Whether to Seek a New Social Security Number

	 In limited circumstances, the SSA may assign a new SSN to a victim

who provides evidence of SSN misuse and, despite efforts to resolve the

problem, continues to be disadvantaged by the misuse. A major

drawback to getting a new SSN is that an individual may have a difficult

time re-establishing an identity under the new SSN, including a credit,

educational, and medical history. (SSA will cross-refer the old and new

SSNs in SSA records to ensure proper crediting of earnings.)
78

1.	 Gramm-Leach-Bliley Act § 501(b), 15 U.S.C. § 6801; Fair Credit Reporting Act

§ 628, 15 U.S.C. § 1681w.

2.	 The FACT Act also includes restrictions on the circumstances under which

consumer reporting agencies may furnish consumer reports that contain medical

information about consumers. In particular, a consumer reporting agency may

not furnish a consumer report that contains medical information about a

consumer except under certain delineated circumstances involving consumer

consent to the furnishing of the report, or if the information is limited to account

status and is reported in a manner that does not reveal the nature of the medical

treatment.

3.	 See also Identity Theft and Pretext Calling, Board SR Letter 01-11 (Supp) (Apr.

26, 2001), OCC AL 2001-4 (April 30, 2001), OTS CEO Memorandum #139

(May 4, 2001), FDIC FIL-39-2001; Threats from Fraudulent Bank Web Sites:

Risk Mitigation and Response Guidance for Web Site Spoofing Incidents, OCC

Bulletin 2005-24 (July 1, 2005); Phishing and E-mail Scams, OTS CEO

Memorandum #193 (Mar. 8, 2004); Phishing, OTS CEO Memorandum #205

(Sep. 8, 2004); Phishing, FDIC FIL-103-2004; Bank Use of Foreign-Based ThirdParty Service Providers, OCC Bulletin 2002-16 (May 15, 2002); Third Party

Arrangements, OTS Thrift Bulletin 82a (September 2, 2004); Infrastructure

Threats—Intrusion Risks, OCC Bulletin 2000-14 (May 15, 2000); Voice Over

Internet Protocol- FDIC FIL-69-2005; Spyware- FDIC FIL-66-2005; FDIC

Identity Theft Study Supplement- FDIC FIL-59-2005; FDIC Identity Theft

Study- FDIC FIL-132-2004; Software Due Diligence- FDIC FIL-121-2004;

Instant Messaging- FDIC FIL-84-2004; Virus Protection- FDIC FIL-62-2004;

Internet Fraud- FDIC FIL-27-2004; Patch Management- FDIC FIL-43-2003;

Wireless- FDIC FIL-8-2002. The financial institution regulators also issue alerts

from time to time, such as Customer Identity Theft: E-Mail Related Fraud

Threats, OCC Alert 2003-11 (September 12, 2003), and Network Security

Vulnerabilities, OCC Alert 2001-4 (April 24, 2001).

4.	 See, e.g., The Financial Services Roundtable, Voluntary Guidelines for Consumer 

Confidence in Online Financial Services, www.bitsinfo.org/downloads/

Publications%20Page/bitsconscon.pdf; BITS Voluntary Guidelines for Aggregation 

Services, www.bitsinfo.org/downloads/Publications%20Page/bitsaggguide2004.pdf.

5.	 See “BITS,” the Technology Group of the Financial Services Roundtable,

www.bitsinfo.org/downloads/Publications%20Page/bitsidtheftwhitepaper.pdf,

Financial Identity Theft: Prevention and Consumer Assistance, June 2003.

6.	 See http://usa.visa.com/business/accepting_visa/ops_risk_management/

cisp.html.

7. See the data security guidelines of Truste.org, at www.truste.org/pdf/

SecurityGuidelines.pdf.

8.	 See id.

9.	 See id.

ENDNOTES
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COMBATING IDENTITY THEFT A Strategic Plan

10.	See id.

11.	See Peter Mell et al., Guide to Malware Incident Prevention and Handling: 

Recommendations of the National Institute of Standards and Technology at ES-1

(Nov. 2005), http://csrc.nist.gov/publications/nistpubs/800-83/SP800-83.pdf.

12.	Id.

13.	Id.

14.	Id.

15.	See, e.g., Visa USA Cardholder Information Security Program, What To Do If

Compromised (Nov. 14, 2005), http://usa.visa.com/download/merchants/cisp_

what_to_do_if_compromised.pdf, American Express, Data Compromise Workbook

(2006).

16.	American Express, Data Compromise Workbook (2006), at 6-8.

17.	Visa USA Cardholder Information Security Program, What To Do If Compromised

(Nov. 14, 2005), at 3.

18.	 Id.

19.	American Express, Data Compromise Workbook (2006), at 10.

20.	For instance, Educause, a nonprofit that emphasizes technology and information

security for institutions of higher education, has created a Data Incident

Notification Toolkit, which provides users with information about legal

obligations, policies and procedures, thresholds for notification, and notification

templates. See Educause, Data Incident Notification Toolkit, available at http://www.

educause.edu/DataIncidentNotificationToolkit/9320.

21.	The IT Compliance Institute (ITCI) has provided some key recommendations for

companies to consider in the event of a security incident. See http://www.

itcinstitute.com/display.aspx?id=1731. First, ITCI recommends that companies

develop a good communications strategy and ensure that only pre-approved

public relations personnel speak about any incident. Also, regardless of state

laws, it advises that companies should provide nationwide notice to consumers of

a potential data breach using multiple consumer notification techniques, such as

a combination of telephone and letter. Any notification provided by a business

should quickly, clearly, and thoroughly communicate to its customers what

happened, the potential harm for the customer, what the company is doing to

help, and how it plans to prevent future breaches. Finally, ITCI recommends

providing essential information and steps that customers should take to protect

themselves. IT Compliance Institute, Data Breach Damage Control (May 16, 2006),

available at www.itcinstitute.com/display.aspx?id=1731.
80

22.	Some companies have provided technical advice, such as the use of specific

backup and encryption technologies, in the event of lost or stolen media, as well

as specific types of data collection and analysis software that companies should

use for forensic investigations. Others assist members and others in developing

and implementing information security as well as breach response programs.

23.	Available at www.ncpc.org/cms/cms-upload/prevent/files/idtheftrev.pdf.

24.	See http://www.ojp.gov/ovc/help/it.htm.

25.	Available at http://studentaid.ed.gov/PORTALSWebApp/students/english/idtheft.

jsp.

26.	See http://www.staysafeonline.org/basics/consumers.html.

27.	See http://www.texasbankers.com/pdfs/StopIDtheft.pdf.

28.	See “Identity Theft: How To Avoid Theft And What To Do If It Happens

To You,” available at www.sia.com/publications/pdf/Identity_Theft.pdf.

29.	Available at www.nasd.com/InvestorInformation/InvestorAlerts/FraudsandScams/

PhishingandOtherOnlineIdentityTheftScamsDontTaketheBait/index.htm.

30.	“Medical Identity Theft: The Information Crime That Can Kill You,” Dixon,

Pam. World Privacy Forum, Spring 2006, www.worldprivacyforum.org/pdf/wpf_

medicalidtheft2006.pdf, at 6.

31.	“Colleges are textbook cases of cybersecurity breaches”, USA TODAY, August

1, 2006, available at www.usatoday.com/tech/news/computersecurity/hacking/

2006-08-01-college-hack_x.htm?POE=TECISVA.	 	

32.	See http://identityweb.umich.edu/.

33. 	Pub. L. 108-458.

34.	Pub. L. 109-13. 

35. See Bureau of Justice Statistics Bulletin, Prosecutors in State Courts, 2005

(July 2006), available at http://www.ojp.usdoj.gov/bjs/pub/pdf/psc05.pdf.

36.	Pub.L. 108-275, July 15, 2004, 188 Stat. 831.

37.	No cases with a conviction under 18 U.S.C. § 1028A were received by the

Commission in Fiscal Year 2004. Cases with incomplete information on

statutory subsection and/or applicable statutory minimum were excluded.

38.	Average sentences include prison and alternative confinement as defined in

USSG § 5C1.1. Cases with sentences of 470 months (or more, including life)

or probation were included in the average sentence calculations as 470 months

and zero months, respectively.

39.	See Guidelines Manual USSG § 3B1.3 App. Note 2(B) for full text including

examples.

ENDNOTES
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COMBATING IDENTITY THEFT A Strategic Plan

40.	Average sentences include prison and alternative confinement as defined in

USSG § 5C1.1. Cases with sentences of 470 months (or more, including life)

or probation were included in the average sentence calculations as 470 months

and zero months, respectively.

41. See kansascity.fbi.gov/dojpressrel/pressrel06/identitytheft051006.htm.

42.	See U.S. Department of Justice, Press Release (July 11, 2006), available at

www.usdoj.gov/opa/pr/2006/July/06_crm_424.html.

43.	See United States Attorney’s Office, Central District of California, Press Release

(December 15, 2005), available at http://www.usdoj.gov/usao/cac/pr2005/

170.html.

44.	SSN misuse includes both identity theft and identity fraud not involving another

real person’s identity, e.g., when an individual fraudulently obtains a second SSN.

45.	See Department of Justice, Press Release (November 20, 2003), available at

http://www.fbi.gov/dojpressrel/pressrel03/cyber112003.htm.

46.	See Prepared Statement of Anne Wallace, Executive Director, Identity Theft

Assistance Corporation, Before the Subcommittee on Crime, Terrorism and

Homeland Security of the House of Representatives Committee on the Judiciary,

June 11, 2006, available at http://www.identitytheftassistance.org/resources/

Wallace.ITAC.pdf.

47.	See Reuters, IDs of 50,000 Bahamas resort guests stolen, New Zealand Herald,

January 9, 2006, available at http://www.nzherald.co.nz/location/story.cfm?l_id=5

20&ObjectID=10362953.

48.	See Liberty Alliance, http://www.projectliberty.org/.

49. See U.S. Secret Service, Press Release (May 23, 2006),

available at http://www.secretservice.gov/press/gpa0613.pdf.

50.	18 U.S.C. § 1028(d)(7).

51.	15 U.S.C. §§ 6821 and 6823.

52.	See 18 U.S.C. § 1030(e)(8).

53. 	18 U.S.C. § 1030(a)(7).

54.	Fair Credit Reporting Act § 605A, 15 U.S.C. § 1681c-1.

55.	FCRA § 605A(h)(1)(B), 15 U.S.C. § 1681c-1(h)(1)(B).

56.	FCRA § 605A(a)(1)(A), 15 U.S.C. § 1681c-1(a)(1)(A).

57.	FCRA § 605A(h)(1)(B), 15 U.S.C. § 1681c-1(h)(2)(B).

58.	FCRA § 609(e), 15 U.S.C. § 1681g(e).

59.	FCRA § 612(a), 15 U.S.C. § 1681j(1).
82

60.	FCRA § 605A(a)(2), 15 U.S.C. § 1681c-1(a)(2).

61.	FCRA § 605A(b)(2)(A), 15 U.S.C. § 1681c-1(b)(2)(A).

62.	FCRA § 605B(a); 15 U.S.C. § 1681c-1(a).

63.	FCRA § 623(a)(6)(A), 15 U.S.C. § 1681s-2(a)(6)(A).

64.	See http://ag.ca.gov/idtheft/general.htm.

65.	See, e.g., http://inova.org./inovapublic.srt/eap/idtheft.jsp?tStatus=5

www.identitytheft911.com/home.htm.

66.	See http://www.fightidentitytheft.com/credit-monitoring.html.

ENDNOTES