The President’s Identity Theft Task Force

April 2007

Combating

A Strategic Plan

IDENTITY THEFT

iii

COMBATING IDENTITY THEFT A Strategic Plan

Table of Contents

Glossary of Acronyms .................................................................v

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

Letter to the President.............................................................. viii

I. Executive Summary.............................................................. 1

	 A.	 Introduction .................................................................................. 1

	 B.	 The Strategy.................................................................................. 2

II. The Contours of the Identity Theft Problem ............................. 10

	 A.	 Prevalence and Costs of Identity Theft ......................................... 11

	 B.	 Identity Thieves: Who They Are .................................................. 12

	 C.	 How Identity Theft Happens: The Tools of the Trade ................... 13

	 D.	 What Identity Thieves Do With the Information

	 	 They Steal: The Different Forms of Identity Theft ........................ 18

III. A Strategy to Combat Identity Theft....................................... 22

	 A.	 Prevention: Keeping Consumer Data out of the

	 	 Hands of Criminals ..................................................................... 22

	 	 1.	 Decreasing the Unnecessary Use of

	 	 	 Social Security Numbers ........................................................ 23

	 	 2.	 Data Security in the Public Sector .......................................... 27

	 	 	 a.	 Safeguarding of Information in the Public Sector............... 27

	 	 	 b.	 Responding to Data Breaches in the Public Sector.............. 28

	 	 3.	 Data Security in the Private Sector.......................................... 31

	 	 	 a.	 The Current Legal Landscape ........................................... 31

	 	 	 b.	 Implementation of Data Security Guidelines and Rules ..... 32

	 	 	 c.	 Responding to Data Breaches in the Private Sector............. 34

	 	 4.	 Educating Consumers on Protecting

	 	 	 Their Personal Information..................................................... 39

	 B.	 Prevention: Making It Harder to Misuse Consumer Data.............. 42

	 C.	 Victim Recovery: Helping Consumers Repair Their Lives ............. 45

	 	 1.	 Victim Assistance: Outreach and Education ........................... 45

	 	 2.	 Making Identity Theft Victims Whole..................................... 49

	 	 3.	 Gathering Better Information on the Effectiveness of Victim

	 	 	 Recovery Measures ................................................................ 51
iv

D.	 Law Enforcement: Prosecuting and Punishing Identity Thieves.......... 52

	 	 1.	 Coordination and Intelligence/Information Sharing................ 53

	 	 	 a.	 Sources of Identity Theft Information................................ 54

	 	 	 b.	 Format for Sharing Information and Intelligence................ 55

	 	 	 c.	 Mechanisms for Sharing Information ................................ 55

	 	 2.	 Coordination with Foreign Law Enforcement ......................... 58

	 	 3.	 Prosecution Approaches and Initiatives................................... 62

	 	 4.	 Statutes Criminalizing Identity-Theft Related

	 	 	 Offenses: The Gaps................................................................ 65

	 	 	 a.	 The Identity Theft Statutes................................................ 65

	 	 	 b.	 Computer-Related Identity Theft Statutes ......................... 66

	 	 	 c.	 Cyber-Extortion Statute .................................................... 66

	 	 	 d.	 Sentencing Guidelines Governing Identity Theft................ 67

	 	 5.	 Training of Law Enforcement Officers and Prosecutors........... 69

	 	 6.	 Measuring Success of Law Enforcement Efforts...................... 70

IV. Conclusion: The Way Forward ............................................. 72

APPENDICES

Appendix A: Identity Theft Task Force’s Guidance Memorand

	 on Data Breach Protocol ................................................................... 73

Appendix B: Proposed Routine Use Language .......................................... 

Appendix C: Text of Amendments 

	 18 U.S.C. §§ 3663(b) and 3663A(b) ................................................... 85

Appendix D: Text of Amendments to 18 U.S.C. §§ 2703, 2711 and 312

	 and Text of New Language for 18 U.S.C. § 3512 ................................ 87

Appendix E: Text of Amendments to 18 U.S.C. §§ 1028 and 1028A .......... 

Appendix F: Text of Amendment to 18 U.S.C. § 1032(a)(2) ...................... 

Appendix G: Text of Amendments to 18 U.S.C. §§ 1030(a)(5), (c

	 and (g) and to 18 U.S.C. 2332b ......................................................... 94

Appendix H: Text of Amendments to 18 U.S.C. § 1030(a)(7) .................... 

Appendix I: Text of Amendment to United States Sentencing

	 Guideline § 2B1.1 ............................................................................ 98

Appendix J (Description of Proposed Surveys) ......................................... 99

ENDNOTES ...................................................................................... 101

TABLE OF CONTENTS
COMBATING IDENTITY THEFT A Strategic Plan

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
vi

IRTPA–Intelligence Reform and

Terrorism Prevention Act of 2004

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

GLOSSARY OF ACRONYMS
vii

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
viii

LETTER TO THE PRESIDENT

Letter to the President

A ri 11, 2007

The Honorable George W. Bush

President of the United States

The White House

Washington, D.C.

Dear Mr. President:

By establishing the President’s Task Force on Identity Theft by Executive 

Order 13402 on May 10, 2006, you launched a new era in the fight against 

identity theft. As you recognized, identity theft exacts a heavy financial and 

emotional toll from its victims, and it severely burdens our economy. You 

called for a coordinated approach among government agencies to vigorously 

combat this crime. Your charge to us was to craft a strategic plan aiming 

to make the federal government’s efforts more effective and efficient in the 

areas of identity theft awareness, prevention, detection, and prosecution. To 

meet that charge, we examined the tools law enforcement can use to prevent, 

investigate, and prosecute identity theft crimes; to recover the proceeds of 

these crimes; and to ensure just and effective punishment of identity thieves. 

We also surveyed current education efforts by government agencies and 

the private sector on how individuals and corporate citizens can protect 

personal data. And because government must help reduce, rather than 

exacerbate, incidents of identity theft, we worked with many federal agencies 

to determine how the government can increase safeguards to better secure the 

personal data that it and private businesses hold. Like you, we spoke to many 

citizens whose lives have been uprooted by identity theft, and heard their 

suggestions on ways to help consumers guard against this crime and lessen the 

burdens of their recovery. We conducted meetings, spoke with stakeholders, 

and invited public comment on key issues.

Alberto R. Gonzales, Chairman

Attorney General

Deborah Platt Majoras, Co-Chairman

Chairman, Federal Trade Commission
ix

COMBATING IDENTITY THEFT A Strategic Plan

The views you expressed in the Executive Order are widely shared. The

is a consensus that identity theft’s damage is widespread, that it targets all

demographic groups, that it harms both consumers and businesses, and that

its effects can range far beyond financial harm. We were pleased to learn that

many federal departments and agencies, private businesses, and universities

are trying to create a culture of security, although some have been faster than

others to construct systems to protect personal information.

There is no quick solution to this problem. But, we believe that a coordinat

strategic plan can go a long way toward stemming the injuries caused by

identity theft and, we hope, putting identity thieves out of business. Taken 

a whole, the recommendations that comprise this strategic plan are designed

to strengthen the efforts of federal, state, and local law enforcement officers;

to educate consumers and businesses on deterring, detecting, and defending

against identity theft; to assist law enforcement officers in apprehending and

prosecuting identity thieves; and to increase the safeguards employed by

federal agencies and the private sector with respect to the personal data with

which they are entrusted.

Thank you for the privilege of serving on this Task Force. Our work 

ongoing, but we now have the honor, under the provisions of your Executive

Order, of transmitting the report and recommendations of the President’s

Task Force on Identity Theft.

Very truly yours,

Alberto R. Gonzales, Chairman Deborah Platt Majoras, Co-Chairman

Attorney General	 	 	 Chairman, Federal Trade Commission



COMBATING IDENTITY THEFT A Strategic Plan

I. Executive Summary

From Main Street to Wall Street, from the back porch to the front office, from

the kitchen table to the conference room, Americans are talking about identity

theft. The reason: millions of Americans each year suffer the financial

emotional trauma it causes. This crime takes many forms, but it invariab

leaves victims with the task of repairing the damage to their lives. It is a problem with no single cause and no single solutio

A. Int

Eight years ago, Congress enacted the Identity Theft and Assumption

Deterrence Act,1 which created the federal crime of identity theft and

charged the Federal Trade Commission (FTC) with taking complaints from

identity theft victims, sharing these complaints with federal, state, and local

law enforcement, and providing the victims with information to help them

restore their good name. Since then, federal, state, and local agencies ha

taken strong action to combat identity theft. The FTC has developed t

Identity Theft Data Clearinghouse into a vital resource for consumers and

law enforcement agencies; the Department of Justice (DOJ) has prosecuted

vigorously a wide range of identity theft schemes under the identity theft

statutes and other laws; the federal financial regulatory agencies2 have

adopted and enforced robust data security standards for entities under their

jurisdiction; Congress passed, and the Department of Homeland Security

issued draft regulations on, the REAL ID Act of 2005; and numerous other

federal agencies, such as the Social Security Administration (SSA), have

educated consumers on avoiding and recovering from identity theft. Ma

private sector entities, too, have taken proactive and significant steps to protect

data from identity thieves, educate consumers about how to prevent identity

theft, assist law enforcement in apprehending identity thieves, and assist

identity theft victims who suffer losses.

Over those same eight years, however, the problem of identity theft

has become more complex and challenging for the general public, the

government, and the private sector. Consumers, overwhelmed with week

media reports of data breaches, feel vulnerable and uncertain of how to

protect their identities. At the same time, both the private and public secto

have had to grapple with difficult, and costly, decisions about investments

in safeguards and what more to do to protect the public. And, at every lev

of government—from the largest cities with major police departments to the

smallest towns with one fraud detective—identity theft has placed increasingly

pressing demands on law enforcement.

Public comments helped the Task Force define the issues and challenges

posed by identity theft and develop its strategic responses. To ensure that t

Task Force heard from all stakeholders, it solicited comments from the public.


In addition to consumer advocacy groups, law enforcement, business, and

industry, the Task Force also received comments from identity theft victims

themselves.3The victims wrote of the burdens and frustrations associat

with their recovery from this crime. Their stories reaffirmed the need for t

government to act quickly to address this problem.

The overwhelming majority of the comments received by the Task Force

strongly affirmed the need for a fully coordinated approach to fighting the

problem through prevention, awareness, enforcement, training, and victim

assistance. Consumers wrote to the Task Force exhorting the public a

private sectors to do a better job of protecting their Social Security numbers

(SSNs), and many of those who submitted comments discussed the challenges

raised by the overuse of Social Security numbers as identifiers. Other

representing certain business sectors, pointed to the beneficial uses of SSNs

in fraud detection. The Task Force was mindful of both considerations, a

its recommendations seek to strike the appropriate balance in addressing SSN

use. Local law enforcement officers, regardless of where they work, wro

of the challenges of multi-jurisdictional investigations, and called for greater

coordination and resources to support the investigation and prosecution of

identity thieves. Various business groups described the steps they have tak

to minimize the occurrence and impact of the crime, and many expressed

support for risk-based, national data security and breach notification

requirements.

These communications from the public went a long way toward informing

the Task Force’s recommendation for a fully coordinated strategy. Only 

approach that encompasses effective prevention, public awareness and education, victim assistance, and law enforcement measures, and fully engages

federal, state, and local authorities will be successful in protecting citizens and

private entities from the crime.

B. The 

Although identity theft is defined in many different ways, it is, fundamentally,

the misuse of another individual’s personal information to commit fraud.

Identity theft has at least three stages in its “life cycle,” and it must be attacked

at each of those stages:

First, the identity thief attempts to acquire a victim’s personal 

information.

Criminals must first gather personal information, either through low-tech

methods—such as stealing mail or workplace records, or “dumpster diving”

—or through complex and high-tech frauds, such as hacking and the use

of malicious computer codes. The loss or theft of personal information 

itself, however, does not immediately lead to identity theft. In some case

thieves who steal personal items inadvertently steal personal information

EXECUTIVE SUMMARY


COMBATING IDENTITY THEFT A Strategic Plan

that is stored in or with the stolen personal items, yet never make use of the

personal information. It has recently been reported that, during the past yea

the personal records of nearly 73 million people have been lost or stolen, but

that there is no evidence of a surge in identity theft or financial fraud as a

result. Still, because any loss or theft of personal information is troubling a

potentially devastating for the persons involved, a strategy to keep consumer

data out of the hands of criminals is essential.

Second, the thief attempts to misuse the information he has acquired.

In this stage, criminals have acquired the victim’s personal information and

now attempt to sell the information or use it themselves. The misuse of stol

personal information can be classified in the following broad categories:

Existing account fraud: This occurs when thieves obtain account

information involving credit, brokerage, banking, or utility accounts

that are already open. Existing account fraud is typically a less costl

but more prevalent, form of identity theft. For example, a stolen cred

card may lead to thousands of dollars in fraudulent charges, but the

card generally would not provide the thief with enough information to

establish a false identity. Moreover, most credit card companies, as

matter of policy, do not hold consumers liable for fraudulent charges,

and federal law caps liability of victims of credit card theft at $50.

New account fraud: Thieves use personal information, such as Social

Security numbers, birth dates, and home addresses, to open new

accounts in the victim’s name, make charges indiscriminately, and then

disappear. While this type of identity theft is less likely to occur, 

imposes much greater costs and hardships on victims.

In addition, identity thieves sometimes use stolen personal information to

obtain government, medical, or other benefits to which the criminal is not

entitled.

Third, an identity thief has completed his crime and is enjoying the 

benefits, while the victim is realizing the harm.

At this point in the life cycle of the theft, victims are first learning of the

crime, often after being denied credit or employment, or being contacted by a

debt collector seeking payment for a debt the victim did not incur.

In light of the complexity of the problem at each of the stages of this life

cycle, the Identity Theft Task Force is recommending a plan that marshals

government resources to crack down on the criminals who traffic in stolen

identities, strengthens efforts to protect the personal information of our

nation’s citizens, helps law enforcement officials investigate and prosecute

identity thieves, helps educate consumers and businesses about protecting

themselves, and increases the safeguards on personal data entrusted to federal

agencies and private entities.


The Plan focuses on improvements in four key areas:

keeping sensitive consumer data out of the hands of identity thieves

through better data security and more accessible education;

making it more difficult for identity thieves who obtain consumer data to

use it to steal identities;

assisting the victims of identity theft in recovering from the crime; and

deterring identity theft by more aggressive prosecution and punishment

of those who commit the crime.

In these four areas, the Task Force makes a number of recommendations

summarized in greater detail below. Among those recommendations are t

following broad policy changes:

that federal agencies should reduce the unnecessary use of Social

Security numbers (SSNs), the most valuable commodity for an identity

thief;

that national standards should be established to require private sector

entities to safeguard the personal data they compile and maintain and

to provide notice to consumers when a breach occurs that poses a

significant risk of identity theft;

that federal agencies should implement a broad, sustained awareness

campaign to educate consumers, the private sector, and the public sector

on deterring, detecting, and defending against identity theft; and

that a National Identity Theft Law Enforcement Center should be

created to allow law enforcement agencies to coordinate their efforts

and information more efficiently, and investigate and prosecute identity

thieves more effectively.

The Task Force believes that all of the recommendations in this strategic

plan—from these broad policy changes to the small steps—are necessary to

wage a more effective fight against identity theft and reduce its incidence and

damage. Some recommendations can be implemented relatively quickl

others will take time and the sustained cooperation of government entities

and the private sector. Following are the recommendations of the President

Task Force on Identity Theft:

PREVENTION: Keeping Co

Hads

Identity theft depends on access to consumer data. Reducing the opportunities for thieves to get the data is critical to fighting the crime. Governm

the business community, and consumers have roles to play in protecting data.

EXECUTIVE SUMMARY


COMBATING IDENTITY THEFT A Strategic Plan

Data compromises can expose consumers to the threat of identity theft or

related fraud, damage the reputation of the entity that experienced the breach,

and carry financial costs for everyone involved. While “perfect security” do

not exist, all entities that collect and maintain sensitive consumer information

must take reasonable and appropriate steps to protect it.

Data Security in Public Sector

Decrease the Unnecessary Use of Social Security Numbers in the 

Public Sector by Developing Alternative Strategies for Identity 

Management

•	 Survey current use of SSNs by federal government

•	 Issue guidance on appropriate use of SSNs	

•	 Establish clearinghouse for “best” agency practices that minimize

use of SSNs

•	 Work with state and local governments to review use of SSNs

Educate Federal Agencies on How to Protect Data; Monitor Their 

Compliance with Existing Guidance

•	 Develop concrete guidance and best practices

•	 Monitor agency compliance with data security guidance

•	 Protect portable storage and communications devices

Ensure Effective, Risk-Based Responses to Data Breaches Suffered by 

Federal Agencies

•	 Issue data breach guidance to agencies

•	 Publish a “routine use” allowing disclosure of information after a

breach to those entities that can assist in responding to the breach

Data Security in Private Sector

Establish National Standards for Private Sector Data Protection 

Requirements and Breach Notice Requirements 

Develop Comprehensive Record on Private Sector Use of Social 

Security Numbers

Better Educate the Private Sector on Safeguarding Data

•	 Hold regional seminars for businesses on safeguarding information

•	 Distribute improved guidance for private industry

Initiate Investigations of Data Security Violations


Initiate a Multi-Year Public Awareness Campaign

•	 Develop national awareness campaign

•	 Enlist outreach partners

•	 Increase outreach to traditionally underserved communities

•	 Establish “Protect Your Identity” Days

Develop Online Clearinghouse for Current Educational Resources

PREVENTION: Making It H

Consu

Because security systems are imperfect and thieves are resourceful, it is essential to reduce the opportunities for criminals to misuse the data they steal.

An identity thief who wants to open new accounts in a victim’s name must

be able to (1) provide identifying information to allow the creditor or other

grantor of benefits to access information on which to base a decision about

eligibility; and (2) convince the creditor that he is the person he purports to be.

Authentication includes determining a person’s identity at the beginning of

a relationship (sometimes called verification), and later ensuring that he is

the same person who was originally authenticated. But the process can fai

Identity documents can be falsified; the accuracy of the initial information

and the accuracy or quality of the verifying sources can be questionable; employee training can be insufficient; and people can fail to follow procedures.

Efforts to facilitate the development of better ways to authenticate consumers without burdening consumers or businesses—for example, multi-factor

authentication or layered security—would go a long way toward preventing

criminals from profiting from identity theft.

Hold Workshops on Authentication

•	 Engage academics, industry, entrepreneurs, and government

experts on developing and promoting better ways to authenticate

identity

•	 Issue report on workshop findings

Develop a Comprehensive Record on Private Sector Use of SSNs

VICTIM RECOVERY: Helpin

Thei

Identity theft can be committed despite a consumer’s best efforts at securing

information. Consumers have a number of rights and resources available,

but some surveys indicate that they are not as well-informed as they could

be. Government agencies must work together to ensure that victims have t

knowledge, tools, and assistance necessary to minimize the damage and begin

the recovery process.

EXECUTIVE SUMMARY


COMBATING IDENTITY THEFT A Strategic Plan

Provide Specialized Training About Victim Recovery to First 

Responders and Others Offering Direct Assistance to Identity Theft 

Victims

•	 Train law enforcement officers

•	 Provide educational materials for first responders that can be used

as a reference guide for identity theft victims

•	 Create and distribute an ID Theft Victim Statement of Rights

•	 Design nationwide training for victim assistance counselors

Develop Avenues for Individualized Assistance to Identity Theft 

Victims

Amend Criminal Restitution Statutes to Ensure That Victims Recover 

the Value of Time Spent in Trying to Remediate the Harms Suffered

Assess Whether to Implement a National System That Allows Victims 

to Obtain an Identification Document for Authentication Purposes 

Assess Efficacy of Tools Available to Victims

•	 Conduct assessment of FACT Act remedies under FCRA

•	 Conduct assessment of state credit freeze laws

LAW ENFORCEMENT: Proec

Ide

Strong criminal law enforcement is necessary to punish and deter identity

thieves. The increasing sophistication of identity thieves in recent years h

meant that law enforcement agencies at all levels of government have had to

increase the resources they devote to investigating related crimes. The investigations are labor-intensive and generally require a staff of detectives, agent

and analysts with multiple skill sets. When a suspected theft involves a lar

number of potential victims, investigative agencies often need additional personnel to handle victim-witness coordination.

Coordination and Information/Intelligence Sharing

Establish a National Identity Theft Law Enforcement Center

Develop and Promote the Use of a Universal Identity Theft Report 

Form

Enhance Information Sharing Between Law Enforcement and the 

Private Sector

•	 Enhance ability of law enforcement to receive information from

financial institutions

•	 Initiate discussions with financial services industry on

countermeasures to identity theft

•	 Initiate discussions with credit reporting agencies on preventing

identity theft


Coordination with Foreign Law Enforcement

Encourage Other Countries to Enact Suitable Domestic Legislation 

Criminalizing Identity Theft

Facilitate Investigation and Prosecution of International Identity 

Theft by Encouraging Other Nations to Accede to the Convention on 

Cybercrime

Identify the Nations that Provide Safe Havens for Identity Thieves 

and Use All Measures Available to Encourage Those Countries to 

Change Their Policies

Enhance the United States Government’s Ability to Respond to 

Appropriate Foreign Requests for Evidence in Criminal Cases 

Involving Identity Theft

Assist, Train, and Support Foreign Law Enforcement 

Prosecution Approaches and Initiatives

Increase Prosecutions of Identity Theft

•	 Designate an identity theft coordinator for each United States

Attorney’s Office to design a specific identity theft program for

each district

•	 Evaluate monetary thresholds for prosecution

•	 Encourage state prosecution of identity theft

•	 Create working groups and task forces

Conduct Targeted Enforcement Initiatives

•	 Conduct enforcement initiatives focused on using unfair or

deceptive means to make SSNs available for sale

•	 Conduct enforcement initiatives focused on identity theft related to

the health care system

•	 Conduct enforcement initiatives focused on identity theft by illegal

aliens

Review Civil Monetary Penalty Programs

EXECUTIVE SUMMARY


COMBATING IDENTITY THEFT A Strategic Plan

Gaps in Statutes Criminalizing Identity Theft 

Close the Gaps in Federal Criminal Statutes Used to Prosecute 

Identity Theft-Related Offenses to Ensure Increased Federal 

Prosecution of These Crimes

•	 Amend the identity theft and aggravated identity theft statutes

to ensure that identity thieves who misappropriate information

belonging to corporations and organizations can be prosecuted

•	 Add new crimes to the list of predicate offenses for aggravated

identity theft offenses

•	 Amend the statute that criminalizes the theft of electronic data by

eliminating the current requirement that the information must have

been stolen through interstate communications

•	 Penalize creators and distributors of malicious spyware and

keyloggers

•	 Amend the cyber-extortion statute to cover additional, alternate

types of cyber-extortion

Ensure That an Identity Thief’s Sentence Can Be Enhanced When the 

Criminal Conduct Affects More Than One Victim

Law Enforcement Training

Enhance Training for Law Enforcement Officers and Prosecutors

•	 Develop course at National Advocacy Center focused on

investigation and prosecution of identity theft

•	 Increase number of regional identity theft seminars

•	 Increase resources for law enforcement on the Internet

•	 Review curricula to enhance basic and advanced training on

identity theft

Measuring the Success of Law Enforcement

Enhance the Gathering of Statistical Data Impacting the Criminal 

Justice System’s Response to Identity Theft

•	 Gather and analyze statistically reliable data from identity theft

victims

•	 Expand scope of national crime victimization survey

•	 Review U.S. Sentencing Commission data

•	 Track prosecutions of identity theft and resources spent

•	 Conduct targeted surveys
1

II. The Contours of the Identity Theft Problem

THE CONTOURS OF THE 

IDENTITY THEFT PROBLEM

Every day, too many Americans learn that their identities have been

compromised, often in ways and to an extent they could not have imagined.

Identity theft victims experience a sense of hopelessness when someone steals

their good name and good credit to commit fraud. These victims also spe

of their frustration in fighting against an unknown opponent.

Identity theft—the misuse of another individual’s personal information to

commit fraud—can happen in a variety of ways, but the basic elements are

the same. Criminals first gather personal information, either through low-te

methods such as stealing mail or workplace records, or “dumpster diving,”

or through complex and high-tech frauds such as hacking and the use of

malicious computer code. These data thieves then sell the information 

use it themselves to open new credit accounts, take over existing accounts,

obtain government benefits and services, or even evade law enforcement by

using a new identity. Often, individuals learn that they have become victi

of identity theft only after being denied credit or employment, or when a debt

collector seeks payment for a debt the victim did not incur.

Individual victim experiences best portray the havoc that identity thieves

can wreak. For example, in July 2001, an identity thief gained control of

retired Army Captain’s identity when Army officials at Fort Bragg, North

Carolina, issued the thief an active duty military identification card in the

retired captain’s name and with his Social Security number. The milita

identification, combined with the victim’s then-excellent credit history,

allowed the identity thief to go on an unhindered spending spree lasting

several months. From July to December 2001, the identity thief acquir

goods, services, and cash in the victim’s name valued at over $260,000. T

victim identified more than 60 fraudulent accounts of all types that were

opened in his name: credit accounts, personal and auto loans, checking a

savings accounts, and utility accounts. The identity thief purchased t

trucks valued at over $85,000 and a Harley-Davidson motorcycle for $25,000.

The thief also rented a house and purchased a time-share in Hilton Head,

South Carolina, in the victim’s name.4

In another instance, an elderly woman suffering from dementia was

victimized by her caregivers, who admitted to stealing as much as $200,000

from her before her death. The thieves not only used the victim’s existi

credit card accounts, but also opened new credit accounts in her name,

obtained financing in her name to purchase new vehicles for themselves,

and, using a fraudulent power of attorney, removed $176,000 in U.S. Savings

Bonds from the victim’s safe-deposit boxes.5

In these ways and others, consumers’ lives are disrupted and displaced by

identity theft. While federal agencies, the private sector, and consume

themselves already have accomplished a great deal to address the causes

“I was absolutely heartsick 

to realize our bank accounts 

were frozen, our names 

were on a bad check list, 

and my driver’s license was 

suspended. I hold three 

licenses in the State of 

Ohio—my driver’s license, 

my real estate license, 

and my R.N. license. After 

learning my driver’s license 

was suspended, I was 

extremely fearful that my 

professional licenses might 

also be suspended as a 

result of the actions of my 

imposter.”

Maureen Mitchell

Testimony Before 

House Committee on 

Financial Services, 

Subcommittee on 

Financial Institutions and 

Consumer Credit

June 24, 2003
COMBATING IDENTITY THEFT A Strategic Plan

and impact of identity theft, much work remains to be done. The followi

strategic plan focuses on a coordinated government response to: strength

efforts to prevent identity theft; investigate and prosecute identity theft; raise

awareness; and ensure that victims receive meaningful assistance.	

A. Prealnce

There is considerable debate about the prevalence and cost of identity theft in

the United States. Numerous studies have attempted to measure the exte

of this crime. DOJ, FTC, the Gartner Group, and Javelin Research are ju

some of the organizations that have published reports of their identity theft

surveys.6While some of the data from these surveys differ, there is agreeme

that identity theft exacts a serious toll on the American public.

Although greater empirical research is needed, the data show that annual

monetary losses are in the billions of dollars. This includes losses associat

with new account fraud, a more costly, but less prevalent form of identity

theft, and misuse of existing accounts, a more prevalent but less costly form

of identity theft. Businesses suffer most of the direct losses from both for

of identity theft because individual victims generally are not held responsible

for fraudulent charges. Individual victims, however, also collectively spe

billions of dollars recovering from the effects of the crime.

In addition to the losses that result when identity thieves fraudulently open

accounts or misuse existing accounts, monetary costs of identity theft include

indirect costs to businesses for fraud prevention and mitigation of the harm

once it has occurred (e.g., for mailing notices to consumers and upgrading

systems). Similarly, individual victims often suffer indirect financial cost

including the costs incurred in both civil litigation initiated by creditors and

in overcoming the many obstacles they face in obtaining or retaining credit.

Victims of non-financial identity theft, for example, health-related or criminal

record fraud, face other types of harm and frustration.

In addition to out-of-pocket expenses that can reach thousands of dollars for

the victims of new account identity theft, and the emotional toll identity theft

can take, some victims have to spend what can be a considerable amount

of time to repair the damage caused by the identity thieves. Victims of n

account identity theft, for example, must correct fraudulent information

in their credit reports and monitor their reports for future inaccuracies,

close existing bank accounts and open new ones, and dispute charges with

individual creditors.

Consumers’ fears of becoming identity theft victims also may harm our

digital economy. In a 2006 online survey conducted by the Business Softwa

Alliance and Harris Interactive, nearly one in three adults (30 percent) said

that security fears compelled them to shop online less or not at all during the

2005/2006 holiday season.7Similarly, a Cyber Security Industry Allian
survey in June 2005 found that 48 percent of consumers avoided making

purchases on the Internet because they feared that their financial information

might be stolen.8Although no studies have correlated these attitudes wi

actual online buying habits, these surveys indicate that security concerns

likely inhibit some commercial use of the Internet.

B. Identty Thi

Unlike some groups of criminals, identity thieves cannot be readily classified. No surveys provide comprehensive data on their primary personal 

demographic characteristics. For the most part, victims are not in a go

position to know who stole their information or who misused it. Accordi

to the FTC’s 2003 survey of identity theft, about 14 percent of victims claim

to know the perpetrator, who may be a family member, friend, or in-home

employee.

Identity thieves can act alone or as part of a criminal enterprise. Each pos

unique threats to the public.

Individuals

According to law enforcement agencies, identity thieves often have no prior

criminal background and sometimes have pre-existing relationships with the

victims. Indeed, identity thieves have been known to prey on people th

know, including coworkers, senior citizens for whom they are serving as caretakers, and even family members. Some identity thieves rely on techniques 

minimal sophistication, such as stealing mail from homeowners’ mailboxes or

trash containing financial documents. In some jurisdictions, identity theft 

illegal immigrants has resulted in passport, employment, and Social Security

fraud. Occasionally, small clusters of individuals with no significant crimin

records work together in a loosely knit fashion to obtain personal information

and even to create false or fraudulent documents.9

A number of recent reports have focused on the connection between

individual methamphetamine (“meth”) users and identity theft.10 L

enforcement agencies in Albuquerque, Honolulu, Phoenix, Sacramento,

Seattle, and other cities have reported that meth addicts are engaging in

identity and data theft through burglaries, mail theft, and theft of wallets

and purses. In Salt Lake City, meth users reportedly are organized by whitesupremacist gangs to commit identity theft.11 Tellingly, as meth use has r

sharply in recent years, especially in the western United States, some of the

same jurisdictions reporting the highest levels of meth use also suffer from

the highest incidence of identity theft. Some state law enforcement officia

believe that the two increases might be related, and that identity theft may

serve as a major funding mechanism for meth labs and purchases.	

THE CONTOURS OF THE 

IDENTITY THEFT PROBLEM

In an article entitled 

“­Waitress Gets Own I

When Carding Patron,” the 

Associated Press reported 

that a bar waitress checking 

to see whether a patron was 

old enough to legally drink 

alcohol was handed her own 

stolen driver’s license, which 

she reported missing weeks 

earlier in Lakewood, Ohio. 

The patron was later charged 

with identity theft and 

receiving stolen property. 

In September 2005, a 

defendant was sentenced by 

a federal judge in Colorado 

to a year and one day in 

prison, and ordered to pay 

$181,517.05 in restitution, 

after pleading guilty to the 

misuse of a Social Security 

number. The defendant had 

obtained the identifying 

information of two 

individuals, including their 

SSNs, and used one such 

identity to obtain a false 

Missouri driver’s license, to 

cash counterfeit checks, and 

to open fraudulent credit accounts. The defendant used 

the second identity to open a 

fraudulent credit account and 

to cash fraudulent checks. 

The case was investigated by 

the SSA OIG, FBI, U.S. Postal 

Inspection Service, and the 

St. Charles, Missouri, Police 

Department.
COMBATING IDENTITY THEFT A Strategic Plan

Significant Criminal Groups and Organizations

Law enforcement agencies around the country have observed a steady

increase in the involvement of groups and organizations of repeat offenders or

career criminals in identity theft. Some of these groups—including nation

gangs such as Hell’s Angels and MS-13—are formally organized, have a

hierarchical structure, and are well-known to law enforcement because of

their longstanding involvement in other major crimes such as drug trafficking.

Other groups are more loosely-organized and, in some cases, have taken

advantage of the Internet to organize, contact each other, and coordinate their

identity theft activities more efficiently. Members of these groups often a

located in different countries and communicate primarily via the Internet.

Other groups have a real-world connection with one another and share a

nationality or ethnic group.

Law enforcement agencies also have seen increased involvement of foreign

organized criminal groups in computer- or Internet-related identity theft

schemes. In Asia and Eastern Europe, for example, organized groups a

increasingly sophisticated both in the techniques they use to deceive Internet

users into disclosing personal data, and in the complexity of tools they use,

such as keyloggers (programs that record every keystroke as an Internet user

logs onto his computer or a banking website), spyware (software that covertly

gathers user information through the user’s Internet connection, without

the user’s knowledge), and botnets (networks of computers that criminals

have compromised and taken control of for some other purpose, ranging

from distribution of spam and malicious computer code to attacks on other

computers). According to law enforcement agencies, such groups also a

demonstrating increasing levels of sophistication and specialization in their

online crime, even selling goods and services—such as software templates

for making counterfeit identification cards and payment card magnetic strip

encoders—that make the stolen data even more valuable to those who have it.

C. How Identity 

 th

Consumer information is the currency of identity theft, and perhaps the most

valuable piece of information for the thief is the SSN. The SSN and a na

can be used in many cases to open an account and obtain credit or other

benefits in the victim’s name. Other data, such as personal identificati

numbers (PINs), account numbers, and passwords, also are valuable because

they enable thieves to access existing consumer accounts.

Identity theft is prevalent in part because criminals are able to obtain personal

consumer information everywhere such data are located or stored. Hom

and businesses, cars and health-club lockers, electronic networks, and even

trash baskets and dumpsters have been targets for identity thieves. So

In July 2003, a Russian 

computer hacker was 

sentenced in federal court to 

a prison term of four years 

for supervising a criminal 

enterprise in Russia dedicated 

to computer hacking, fraud, 

and extortion. The defendant 

hacked into the computer system of Financial Services, Inc. 

(FSI), an internet web hosting 

and electronic banking 

processing company located 

in Glen Rock, New Jersey, 

and stole 11 passwords used 

by FSI employees to access 

the FSI computer network as 

well as a text file containing 

approximately 3,500 credit 

card numbers and associated 

card holder information for 

FSI customers. One of the 

defendant’s accomplices 

then threatened FSI that the 

hacker group would publicly 

release this stolen credit card 

information and hack into 

and further damage the FSI 

computer system unless FSI 

paid $6,000. After a period 

of negotiation, FSI eventually 

agreed to pay $5,000. 

In sentencing the defendant, 

the federal judge described 

the scheme as an “unprecedented, wide-ranging, 

organized criminal enterprise” 

that “engaged in numerous 

acts of fraud, extortion, 

and intentional damage 

to the property of others, 

involving the sophisticated 

manipulation of computer 

data, financial information, 

and credit card numbers.” 

The court found that the 

defendant was responsible 

for an aggregate loss to his 

victims of approximately 

$25 million.
thieves use more technologically-advanced means to extract information from

computers, including malicious-code programs that secretly log information

or give criminals access to it.	

The following are among the techniques most frequently used by identity

thieves to steal the personal information of their victims.

Common Theft and Dumpster Diving

While often considered a “high tech” crime, data theft often is no more

sophisticated than stealing paper documents. Some criminals steal documen

containing personal information from mail boxes; indeed, mail theft appears

to be a common way that meth users and producers obtain consumer data.12

Other identity thieves simply take documents thrown into unprotected trash

receptacles, a practice known as “dumpster diving.”13 Still others ste

information using techniques no more sophisticated than purse snatching.

Progress is being made in reducing the opportunities that identity thieves have

to obtain personal information in these ways. The Fair and Accurate Cred

Transactions Act of 2003 (FACT Act)14 requires merchants that accept

THE CONTOURS OF THE 

IDENTITY THEFT PROBLEM

Partial display of credit cards, checks, and identifying documents seized in federal investigation of identity theft ring 

in Maryland, 2005.

Source: U.S. Department of Justice

A ramp agent for a major 

airline participated in a 

scheme to steal financial 

documents, including checks 

and credit cards, from 

the U.S. mail at Thurgood 

Marshall Baltimore-Washington International Airport 

and transfer those financial 

documents to his coconspirators for processing. 

The conspirators used the 

documents to obtain cash 

advances and withdrawals 

from lines of credit. In 

September 2005, a federal 

judge sentenced the ramp 

agent to 14 years in prison 

and ordered him to pay $7 

million in restitution.
COMBATING IDENTITY THEFT A Strategic Plan

credit or debit cards to truncate the numbers on receipts that are electronically

printed—a measure that is intended, among other things, to reduce the

ability of a “dumpster diver” to obtain a victim’s credit card number simply

by looking through that victim’s discarded trash. Merchants had a period 

time to comply with that requirement, which now is in full effect.15

Employee/Insider Theft

Dishonest insiders can steal sensitive consumer data by removing paper

documents from a work site or accessing electronic records. Criminals al

may bribe insiders, or become employees themselves to access sensitive data

at companies. The failure to disable a terminated employee’s access to

computer system or confidential databases contained within the system also

could lead to the compromise of sensitive consumer data. Many feder

agencies have taken enforcement actions to punish and deter such insider

compromise.

Electronic Intrusions or Hacking

Hackers steal information from public and private institutions, including

large corporate databases and residential wireless networks. First, they c

intercept data during transmission, such as when a retailer sends payment

card information to a card processor. Hackers have developed tools 

penetrate firewalls, use automated processes to search for account data or

other personal information, export the data, and hide their tracks.16 Sever

recent government enforcement actions have targeted this type of data theft.

Second, hackers also can gain access to underlying applications—programs

used to “communicate” between Internet users and a company’s internal

databases, such as programs to retrieve product information. One resear

firm estimates that nearly 75 percent of hacker attacks are targeted at the

application, rather than the network.17 It is often difficult to detect t

hacker’s application-level activities, because the hacker connects to the

website through the same legitimate route any customer would use, and the

communication is thus seen as permissible activity.

According to the Secret Service, many major breaches in the credit card

system in 2006 originated in the Russian Federation and the Ukraine, and

criminals operating in those two countries have been directly involved in some

of the largest breaches of U.S. financial systems for the past five years.

Social Engineering: Phishing, Malware/Spyware, and Pretexting

Identity thieves also use trickery to obtain personal information from

unwitting sources, including from the victim himself. This type of deceptio

known as “social engineering,” can take a variety of forms.

In December 2003, the 

Office of the Comptroller 

of the Currency (OCC) 

directed a large financial 

institution to improve its 

employee screening policies, 

procedures, systems, and 

controls after finding that the 

institution had inadvertently 

hired a convicted felon who 

used his new post to 

engage in identity theftrelated crimes. Deficiencies 

in the institution’s screening 

practices came to light 

through the OCC’s review 

of the former employee’s 

activities.

In December 2004, a 

federal district judge in 

North Carolina sentenced a 

defendant to 108 months in 

prison after he pleaded guilty 

to crimes stemming from his 

unauthorized access to the 

nationwide computer system 

used by the Lowe’s Corporation to process credit card 

transactions. To carry out 

this scheme, the defendant 

and at least one other person 

secretly compromised the 

wireless network at a Lowe’s 

retail store in Michigan and 

gained access to Lowe’s 

central computer system. 

The defendant then installed 

a computer program designed to capture customer 

credit card information on 

the computer system of 

several Lowe’s retail stores. 

After an FBI investigation of 

the intrusion, the defendant 

and a confederate were 

charged.
Phishing: “Phishing” is one of the most prevalent forms of social engineering.

Phishers send emails that appear to be coming from legitimate, wellknown sources—often, financial institutions or government agencies. 

one example, these email messages tell the recipient that he must verify

his personal information for an account or other service to remain active.

The emails provide a link, which goes to a website that appears legitimate.

After following the link, the web user is instructed to enter personal

identifying information, such as his name, address, account number, PIN,

and SSN. This information is then harvested by the phishers. In a var

of this practice, victims receive emails warning them that to avoid losing

something of value (e.g., Internet service or access to a bank account) or to

get something of value, they must click on a link in the body of the email

to “reenter” or “validate” their personal data. Such phishing schemes oft

mimic financial institutions’ websites and emails, and a number of them

have even mimicked federal government agencies to add credibility to their

demands for information. Additionally, phishing recently has taken on

new form, dubbed “vishing,” in which the thieves use Voice Over Internet

Protocol (VOIP) technology to spoof the telephone call systems of financial

institutions and request callers provide their account information.18

Malware/Spyware/Keystroke Loggers: Criminals also can use spyware to

illegally gain access to Internet users’ computers and data without the users’

permission. One email-based form of social engineering is the use of entici

emails offering free pornographic images to a group of victims; by opening

the email, the victim launches the installation of malware, such as spyware or

keystroke loggers, onto his computer. The keystroke loggers gather and se

information on the user’s Internet sessions back to the hacker, including user

names and passwords for financial accounts and other personal information.

These sophisticated methods of accessing personal information through

THE CONTOURS OF THE 

IDENTITY THEFT PROBLEM

“Phishing” Email and Associated Website Impersonating National Credit 

Union Administration Email and Website

Source: Anti-Phishing Working Group

At the beginning of the 2006 

tax filing season, identity 

thieves sent emails that purported to originate from the 

IRS’s website to taxpayers, 

falsely informing them that 

there was a problem with 

their tax refunds. The emails 

requested that the taxpayers 

provide their SSNs so that 

the IRS could match their 

identities to the proper tax 

accounts. In fact, when the 

users entered their personal 

information – such as their 

SSNs, website usernames 

and passwords, bank or 

credit-card account numbers 

and expiration dates, among 

other things – the phishers 

simply harvested the data 

at another location on the 

Internet. Many of these 

schemes originated abroad, 

particularly in Eastern 

Europe. Since November 

2005, the Treasury Inspector 

General for Tax Administration (TIGTA) and the IRS 

have received over 17,500 

complaints about phishing 

scams, and TIGTA has 

identified and shut down 

over 230 phishing host sites 

targeting the IRS.
COMBATING IDENTITY THEFT A Strategic Plan

malware have supplemented other long-established methods by which

criminals obtain victims’ passwords and other useful data—such as “sniffing”

Internet traffic, for example, by listening to network traffic on a shared

physical network, or on unencrypted or weakly encrypted wireless networks.

Pretexting: Pretexting19 is another form of social engineering used to obtain

sensitive information. In many cases, pretexters contact a financial instituti

or telephone company, impersonating a legitimate customer, and request that

customer’s account information. In other cases, the pretext is accomplish

by an insider at the financial institution, or by fraudulently opening an online

account in the customer’s name.20

Stolen Media 

In addition to instances of deliberate theft of personal information, data also

can be obtained by identity thieves in an “incidental” manner. Crimina

frequently steal data storage devices, such as laptops or portable media, that

contain personal information.21 Although the criminal originally target

the hardware, he may discover the stored personal information and realize its

value and possibility for exploitation. Unless adequately safeguarded—su

as through the use of technological tools for protecting data—this information

can be accessed and used to steal the victim’s identity. Identity thieves al

may obtain consumer data when it is lost or misplaced.

Failure to “Know Your Customer”

Data brokers compile consumer information from a variety of public and

private sources and then offer it for sale to different entities for a range of

purposes. For example, government agencies often purchase consum

information from data brokers to locate witnesses or beneficiaries, or for

law enforcement purposes. Identity thieves, however, can steal person

information from data brokers who fail to ensure that their customers have a

legitimate need for the data.

The Fair Credit Reporting Act (FCRA) and the Gramm-Leach-Bliley Act

(GLB Act) impose specific duties on certain types of data brokers that

disseminate particular types of information.22 For example, the FC

requires data brokers that are consumer reporting agencies to make reasonable

efforts to verify the identity of their customers and to ensure that those

customers have a permissible purpose for obtaining the information. T

GLB Act limits the ability of a financial institution to resell covered financial

information.

Existing laws, however, do not reach every kind of personal information

collected and sold by data brokers. In addition, when data brokers fail 

comply with their statutory duties, they open the door to criminals who can

access the personal information held by the data brokers by exploiting poor

customer verification practices.

In January 2006, the FTC 

settled a lawsuit against 

data broker ChoicePoint, 

Inc., alleging that it violated 

the FCRA when it failed to 

perform due diligence in 

evaluating and approving 

new customers. The FTC 

alleged that ChoicePoint 

approved as customers 

for its consumer reports 

identity thieves who lied 

about their credentials and 

whose applications should 

have raised obvious red 

flags. Under the settlement, 

ChoicePoint paid $10 million 

in civil penalties and $5 million in consumer redress and 

agreed to implement new 

procedures to ensure that it 

provides consumer reports 

only to legitimate businesses 

for lawful purposes, to 

establish a comprehensive 

information security program, and to obtain audits 

by an independent security 

professional every other year 

until 2026. 
“Skimming”

Because it is possible to use someone’s credit account without having physical

access to the card, identity theft is easily accomplished when a criminal

obtains a receipt with the credit account number, or uses other technology to

collect that account information.23 For example, over the past several year

law enforcement authorities have witnessed a substantial increase in the use

of devices known as “skimmers.” A skimmer is an inexpensive electron

device with a slot through which a person passes or “skims” a credit or debit

card. Similar to the device legitimate businesses use in processing custom

card payments, the skimmer reads and records the magnetically encoded

data on the magnetic stripe on the back of the card. That data then c

be downloaded either to make fraudulent copies of real cards, or to make

purchases when the card is not required, such as online. A retail employe

such as a waiter, can easily conceal a skimmer until a customer hands him

a credit card. Once he is out of the customer’s sight, he can skim the ca

through the device, and then swipe it through the restaurant’s own card reader

to generate a receipt for the customer to sign. The waiter then can pass t

recorded data to an accomplice, who can encode the data on blank cards with

magnetic stripes. A variation of skimming involves an ATM-mounted devi

that is able to capture the magnetic information on the consumer’s card, as

well as the consumer’s password.

D. What Identty

They Steal: Te D

Once they obtain victims’ personal information, criminals misuse it in endless

ways, from opening new accounts in the victim’s name, to accessing the

victim’s existing accounts, to using the victim’s name when arrested. Rece

survey data show that misuse of existing credit accounts, however, represents

the single largest category of fraud.

Misuse of Existing Accounts

Misuse of existing accounts can involve credit, brokerage, banking, or utility

accounts, among others. The most common form, however, involves cred

accounts. This occurs when an identity thief obtains either the actual cred

card, the numbers associated with the account, or the information derived

from the magnetic strip on the back of the card. Because it is possible 

make charges through remote purchases, such as online sales or by telephone,

identity thieves are often able to commit fraud even as the card remains in the

consumer’s wallet.

THE CONTOURS OF THE 

IDENTITY THEFT PROBLEM

A “skimmer”

Source: Durham, Ontario Police

In March 2006, a former 

candidate for the presidency 

of Peru pleaded guilty in 

a federal district court to 

charges relating to a largescale credit card fraud and 

money laundering conspiracy. 

The defendant collected 

stolen credit card numbers 

from people in Florida who 

had used skimmers to 

obtain the information from 

customers of retail businesses where they worked, 

such as restaurants and 

rental car companies. He 

used some of the credit card 

fraud proceeds to finance 

various trips to Peru during 

his candidacy.
COMBATING IDENTITY THEFT A Strategic Plan

Recent complaint data suggest an increasing number of incidents involving

unauthorized access to funds in victims’ bank accounts, including checking

accounts—sometimes referred to as “account takeovers.”24 The Post

Inspection Service reports that it has seen an increase in account takeovers

originating outside the United States. Criminals also have attempted to acce

funds in victims’ online brokerage accounts.25

Federal law limits the liability consumers face from existing account misuse,

generally shielding victims from direct losses due to fraudulent charges to

their accounts. Nevertheless, consumers can spend many hours disputing t

charges and making other corrections to their financial records.26

New Account Fraud

A more serious, if less prevalent, form of identity theft occurs when thieves

are able to open new credit, utility, or other accounts in the victim’s name,

make charges indiscriminately, and then disappear. Victims often do not lea

of the fraud until they are contacted by a debt collector or are turned down for

a loan, a job, or other benefit because of a negative credit rating. While this is

a less prevalent form of fraud, it causes more financial harm, is less likely to

be discovered quickly by its victims, and requires the most time for recovery.

Criminal’s skimmer, mounted and colored to resemble exterior of real ATM. A pinhole camera is mounted inside a 

plastic brochure holder to capture customer’s keystrokes.

Source: University of Texas Police Department

In December 2005, a highly 

organized ring involved in 

identity theft, counterfeit 

credit and debit card fraud, 

and fencing of stolen 

products was shut down 

when Postal Inspectors 

and detectives from the 

Hudson County, New Jersey, 

Prosecutor’s Office arrested 

13 of its members. The 

investigation, which began in 

June 2005, uncovered more 

than 2,000 stolen identities 

and at least $1.3 million 

worth of fraudulent transactions. The investigation 

revealed an additional $1 

million in fraudulent credit 

card purchases in more than 

30 states and fraudulent 

ATM withdrawals. The account information came from 

computer hackers outside 

the United States who were 

able to penetrate corporate 

databases. Additionally, the 

ring used counterfeit bank 

debit cards encoded with 

legitimate account numbers 

belonging to unsuspecting 

victims to make fraudulent 

withdrawals of hundreds of 

thousands of dollars from 

ATMs in New Jersey, New 

York, and other states.
2

When criminals establish new credit card accounts in others’ names, the

sole purpose is to make the maximum use of the available credit from those

accounts, whether in a short time or over a longer period. By contrast, wh

criminals establish new bank or loan accounts in others’ names, the fraud

often is designed to obtain a single disbursement of funds from a financial

institution. In some cases, the criminal deposits a check drawn on an acco

with insufficient funds, or stolen or counterfeit checks, and then withdraws

cash.

“Brokering” of Stolen Data

Law enforcement has also witnessed an increase in the marketing of personal

identification data from compromised accounts by criminal data brokers. F

example, certain websites, known as “carding sites,” traffic in large quantities

of stolen credit-card data. Numerous individuals, often located in differe

countries, participate in these carding sites to acquire and review newly

acquired card numbers and supervise the receipt and distribution of those

numbers. The Secret Service calculated that the two largest current cardi

sites collectively have nearly 20,000 member accounts.

Immigration Fraud

In various parts of the country, illegal immigrants use fraudulently obtained

SSNs or passports to obtain employment and assimilate into society. 

extreme cases, an individual SSN may be passed on to and used by many

illegal immigrants.27 Although victims of this type of identity theft m

not necessarily suffer financial harm, they still must spend hour upon hour

attempting to correct their personal records to ensure that they are not

mistaken for an illegal immigrant or cheated out of a government benefit.

Medical Identity Theft

Recent reports have brought attention to the problem of medical identity

theft, a crime in which the victim’s identifying information is used to obtain

or make false claims for medical care.28 In addition to the financial ha

associated with other types of identity theft, victims of medical identity

theft may have their health endangered by inaccurate entries in their medical

records. This inaccurate information can potentially cause victims to recei

improper medical care, have their insurance depleted, become ineligible for

health or life insurance, or become disqualified from some jobs. Victims m

not even be aware that a theft has occurred because medical identity theft

can be difficult to discover, as few consumers regularly review their medical

records, and victims may not realize that they have been victimized until they

receive collection notices, or they attempt to seek medical care themselves,

only to discover that they have reached their coverage limits.

THE CONTOURS OF THE 

IDENTITY THEFT PROBLEM

Federal identity theft charges 

were brought against 148 

illegal aliens accused of 

stealing the identities of lawful U.S. citizens in order to 

gain employment. The aliens 

being criminally prosecuted 

were identified as a result of 

Operation Wagon Train, an 

investigation led by agents 

from U.S. Immigration and 

Customs Enforcement (ICE), 

working in conjunction with 

six U.S. Attorney’s Offices. 

Agents executed civil search 

warrants at six meat 

processing plants. Numerous alien workers were 

arrested, and many were 

charged with aggravated 

identity theft, state identity 

theft, or forgery. Many of 

the names and Social 

Security numbers being 

used at the meat processing 

plants were reported stolen 

by identity theft victims to 

the FTC. In many cases, 

victims indicated that they 

received letters from the 

Internal Revenue Service 

demanding back taxes for 

income they had not reported 

because it was earned by 

someone working under their 

name. Other victims were 

denied driver’s licenses, 

credit, or even medical 

services because someone 

had improperly used their 

personal information before. 
COMBATING IDENTITY THEFT A Strategic Plan

Other Frauds

Identity theft is inherent in numerous other frauds perpetrated by criminals,

including mortgage fraud and fraud schemes directed at obtaining government

benefits, including disaster relief funds. The IRS’s Criminal Investigati

Division, for example, has seen an increase in the use of stolen SSNs to file

tax returns. In some cases, the thief files a fraudulent return seeking a refu

before the taxpayer files. When the real taxpayer files, the IRS may not acce

his return because it is considered a duplicate return. Even if the taxpay

ultimately is made whole, the government suffers the loss from paying

multiple refunds.

With the advent of the prescription drug benefit of Medicare Part D, the

Department of Health and Human Services’ Office of the Inspector General

(HHS OIG) has noted a growing incidence of health care frauds involving

identity theft. These frauds include telemarketers who fraudulently solic

potential Medicare Part D beneficiaries to disclose information such as

their Health Insurance Claim Number (which includes the SSN) and bank

account information, as well as marketers who obtain identities from nursing

homes and other adult care facilities (including deceased beneficiaries and

severely cognitively impaired persons) and use them fraudulently to enroll

unwilling beneficiaries in alternate Part D plans in order to increase their sales

commissions. The types of fraud that can be perpetrated by an identity thi

are limited only by the ingenuity and resources of the criminal.

Robert C. Ingardia, a 

registered representative 

who had been associated 

with several broker-dealers, 

assumed the identity of his 

customers. Without authorization, Mr. Ingardia changed 

the address information for 

their accounts, sold stock 

in the accounts worth more 

than $800,000, and, in an 

effort to manipulate the 

market for two thinly-traded 

penny stock companies, 

used the cash proceeds of 

the sales to buy more than 

$230,000 worth of stock 

in the companies. The 

SEC obtained a temporary 

restraining order against 

Mr. Ingardia in 2001, and a 

civil injunction against him 

in 2003 after the United 

States Attorney’s Office for 

the Southern District of New 

York obtained a criminal 

conviction against him 

in 2002.

In July 2006, DOJ charged 

a defendant with 66 counts 

of false claims to the 

government, mail fraud, 

wire fraud, and aggravated 

identity theft, relating to 

the defendant’s allegedly 

fraudulent applications for 

disaster assistance from 

the Federal Emergency 

Management Agency (FEMA) 

following Hurricane Katrina. 

Using fictitious SSNs and 

variations of her name, the 

defendant allegedly received 

$277,377 from FEMA.
A STRATEGY TO COMBAT

IDENTITY THEFT

III. A Strategy to Combat Identity Theft

Identity theft is a multi-faceted problem for which there is no simple solution.

Because identity theft has several stages in its “life cycle,” it must be attacked

at each of those stages, including:

when the identity thief attempts to acquire a victim’s personal

information;

when the thief attempts to misuse the information he has

acquired; and

after an identity thief has completed his crime and is enjoying the

benefits, while the victim is realizing the harm.

The federal government’s strategy to combat identity theft must address each

of these stages by:

keeping sensitive consumer data out of the hands of identity

thieves in the first place through better data security and by

educating consumers on how to protect it;

making it more difficult for identity thieves, when they are able to

obtain consumer data, to use the information to steal identities;

assisting victims in recovering from the crime; and

deterring identity theft by aggressively prosecuting and punishing

those who commit the crime.

A great deal already is being done to combat identity theft, but there are

several areas in which we can improve. The Task Force’s recommendation

as described below, are focused on those areas.

A. Prevntion:  Kee

Hads

Identity thieves can ply their trade only if they get access to consumer

data. Reducing the opportunities for identity thieves to obtain the data 

the first place is the first step to reducing identity theft. Government, t

business community, and consumers all play a role in protecting data.

Data compromises can expose consumers to the threat of identity theft

or related fraud, damage the reputation of the entity that experienced the

breach, and impose the risk of substantial costs for all parties involved.

Although there is no such thing as “perfect security,” some entities fail to

adopt even basic security measures, including many that are inexpensive

and readily available.

The link between a data breach and identity theft often is unclear.
COMBATING IDENTITY THEFT A Strategic Plan

Depending on the nature of the breach, the kinds of information

breached, and other factors, a particular breach may or may not pose a significant risk of identity theft. Little empirical evidence exists on the exte

to which, and under what circumstances, data breaches lead to identity

theft, and some studies indicate that data breaches and identity theft may

not be strongly linked.29 Nonetheless, because data thieves search for ri

targets of consumer data, it is critical that organizations that collect and

maintain sensitive consumer information take reasonable steps to protect

it and explore new technologies to prevent data compromises.

1. Decreasing the Unnecessary Use of Social

Security Num

The SSN is especially valuable to identity thieves, because often it is

the key piece of information used in authenticating the identities of

consumers. An identity thief with a victim’s SSN and certain oth

information generally can open accounts or obtain other benefits in the

victim’s name. As long as SSNs continue to be used for authenticati

purposes, it is important to prevent thieves from obtaining them.

SSNs are readily available to criminals because they are widely used as

consumer identifiers throughout the private and public sectors. Althou

originally created in 1936 to track workers’ earnings for social benefits

purposes, use of SSNs has proliferated over ensuing decades. In 1961, t

Federal Civil Service Commission established a numerical identification

system for all federal employees using the SSN as the identification

number. The next year, the IRS decided to begin using the SSN as i

taxpayer identification number (TIN) for individuals. Indeed, the use 

federal agencies of SSNs for the purposes of employment and taxation,

employment verification, and sharing of data for law enforcement

purposes, is expressly authorized by statute.

The simplicity and efficiency of using a seemingly unique number that

most people already possessed encouraged widespread use of the SSN as

an identifier by both government agencies and private enterprises, especially as they adapted their record-keeping and business systems to automated

data processing. The use of SSNs is now common in our societ

Employers must collect SSNs for tax reporting purposes. Doctors 

hospitals may need them to facilitate Medicare reimbursement. SS

also are used in internal systems to sort and track information about

individuals, and in some cases are displayed on identification cards.

In 2004, an estimated 42 million Medicare cards displayed the entire

SSN, as did approximately 8 million Department of Defense insurance

cards. In addition, although the Veterans Health Administration (VH

discontinued the issuance of Veterans Identification Cards that display

SSNs in March 2004, and has issued new cards that do not display SSNs,

In June 2006, a federal judge 

in Massachusetts sentenced 

a defendant to five years in 

prison after a jury convicted 

him of passport fraud, SSN 

fraud, aggravated identity 

theft, identification document fraud, and furnishing 

false information to the 

SSA. The defendant had 

assumed the identity of a 

deceased individual and then 

used fraudulent documents 

to have the name of the 

deceased legally changed 

to a third name. He then 

used this new name and 

SSN to obtain a new SSN 

card, driver’s licenses, and 

United States passport. The 

case was initiated based 

on information from the 

Joint Terrorism Task Force in 

Springfield, Massachusetts. 

The agencies involved in the 

investigation included SSA 

OIG, Department of State, 

Massachusetts State Police, 

and the Springfield and 

Boston police departments.
A STRATEGY TO COMBAT

IDENTITY THEFT

the VHA estimates that between 3 million and 4 million previously issued

cards containing SSNs remain in circulation with veterans receiving VA

health care services. Some universities still use the SSN as the student

identification number for a range of purposes, from administering loans

to tracking grades, and may place it on students’ identification cards,

although usage for these purposes is declining.	

SSNs also are widely available in public records held by federal agencies,

states, local jurisdictions, and courts. As of 2004, 41 states and t

District of Columbia, as well as 75 percent of U.S. counties, displayed

SSNs in public records.30 Although the number and type of records 

which SSNs are displayed vary greatly across states and counties, SSNs

are most often found in court and property records.

No single federal law regulates comprehensively the private sector or

government use, display, or disclosure of SSNs; instead, there are a variety

of laws governing SSN use in certain sectors or in specific situations.

With respect to the private sector, for example, the GLB Act restricts the

redisclosure to third parties of non-public personal information, such

as SSNs, that was originally obtained from customers of a financial

institution; the Health Insurance Portability and Accountability Act

(HIPAA) limits covered health care organizations’ disclosure of SSNs

without patient authorization; and the Driver’s Privacy Protection Act

prohibits state motor vehicle departments from disclosing SSNs, subject

to 14 “permissible uses.”31 In the public sector, the Privacy Act of 19

requires federal agencies to provide notice to, and obtain consent from,

individuals before disclosing their SSNs to third parties, except for an

established routine use or pursuant to another Privacy Act exception.32

A number of state statutes restrict the use and display of SSNs in certain

contexts.33 Even so, a report by the Government Accountability Offi

(GAO) concluded that, despite these laws, there were gaps in how the use

and transfer of SSNs are regulated, and that these gaps create a risk that

SSNs will be misused.34

There are many necessary or beneficial uses of the SSN. SSNs often a

used to match consumers with their records and databases, including their

credit files, to provide benefits and detect fraud. Federal, state, and loc

governments rely extensively on SSNs when administering programs that

deliver services and benefits to the public.

Although SSNs sometimes are necessary for legal compliance or to enable

disparate organizations to communicate about individuals, other uses are

more a matter of convenience or habit. In many cases, for example, 

may be unnecessary to use an SSN as an organization’s internal identifier

or to display it on an identification card. In these cases, a different uniq

identifier generated by the organization could be equally suitable, but

without the risk inherent in the SSN’s use as an authenticator.

In September 2006, a 

defendant was sentenced 

by a federal judge in 

Pennsylvania to six months 

in prison after pleading 

guilty to Social Security card 

misuse and possession of a 

false immigration document. 

The defendant provided 

a fraudulent Permanent 

Resident Alien card and a 

fraudulent Social Security 

card to a state trooper as 

evidence of authorized stay 

and employment in the 

United States. The case 

was investigated by the 

SSA’s Office of Inspector 

General (OIG), ICE, and the 

Pennsylvania State Police.
COMBATING IDENTITY THEFT A Strategic Plan

Some private sector entities and federal agencies have taken steps to reduce unnecessary use of the SSN. For example, with guidance from t

SSA OIG, the International Association of Chiefs of Police (IACP) adopted a resolution in September 2005 to end the practice of displaying SSNs

in posters and other written materials relating to missing persons. So

health insurance providers also have stopped using SSNs as the subscriber’s identification number.35 Additionally, the Department of Treasury

Financial Management Service no longer includes personal identification

numbers on the checks that it issues for benefit payments, federal income

tax refund payments, and payments to businesses for goods and services

provided to the federal government.

More must be done to eliminate unnecessary uses of SSNs. In particula

it would be optimal to have a unified and effective approach or standard

for use or display of SSNs by federal agencies. The Office of Personn

Management (OPM), which issues and uses many of the federal forms

and procedures using the SSN, and the Office of Management and Budget

(OMB), which oversees the management and administrative practices of

federal agencies, can play pivotal roles in restricting the unnecessary use

of SSNs, offering guidance on better substitutes that are less valuable to

identity thieves, and establishing greater consistency when the use of SSNs

is necessary or unavoidable.

RECOMMENDATION: DECREASE THE UNNECESSARY US

SOCIAL SECURITY NUMBERS IN THE PUBLIC 

To limit the unnecessary use of SSNs in the public sector—

and to begin to develop alternative strategies for identity

management—the Task Force recommends the following:

Complete Review of Use of SSNs. As recommended in the 

Force’s interim recommendations, OPM undertook a review of

the use of SSNs in its collection of human resource data from

agencies and on OPM-based papers and electronic forms. Bas

on that review, which OPM completed in 2006, OPM should

take steps to eliminate, restrict, or conceal the use of SSNs

(including assigning employee identification numbers where

practicable), in calendar year 2007. If necessary to impleme

this recommendation, Executive Order 9397, effective November

23, 1943, which requires federal agencies to use SSNs in “any

system of permanent account numbers pertaining to individuals,”

should be partially rescinded. The use by federal agencies 

SSNs for the purposes of employment and taxation, employment

verification, and sharing of data for law enforcement purposes,

however, is expressly authorized by statute and should continue

to be permitted.

When purchasing advertising 

space in a trade magazine 

in 2002, a Colorado man 

wrote his birth date and 

Social Security number on 

the payment check. The 

salesman who received 

the check then used this 

information to obtain surgery 

in the victim’s name. Two 

years later, the victim 

received a collection notice 

demanding payment of over 

$40,000 for the surgery 

performed on the identity 

thief. In addition to the 

damage this caused to 

his credit rating, the thief’s 

medical information 

was added to the victim’s 

medical records. 
A STRATEGY TO COMBAT

IDENTITY THEFT

Issue Guidance on Appropriate Use of SSNs. Based on 

inventory, OPM should issue policy guidance to the federal

human capital management community on the appropriate and

inappropriate use of SSNs in employee records, including the

appropriate way to restrict, conceal, or mask SSNs in employee

records and human resource management information systems.

OPM should issue this policy in calendar year 2007.

Require Agencies to Review Use of SSNs. OMB has surveye

federal agencies regarding their use of SSNs to determine the

circumstances under which such use can be eliminated, restricted,

or concealed in agency business processes, systems, and paper

and electronic forms, other than those authorized or approved by

OPM. OMB should complete the analysis of these surveys in t

second quarter of 2007.36

Establish a Clearinghouse for Agency Practices that Minimize Use 

of SSNs. Based on results from OMB’s review of agency practices

on the use of SSNs, the SSA should develop a clearinghouse

for agency practices and initiatives that minimize use and

display of SSNs to facilitate sharing of best practices—including

the development of any alternative strategies for identity

management—to avoid duplication of effort, and to promote

interagency collaboration in the development of more effective

measures. This should be accomplished by the fourth quart

of 2007.

Work with State and Local Governments to Review Use of SSNs

In the second quarter of 2007, the Task Force should begin to

work with state and local governments—through organizations

such as the National Governor’s Association, the National

Association of Attorneys General, the National League of Cities,

the National Association of Counties, the U.S. Conference of

Mayors, the National District Attorneys Association, and the

National Association for Public Health Statistics and Information

Systems—to highlight and discuss the vulnerabilities created by

the use of SSNs and to explore ways to eliminate unnecessary use

and display of SSNs.

RECOMMENDATION: DEVELOP COMPREHENSIVE RECORD

PRIVATE SECTOR USE OF SS

SSNs are an integral part of our financial system. They a

essential in matching consumers to their credit file, and thus

essential in granting credit and detecting fraud, but their

availability to identity thieves creates a possibility of harm
COMBATING IDENTITY THEFT A Strategic Plan

to consumers. Beginning in 2007, the Task Force shou

develop a comprehensive record on the uses of the SSN in the

private sector and evaluate their necessity. Specifically, t

Task Force member agencies that have direct experience with

the private sector use of SSNs, such as DOJ, FTC, SSA, and

the financial regulatory agencies, should gather information

from stakeholders—including the financial services industry,

law enforcement agencies, the consumer reporting agencies,

academics, and consumer advocates. The Task Force should th

make recommendations to the President as to whether additional

specific steps should be taken with respect to the use of SSNs.

Any such recommendations should be made to the President by

the first quarter of 2008.

2. Data Security in the Public Se

While private organizations maintain consumer information for

commercial purposes, public entities, including federal agencies, collect

personal information about individuals for a variety of purposes, such

as determining program eligibility and delivering efficient and effective

services. Because this information often can be used to commit identi

theft, agencies must guard against unauthorized disclosure or misuse of

personal information.

a. Safeguarding of Information in the Public Sector

Two sets of laws and associated policies frame the federal government’s

responsibilities in the area of data security. The first specifically gover

the federal government’s information privacy program, and includes such

laws as the Privacy Act, the Computer Matching and Privacy Protection

Act, and provisions of the E-Government Act.37 The other concerns t

information and information technology security program. The Feder

Information Security Management Act (FISMA), the primary governing

statute for this program, establishes a comprehensive framework for ensuring the effectiveness of information security controls over information resources that support federal operations and assets, and provides for development and maintenance of minimum controls required to protect federal

information and information systems. FISMA assigns specific policy a

oversight responsibilities to OMB, technical guidance responsibilities to

the National Institute of Standards and Technology (NIST), implementation responsibilities to all agencies, and an operational assistance role to

the Department of Homeland Security (DHS). FISMA requires the he

of each agency to implement policies and procedures to cost-effectively

reduce information technology security risks to an acceptable level. 

further requires agency operational program officials, Chief Information Officers (CIOs), and Inspectors General (IGs) to conduct annual
A STRATEGY TO COMBAT

IDENTITY THEFT

reviews of the agency information security program and report the results

to OMB. Additionally, as part of its oversight role, OMB issued sever

guidance memoranda last year on how agencies should safeguard sensitive

information, including a memorandum addressing FISMA oversight and

reporting, and which provided a checklist developed by NIST concerning

protection of remotely accessed information, and that recommended that

agencies, among other things, encrypt all data on mobile devices and use

a “time-out” function for remote access and mobile devices.38 The Unit

States Computer Emergency Readiness Team (US-CERT) has also played

an important role in public sector data security.39

Federal law also requires that agencies prepare extensive data collection

analyses and report periodically to OMB and Congress. The President

Management Agenda (PMA) requires agencies to report quarterly to

OMB on selected performance criteria for both privacy and security.

Agency performance levels for both status and progress are graded on a

PMA Scorecard.40

Federal agency performance on information security has been uneven. 

a result, OMB and the agencies have undertaken a number of initiatives

to improve the government security programs. OMB and DHS are leading an interagency Information Systems Security Line of Business (I

LOB) working group, exploring ways to improve government data security practices. This effort already has identified a number of key areas f

improving government-wide security programs and making them more

cost-effective.

Employee training is essential to the effectiveness of agency security

programs. Existing training programs must be reviewed continuously a

updated to reflect the most recent changes, issues, and trends. This effo

includes the development of annual general security awareness training

for all government employees using a common curriculum; recommended

security training curricula for all employees with significant security

responsibilities; an information-sharing repository/portal of training

programs; and opportunities for knowledge-sharing (e.g., conferences and

seminars). Each of these components builds elements of agency securi

awareness and practices, leading to enhanced protection of sensitive data.

b. Responding to Data Breaches in the Public Secto

Several federal government agencies suffered high-profile security breaches

involving sensitive personal information in 2006. As is true with priva

sector breaches, the loss or compromise of sensitive personal information

by the government has made affected individuals feel exposed and

vulnerable and may increase the risk of identity theft. Until this Ta

Force issued guidance on this topic in September 2006, government

agencies had no comprehensive formal guidance on how to respond to
COMBATING IDENTITY THEFT A Strategic Plan

data breaches, and in particular, had no guidance on what factors to

consider in deciding (1) whether a particular breach warrants notice to

consumers, (2) the content of the notice, (3) which third parties, if any,

should be notified, and (4) whether to offer affected individuals credit

monitoring or other services.

The experience of the last year also has made one thing apparent: an

agency that suffers a breach sometimes faces impediments in its ability

to effectively respond to the breach by notifying persons and entities in a

position to cooperate (either by assisting in informing affected individuals

or by actively preventing or minimizing harms from the breach). For example, an agency that has lost data such as bank account numbers mig

want to share that information with the appropriate financial institutions,

which could assist in monitoring for bank fraud and in identifying the account holders for possible notification. The very information that may 

most necessary to disclose to such persons and entities, however, often will

be information maintained by federal agencies that is subject to the Privacy Act. Critically, the Privacy Act prohibits the disclosure of any record 

a system of records unless the subject individual has given written consent

or unless the disclosure falls within one of 12 statutory exceptions.

RECOMMENDATION: EDUCATE FEDERAL AGENCIES ON H

TO PROTECT THEIR DATA AND MONITOR COMPLIANCE WI

EXISTING GUIDANC

To ensure that government agencies receive specific guidance on

concrete steps that they can take to improve their data security

measures, the Task Force recommends the following:

Develop Concrete Guidance and Best Practices. OMB and DHS,

through the current interagency Information Systems Security

Line of Business (ISS LOB) task force, should (a) outline best

practices in the area of automated tools, training, processes, and

standards that would enable agencies to improve their security

and privacy programs, and (b) develop a list of the most common

10 or 20 “mistakes” to avoid in protecting information held by

the government. The Task Force made this recommendati

as part of its interim recommendations to the President, and it

should be implemented and completed in the second quarter of

2007.

Comply With Data Security Guidance. OMB already has issued an

array of data security regulations and standards aimed at urging

agencies to better protect their data. Given that data breach

continue to occur, however, it is imperative that agencies continue

to report compliance with its data security guidelines and
3

A STRATEGY TO COMBAT

IDENTITY THEFT

directives to OMB. If any agency does not comply fully, O

should note that fact in the agency’s quarterly PMA Scorecard.

Protect Portable Storage and Communications Devices. Many

of the most publicized data breaches in recent months involved

losses of laptop computers. Because government employe

increasingly rely on laptops and other portable communications

devices to conduct government business, no later than the

second quarter of 2007, all Chief Information Officers of federal

agencies should remind the agencies of their responsibilities

to protect laptops and other portable data storage and

communication devices. If any agency does not fully compl

that failure should be reflected on the agency’s PMA scorecard.

RECOMMENDATION: ENSURE EFFECTIVE, RISK-BA

RESPONSES TO DATA BREACHES SUFFERED BY FED

AGENCIES

To assist agencies in responding to the difficult questions that

arise following a data breach, the Task Force recommends the

following:

Issue Data Breach Guidance to Agencies. The Task Force

developed and formally approved a set of guidelines, reproduced

in Appendix A, that sets forth the factors that should be

considered in deciding whether, how, and when to inform

affected individuals of the loss of personal data that can

contribute to identity theft, and whether to offer services such

as free credit monitoring to the persons affected. In the inter

recommendations, the Task Force recommended that OMB issue

that guidance to all agencies and departments. OMB issued the

guidance on September 20, 2006.

Publish a “Routine Use” Allowing Disclosure of Informatio

Following a Breach. To allow agencies to respond quickly to da

breaches, including by sharing information about potentially

affected individuals with other agencies and entities that can

assist in the response, federal agencies should, in accordance

with the Privacy Act exceptions, publish a routine use that

specifically permits the disclosure of information in connection

with response and remediation efforts in the event of a data

breach. Such a routine use would serve to protect the interes

of the people whose information is at risk by allowing agencies

to take appropriate steps to facilitate a timely and effective

response, thereby improving their ability to prevent, minimize,

or remedy any harms that may result from a compromise of data

maintained in their systems of records. This routine use shou
COMBATING IDENTITY THEFT A Strategic Plan

not affect the existing ability of agencies to properly disclose

and share information for law enforcement purposes. The Ta

Force offers the routine use that is reproduced in Appendix B

as a model for other federal agencies to use in developing and

publishing their own routine uses.41 DOJ has now published su

a routine use, which became effective as of January 24, 2007.

The proposed routine use language reproduced in Appendix B

should be reviewed and adapted by agencies to fit their individual

systems of records.

3. Data Security in the Private Sec

Data protection in the private sector is the subject of numerous legal

requirements, industry standards and guidelines, private contractual

arrangements, and consumer and business education initiatives. But 

system is perfect, and data breaches can occur even when entities have

implemented appropriate data safeguards.

a. The Current Legal Landscape

Although there is no generally applicable federal law or regulation that

protects all consumer information or requires that such information be

secured, a variety of specific statutes and regulations impose data security

requirements for particular entities in certain contexts. These inclu

Title V of the GLB Act, and its implementing rules and guidance, which

require financial institutions to maintain reasonable protections for the

personal information they collect from customers 42; Section 5 of the

FTC Act, which prohibits unfair or deceptive practices 43;the FCRA,44

which restricts access to consumer reports and imposes safe disposal

requirements, among other things 45; HIPAA, which protects health

information 46; Section 326 of the Uniting and Strengthening America

by Providing Appropriate Tools Required to Intercept and Obstruct

Terrorism (USA PATRIOT) Act,47 which requires verification of the

identity of persons opening accounts with financial institutions; and the

Drivers Privacy Protection Act of 1994 (DPPA), which prohibits most

disclosures of drivers’ personal information.48 See Volume II, Part A, f

a description of federal laws and regulations related to data security.

The federal bank regulatory agencies—the Federal Deposit Insurance

Corporation (FDIC), Federal Reserve Board (FRB), National Credit

Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS)—and the FTC

and SEC, among others, have pursued active regulatory and enforcement

programs to address the data security practices of those entities within

their respective jurisdictions. Depending on the severity of a violation, t

financial regulatory agencies have cited institutions for violations, without

taking formal action when management quickly remedied the situation.

BJ’s Wholesale Club, Inc. 

suffered a data breach that 

led to the loss of thousands 

of credit card numbers 

and millions of dollars 

in unauthorized charges. 

Following the breach, the 

FTC charged the company 

with engaging in an unfair 

practice by failing to provide 

reasonable security for credit 

card information. The FTC 

charged that BJ’s stored the 

information in unencrypted 

clear text without a business 

need to do so, failed to 

defend its wireless systems 

against unauthorized 

access, failed to use strong 

credentials to limit access 

to the information, and 

failed to use adequate 

procedures for detecting 

and investigating intrusions. 

The FTC also charged that 

these failures were easy 

to exploit by hackers, and 

led to millions of dollars in 

fraudulent charges. 
A STRATEGY TO COMBAT

IDENTITY THEFT

In circumstances where the situation was not quickly remedied, the financial regulatory agencies have taken formal, public actions and sought civil

penalties, restitution, and cease and desist orders. The FDIC has taken 

formal enforcement actions between the beginning of 2002 and the end

of 2006; the FRB has taken 14 formal enforcement actions since 2001; the

OCC has taken 18 formal actions since 2002; and the OTS has taken eight

formal enforcement actions in the past five years. Remedies in these cas

have included substantial penalties and restitution, consumer notification,

and restrictions on the use of customer information. Additionally, t

FTC has obtained orders against 14 companies that allegedly failed to implement reasonable procedures to safeguard the sensitive consumer information they maintained. Most of these cases have been brought in the last

two years. The SEC also has brought data security cases. See Volume

Part B, for a description of enforcement actions relating to data security.

In addition to federal law, every state and the District of Columbia has its

own laws to protect consumers from unfair or deceptive practices. Moreover, 37 states have data breach notice laws,49 and some states have la

relevant to data security, including safeguards and disposal requirements.

Trade associations, industry collaborations, independent organizations

with expertise in data security, and nonprofits have developed guidance

and standards for businesses. Topics include: incorporating b

security and privacy practices into everyday business operations;

developing privacy and security plans; employee screening, training, and

management; implementing electronic and physical safeguards; employing

threat recognition techniques; safeguarding international transactions; and

credit and debit card security.50

Some entities that use service providers also have begun using contractual

provisions that require third-party service vendors with access to the

institution’s sensitive data to safeguard that data.51 Generally, the

provisions also address specific practices for contracting organizations,

including conducting initial and follow-up security audits of a vendor’s

data center, and requiring vendors to provide certification that they

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

protection obligations.52

b. Implementation of Data Security Guidelines and Rule

Many private sector organizations understand their vulnerabilities and

have made significant strides in incorporating data security into their

operations or improving existing security programs. See Volume II, Pa

C, for a description of education efforts for businesses on safeguarding

data. For example, many companies and financial institutions n

regularly require two-factor authentication for business conducted via

In April 2004, the New 

York Attorney General 

settled a case with 

Barnes&Noble.com, fining 

the company $60,000 and 

requiring it to implement 

a data security program 

after an investigation 

revealed that an alleged 

design vulnerability in 

the company’s website 

permitted unauthorized 

access to consumers’ 

personal information and 

enabled thieves to make 

fraudulent purchases. In 

addition, California, Vermont, 

and New York settled a 

joint action with Ziff Davis 

Media, Inc. involving security 

shortcomings that exposed 

the credit card numbers and 

other personal information of 

about 12,000 consumers.

In 2006, the Federal Reserve 

Board issued a Cease and 

Desist Order against an 

Alabama-based financial 

institution for, among other 

things, failing to comply with 

an existing Board regulation 

that required implementation 

of an information security 

program. 
COMBATING IDENTITY THEFT A Strategic Plan

computer or telephone; send dual confirmations when customers submit

a change of address; limit access to non-public personal information to

necessary personnel; regularly monitor websites for phishing and firewalls

for hacking; perform assessments of network security to determine the

adequacy of protection from intrusion, viruses, and other data security

breaches; and post identity theft education materials on company websites.

Additionally, many firms within the consumer data industry offer services

that provide companies with comprehensive background checks on

prospective employees and tenants as permitted by law under the FCRA,

and help companies verify the identity of customers.

Yet, as the reports of data breach incidents continue to show, further

improvements are necessary. In a survey of financial institutions, 95 percent of respondents reported growth in their information security budg

in 2005, with 71 percent reporting that they have a defined information

security governance framework.53 But many organizations also report th

they are in the early stages of implementing comprehensive security procedures. For instance, in a survey of technology decision makers released 

2006, 85 percent of respondents indicated that their stored data was either

somewhat or extremely vulnerable, while only 22 percent had implemented a storage security solution to prevent unauthorized access.54 The sa

survey revealed that 58 percent of data managers responding believed their

networks were not as secure as they could be.55

Small businesses face particular challenges in implementing effective data

security policies for reasons of cost and lack of expertise. A 2005 surv

found that while many small businesses are accelerating their adoption

and use of information technology and the Internet, many do not have

basic security measures in place.56 For example, of the small business

surveyed,

•	 nearly 20 percent did not use virus scans for email, a basic

information security safeguard;

•	 over 60 percent did not protect their wireless networks with even

the simplest of encryption solutions;

•	 over 70 percent reported expectations of a more challenging

environment for detecting security threats, but only 30 percent

reported increasing information security spending in 2005; and

•	 74 percent reported having no information security plan in place.

Further complicating matters is the fact that some federal agencies are

unable to receive data from private sector entities in an encrypted form.

Therefore, some private sector entities that have to transmit sensitive data

to federal agencies—sometimes pursuant to law or regulations issued

by agencies—are unable to fully safeguard the transmitted data because

they must decrypt the data before they can send it to the agencies. T

In 2005, the FTC settled a 

law enforcement action 

with Superior Mortgage, a 

mortgage company, alleging 

that the company failed 

to comply with the GLB 

Safeguards Rule. The FTC 

alleged that the company’s 

security procedures were 

deficient in the areas of 

risk assessment, access 

controls, document 

protection, and oversight 

of service providers. The 

FTC also charged Superior 

with misrepresenting 

how it applied encryption 

to sensitive consumer 

information. Superior 

agreed to undertake a 

comprehensive data security 

program and retain an 

independent auditor to 

assess and certify its security 

procedures every two years 

for the next 10 years.
A STRATEGY TO COMBAT

IDENTITY THEFT

E-Authentication Presidential Initiative is currently addressing how

agencies can more uniformly adopt appropriate technical solutions to this

problem based on the level of risk involved, including, but not limited to,

encryption.

c. Responding to Data Breaches in the Private Secto

Although the link between data breaches and identity theft is unclear,

reports of private sector data security breaches add to consumers’ fear

of identity thieves gaining access to sensitive consumer information and

undermine consumer confidence. Pursuant to the GLB Act, the financi

regulatory agencies require financial institutions under their jurisdiction

to implement programs designed to safeguard customer information. 

addition, the federal bank regulatory agencies (FDIC, FRB, NCUA, OCC,

and OTS) have issued guidance with respect to breach notification. 

addition, 37 states have laws requiring that consumers be notified when

their information has been subject to a breach.57 Some of the laws al

require that the entity that experienced the breach notify law enforcement,

consumer reporting agencies, and other potentially affected parties.58

Notice to consumers may help them avoid or mitigate injury by allowing

them to take appropriate protective actions, such as placing a fraud alert

on their credit file or monitoring their accounts. In some cases, t

organization experiencing the breach has offered additional assistance,

including free credit monitoring services. Moreover, prompt notificati

to law enforcement allows for the investigation and deterrence of identity

theft and related unlawful conduct.

The states have taken a variety of approaches regarding when notice

to consumers is required. Some states require notice to consume

whenever there is unauthorized access to sensitive data. Other stat

require notification only when the breach of information poses a risk to

consumers. Notice is not required, for example, when the data cann

be used to commit identity theft, or when technological protections

prevent fraudsters from accessing data. This approach recognizes th

excessive breach notification can overwhelm consumers, causing them to

ignore more significant incidents, and can impose unnecessary costs on

consumers, the organization that suffered the breach, and others. Und

this approach, however, organizations struggle to assess whether the risks

are sufficient to warrant consumer notification. Factors relevant to th

assessment often include the sensitivity of the breached information, the

extent to which it is protected from access (e.g., by using technological

tools for protecting data), how the breach occurred (e.g., whether the

information was deliberately stolen as opposed to accidentally misplaced),

and any evidence that the data actually have been misused.

A number of bills establishing a federal notice requirement have been

introduced in Congress. Many of the state laws and the bills in Congre

In 2004, an FDIC examination 

of a state-chartered bank 

disclosed significant 

computer system deficiencies 

and inadequate controls to 

prevent unauthorized access 

to customer information. 

The FDIC issued an order 

directing the bank to 

develop and implement an 

information security program, 

and specifically ordered the 

bank, among other things, 

to perform a formal risk 

assessment of internal and 

external threats that could 

result in unauthorized access 

to customer information. 

The bank also was ordered to 

review computer user access 

levels to ensure that access 

was restricted to only those 

individuals with a legitimate 

business need to access the 

information.
COMBATING IDENTITY THEFT A Strategic Plan

address who should be notified, when notice should be given, what

information should be provided in the notice, how notice should be

effected, and the circumstances under which consumer notice should be

delayed for law enforcement purposes.

Despite the substantial effort undertaken by the public and private sectors

to educate businesses on how to respond to data breaches (see Volume

II, Part D, for a description of education for businesses on responding to

data breaches), there is room for improvement by businesses in planning

for and responding to data breaches. Surveys of large corporations a

retailers indicate that fewer than half of them have formal breach response

plans. For example, an April 2006 cross-industry survey revealed that on

45 percent of large multinational corporations headquartered in the U.S.

had a formal process for handling security violations and data breaches.59

Fourteen percent of the companies surveyed had experienced a significant

privacy breach in the past three years.60 A July 2005 survey of large Nor

American corporations found that although 80 percent of responding

companies reported having privacy or data-protection strategies, only 31

percent had a formal notification procedure in the event of a data breach.61

Moreover, one survey found that only 43 percent of retailers had formal

incident response plans, and even fewer had tested their plans.62

RECOMMENDATION: ESTABLISH NATIONAL STANDARD

EXTENDING DATA PROTECTION SAFEGUARDS REQUIRE

AND BREACH NOTIFICATION REQUIREM

Several existing laws mandate protection for sensitive consumer

information, but a number of private entities are not subject to

those laws. The GLB Act, for example, applies to “financi

institutions,” but generally not to other entities that collect

and maintain sensitive information. Similarly, existing feder

breach notification standards do not extend to all entities that

hold sensitive consumer information, and the various state laws

that contain breach notification requirements differ in various

respects, complicating compliance. Accordingly, the Ta

Force recommends the development of (1) a national standard

imposing safeguards requirements on all private entities that

maintain sensitive consumer information; and (2) a national

standard requiring entities that maintain sensitive consumer

information to provide notice to consumers and law enforcement

in the event of a breach. Such national standards should provi

clarity and predictability for businesses and consumers, and

should incorporate the following important principles.

Covered data. The national standards for data security and

for breach notification should cover data that can be used to

When an online retailer 

became the target of an 

elaborate fraud ring, the 

company looked to one of 

the major credit reporting 

agencies for assistance. 

By using shared data 

maintained by that agency, 

the retailer was able to 

identify applications with 

common data elements and 

flag them for further scrutiny. 

By using the shared application data in connection with 

the activities of this fraud 

ring, the company avoided 

$26,000 in fraud losses.
A STRATEGY TO COMBAT

IDENTITY THEFT

perpetrate identity theft—in particular, any data or combination

of consumer data that would allow someone to use, log into,

or access an individual’s account, or to establish a new account

using the individual’s identifying information. This identifyi

information includes a name, address, or telephone number

paired with a unique identifier such as a Social Security number,

a driver’s license number, a biometric record, or a financial

account number (together with a PIN or security code, if such

PIN or code is required to access an account) (hereinafter

“covered data”). The standards should not cover data, such as

name and address alone, that by itself typically would not cause

harm. The definitions of covered data for data security and da

breach notification requirements should be consistent.

Covered entities. The national standards for data security and

breach notification should cover any private entity that collects,

maintains, sells, transfers, disposes of, or otherwise handles

covered data in any medium, including electronic and paper

formats.

Unusable data. National standards should recognize t

rendering data unusable to outside parties likely would prevent

“acquisition” of the data, and thus ordinarily would satisfy an

entity’s legal obligations to protect the data and would not trigger

notification of a breach. The standards should not endorse

specific technology because unusability is not a static concept and

the effectiveness of particular technologies may change over time.

Risk-based standard for breach notification. The national breach

notification standard should require that covered entities provide

notice to consumers in the event of a data breach, but only when

the risks to consumers are real—that is, when there is a significant

risk of identity theft due to the breach. This “significant risk 

identity theft” trigger for notification recognizes that excessive

breach notification can overwhelm consumers, causing them

to take costly actions when there is little risk, or conversely, to

ignore the notices when the risks are real.	

Notification to law enforcement. The national breach notification

standard should provide for timely notification to law

enforcement and expressly allow law enforcement to authorize

a delay in required consumer notice, either for law enforcement

or national security reasons (and either on its own behalf or on

behalf of state or local law enforcement).

Relationship to current federal standards. The national standard

for data security and breach notification should be drafted to be

consistent with and so as not to displace any rules, regulations,
COMBATING IDENTITY THEFT A Strategic Plan

guidelines, standards, or guidance issued under the GLB Act by

the FTC, the federal bank regulatory agencies, the SEC, or the

Commodity Futures Trading Commission (CFTC), unless those

agencies so determine.

Preemption of state laws. To ensure comprehensive national

requirements that provide clarity and predictability, while

maintaining an effective enforcement role for the states, the

national data security and breach notification standards should

preempt state data security and breach notification laws, but

authorize enforcement by the state Attorneys General for entities

not subject to the jurisdiction of the federal bank regulatory

agencies, the SEC, or the CFTC.

Rulemaking and enforcement authority. Coordinated rulemak

authority under the Administrative Procedure Act should be

given to the FTC, the federal bank regulatory agencies, the

SEC, and the CFTC to implement the national standards.

Those agencies should be authorized to enforce the standards

against entities under their respective jurisdictions, and should

specifically be authorized to seek civil penalties in federal district

court.

Private right of action. The national standards should not provide

for or create a private right of action.

Standards incorporating such principles will prompt covered

entities to establish and implement administrative, technical, and

physical safeguards to ensure the security and confidentiality of

sensitive consumer information; protect against any anticipated

threats or hazards to the security or integrity of such information;

and protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to

any consumer. Because the costs associated with implementi

safeguards or providing breach notice may be different for small

businesses and larger businesses, or may differ based on the type

of information held by a business, the national standard should

expressly call for actions that are reasonable for the particular

covered entity and should not adopt a one-size-fits-all approach

to the implementation of safeguards.

RECOMMENDATION: BETTER EDUCATE THE PRIVATE S

ON SAFEGUARDING DAT

Although much has been done to educate the private sector

on how to safeguard data, the continued proliferation of data

breaches suggests that more needs to be done. While there is 

perfect data security system, a company that is sensitized to the

When a major consumer 

lending institution 

encountered a problem 

when the loss ratio on many 

of its loans —including 

mortgages and consumer 

loans—became excessively 

high due to fraud, the bank 

hired a leading provider of 

fraud prevention products 

to authenticate potential 

customers during the 

application process prior to 

extending credit. The result 

was immediate: two million 

dollars of confirmed fraud 

losses were averted within 

the first six months 

of implementation.
A STRATEGY TO COMBAT

IDENTITY THEFT

importance of data security, understands its legal obligations,

and has the information it needs to secure its data adequately, is

less likely to suffer a data compromise. The Task Force therefo

makes the following recommendations concerning how to better

educate the private sector:

Hold Regional Seminars for Businesses on Safeguarding

Information. By the fourth quarter of 2007, the federal financial

regulatory agencies and the FTC, with support from other

Task Force member agencies, should hold regional seminars

and develop self-guided and online tutorials for businesses and

financial institutions, about safeguarding information, preventing

and reporting breaches, and assisting identity theft victims. T

seminar’s leaders should make efforts to include small businesses

in these sessions and address their particular needs. The

seminars could be co-sponsored by local bar associations, the

Better Business Bureaus (BBBs), and other similar organizations.

Self-guided tutorials should be made available through the Task

Force’s online clearinghouse at www.idtheft.gov.

Distribute Improved Guidance for Private Industry.  In the seco

quarter of 2007, the FTC should expand written guidance to

private sector entities that are not regulated by the federal bank

regulatory agencies or the SEC on steps they should take to

safeguard information. The guidance should be designed to gi

a more detailed explanation of the broad principles encompassed

in existing laws. Like the Information Technology Examinati

Handbook’s Information Security Booklet issued under the

auspices of the Federal Financial Institutions Examination

Council,63 the guidance should be risk-based and flexible, in

recognition of the fact that different private sector entities will

warrant different solutions.

RECOMMENDATION: INITIATE INVESTIGATIONS OF DATA

SECURITY VIOLATIO

Beginning immediately, appropriate government agencies should

initiate investigations of and, if appropriate, take enforcement

actions against entities that violate the laws governing data security. The FTC, SEC, and federal bank regulatory agencies ha

used regulatory and enforcement efforts to require companies to

maintain appropriate information safeguards under the law. Federal agencies should continue and expand these efforts to ensu

that such entities use reasonable data security measures. Whe

appropriate, the agencies should share information about those

enforcement actions on www.idtheft.gov.

A leading payment 

processing and bill 

payment company recently 

deployed an automated 

fraud detection and case 

management system to 

more than 40 financial 

institutions. The system 

helps ensure that receiving 

and paying bills online 

remains a safe practice for 

consumers. To mitigate 

risk and reduce fraud for 

banks and consumers before 

it happens, the system 

combines the company’s 

cumulative knowledge of 

payment patterns and a 

sophisticated analytics 

engine to help financial 

services organizations 

detect and stop unauthorized 

payments.
COMBATING IDENTITY THEFT A Strategic Plan

4.  Educating Consumers On Protecting Their P

Informatio

The first line of defense against identity theft often is an aware and motivated consumer who takes reasonable precautions to protect his information. Every day, unwitting consumers create risks to the security of the

personal information. From failing to install firewall protection on a computer hard drive to leaving paid bills in a mail slot, consumers leave t

door open to identity thieves. Consumer education is a critical compone

of any plan to reduce the incidence of identity theft.

The federal government has been a leading provider of consumer information about identity theft. Numerous departments and agencies targ

identity theft-related messages to relevant populations. See Volume I

Part E, for a description of federal consumer education efforts. The FT

through its Identity Theft Clearinghouse and ongoing outreach, plays a

primary role in consumer awareness and education, developing information that has been co-branded by a variety of groups and agencies. I

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

in both English and Spanish for consumers. The FTC also recently implemented a national public awareness campaign centered around the them

of “Deter, Detect, and Defend,” which seeks to drive behavioral changes

in consumers that will reduce their risk of identity theft (Deter); encourage

them to monitor their credit reports and accounts to alert them of identity

theft as soon as possible 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 direct messaging to consumers as we

as material written for organizations, community leaders, and local law

enforcement. The Deter, Detect, and Defend materials have been adopt

and distributed by hundreds of entities, both public and private.

The SSA and the federal regulatory agencies are among the many other

government bodies that also play a significant role in educating consumers on how to protect themselves. For example, the SSA added a message to its SSN verification printout warning the public not to share the

SSNs with others. This warning was especially timely in the aftermath 

Hurricane Katrina, which necessitated the issuance of a large number of

those printouts. Similarly, the Senior Medicare Patrol (SMP) progra

funded by U.S. Administration on Aging in the Department of Health

and Human Services, uses senior volunteers to educate their peers about

protecting their personal information and preventing and identifying consumer and health care fraud. The SMP program also has worked close

with the Centers for Medicare and Medicaid Services to protect seniors

from new scams aimed at defrauding them of their Medicare numbers and

other personal information. And the U.S. Postal Inspection Service h

produced a number of consumer education materials, including several

videos, alerting the public to the problems associated with identity theft.
4

A STRATEGY TO COMBAT

IDENTITY THEFT

Significant consumer education efforts also are taking place at the state

level. Nearly all of the state Attorneys General offer information 

the prevention and remediation of identity theft on their websites, and

several states have conducted conferences and workshops focused on

education and training in privacy protection and identity theft prevention.

Over the past year, the Attorney General of Illinois and the Governors

of New Mexico and California have hosted summit meetings, bringing

together law enforcement, educators, victims’ coordinators, consumer

advocates, and the business community to develop better strategies for

educating the public and fighting identity theft. The National Governo

Association convened the National Strategic Policy Council on Cyber and

Electronic Crime in September 2006 to trigger a coordinated education

and prevention effort by federal, state, and local policymakers. T

New York State Consumer Protection Board has conducted “Consumer

Action Days,” with free seminars about identity theft and other consumer

protection issues.

Police departments also provide consumer education to their communities.

Many departments have developed materials and make them available

in police stations, in city government buildings, and on websites.64 As 

this writing, more than 500 local police departments are using the FTC’s

“Deter, Detect, Defend” campaign materials to teach their communities

about identity theft. Other groups, including the National Apartme

Association and the National Association of Realtors, also have promoted

this campaign by distributing the materials to their membership.

Although most educational material is directed at consumers in general,

some is aimed at and tailored to specific target groups. One such gro

is college students. For several reasons—including the vast amounts 

personal data that colleges maintain about them and their tendency to

keep personal data unguarded in shared dormitory rooms—students are

frequent targets of identity thieves. According to one report, one-thi

to one-half of all reported personal information breaches in 2006 have

occurred at colleges and universities.65 In recognition of the increas

vulnerability of this population, many universities are providing

information to their students about the risks of identity theft through web

sites, orientation campaigns, and seminars.66

Federal, state, and local government agencies provide a great deal of identity theft-related information to the public through the Internet, printed

materials, DVDs, and in-person presentations. The messages the agenci

provide—how to protect personal information, how to recognize a potential problem, where to report a theft, and how to deal with the aftermath—

are echoed by industry, law enforcement, advocates, and the media. S

Volume II, Part F, for a description of private sector consumer education

efforts. But there is little coordination among the agencies on current education programs. Dissemination in some cases is random, informatio
COMBATING IDENTITY THEFT A Strategic Plan

limited, and evaluation of effectiveness is almost nonexistent. Although

great deal of useful information is being disseminated, the extent to which

the messages are reaching, engaging, or motivating consumers is unclear.

RECOMMENDATION: INITIATE A MULTI-YEAR PUB

AWARENESS CAMPAIGN

Because consumer education is a critical component of any

plan to reduce the incidence of identity theft, the Task Force

recommends that member agencies, in the third quarter of

2007, initiate a multi-year national public awareness campaign

that builds on the FTC’s current “AvoID Theft: Deter, Detect,

Defend” campaign, developed pursuant to direction in the FACT

Act. This campaign should include the following element

Develop a Broad Awareness Campaign. By broadening the current

FTC campaign into a multi-year awareness campaign, and by

engaging the Ad Council or similar entities as partners, important

and empowering messages should be disseminated more widely

and by more partners. The campaign should include publ

service announcements on the Internet, radio, and television, and

in newspapers and magazines, and should address the issue from

a variety of perspectives, from prevention through mitigation and

remediation, and reach a variety of audiences.

Enlist Outreach Partners. The agencies conducting the campai

should enlist as outreach partners national organizations either

that have been active in helping consumers protect themselves

against identity theft, such as the AARP, the Identity Theft

Resource Center (ITRC), and the Privacy Rights Clearinghouse

(PRC), or that may be well-situated to help in this area, such

as the White House Office of Faith-Based and Community

Initiatives.

Increase Outreach to Traditionally Underserved Communities.

Outreach to underserved communities should include

encouraging language translations of existing materials and

involving community-based organizations as partners.

Establish “Protect Your Identity Days.” The campaign should

establish “Protect Your Identity Days” to promote better data

security by businesses and individual commitment to security

by consumers. These “Protect Your Identity Days” shou

also build on the popularity of community “shred-ins” by

encouraging community and business organizations to shred

documents containing personal information.
A STRATEGY TO COMBAT

IDENTITY THEFT

RECOMMENDATION: DEVELOP AN ONLINE CLEARINGHOUS

FOR CURRENT EDUCATIONAL R

The Task Force recommends that in the third quarter of 2007, the

Task Force member agencies develop an online “clearinghouse”

for current identity theft educational resources for consumers,

businesses, and law enforcement from a variety of sources at

www.idtheft.gov. This would make the materials immediate

available in one place to any public or private entity willing to

launch an education program, and to any citizen interested in

accessing the information. Rather than recreate content, entiti

could link directly to the clearinghouse for timely and accurate information. Educational materials should be added to the websi

on an ongoing basis.

B. Prevntion:  ak

Consu

Keeping valuable consumer data out of the hands of criminals is the

first step in reducing the incidence of identity theft. But, because 

security is perfect and thieves are resourceful, it is essential to reduce the

opportunities for criminals to misuse the data they do manage to steal.

An identity thief who wants to open new accounts in a victim’s name

must be able to (1) provide identifying information to enable the creditor

or other grantor of benefits to access information on which to base an

eligibility decision, and (2) convince the creditor or other grantor of

benefits that he is, in fact, the person he purports to be. For example,

credit card grantor processing an application for a credit card will use the

SSN to access the consumer’s credit report to check his creditworthiness,

and may rely on photo documents, the SSN, and/or other proof to access

other sources of information intended to “verify” the applicant’s identity.

Thus, the SSN is a critical piece of information for the thief, and its wide

availability increases the risk of identity theft.

Identity systems follow a two-fold process: first, determini

(“identification”) and setting (“enrollment”) the identity of an

individual at the onset of the relationship; and second, later ensuring

that the individual is the same person who was initially enrolled

(“authentication”). With the exception of banks, savings associations,

credit unions, some broker-dealers, mutual funds, futures commission

merchants, and introducing brokers (collectively, “financial institutions”),

there is no generally-applicable legal obligation on private sector entities

to use any particular means of identification. Financial institutions a

required to follow certain verification procedures pursuant to regulations

promulgated by the federal bank regulatory agencies, the Department of
COMBATING IDENTITY THEFT A Strategic Plan

Treasury, the SEC, and the CFTC under the USA PATRIOT Act.67 T

regulations require these financial institutions to establish a Customer

Identification Program (CIP) specifying identifying information that will

be obtained from each customer when accounts are opened (which must

include, at a minimum, name, date of birth, address, and an identification

number such as an SSN). The CIP requirement is intended to ensu

that financial institutions form a reasonable belief that they know the

true identity of each customer who opens an account. The governmen

too, is making efforts to implement new identification mechanisms. F

example, REAL ID is a nationwide effort intended to prevent terrorism,

reduce fraud, and improve the reliability and accuracy of identification

documents that state governments issue.68 See Volume II, Part G, for a

description of recent laws relating to identification documents.

The verification process can fail, however, in a number of ways. Firs

identity documents may be falsified. Second, checking the identifyi

information against other verifying sources of information can produce

varying results, depending on the accuracy of the initial information presented and the accuracy or quality of the verifying sources. The proce

also can fail because employees are trained improperly or fail to follow

proper procedures. Identity thieves exploit each of these opportunities 

circumvent the verification process.69

Once an individual’s identity has been verified, it must be authenticated

each time he wants the access for which he was initially verified, such as

access to a bank account. Generally, businesses authenticate an individu

by requiring him to present some sort of credential to prove that he is the

same individual whose identity was originally verified. A credential 

generally one or more of the following:

•	 Something a person knows—most commonly a password, but also

may be a query that requires specific knowledge only the customer

is likely to have, such as the exact amount of the customer’s

monthly mortgage payment.

•	 Something a person has—most commonly a physical device, such

as a Universal Serial Bus (USB) token, a smart card, or a passwordgenerating device.70

•	 Something a person is—most commonly a physical characteristic,

such as a fingerprint, iris, face, and hand geometry. This type 

authentication is referred to as biometrics.71

Some entities use a single form of authentication—most commonly a

password—but if it is compromised, there are no other fail-safes in the

system. To address this problem, the federal bank regulatory agenci

issued guidance promoting stronger customer authentication methods

for certain high-risk transactions. Such methods are to include the u

of multi-factor authentication, layered security, or other similar controls
A STRATEGY TO COMBAT

IDENTITY THEFT

reasonably calculated to mitigate the exposure from any transactions

that are identified as high-risk. The guidance more broadly provid

that banks, savings associations, and credit unions conduct risk-based

assessments, evaluate customer awareness programs, and develop security

measures to reliably authenticate customers remotely accessing Internetbased financial services.72 Financial institutions covered by the guidan

were advised that the agencies expected them to have completed the risk

assessment and implemented risk mitigation activities by year-end 2006.73

Along with the financial services industry, other industries have begun

to implement new authentication procedures using different types of

credentials.

SSNs have many advantages and are widely used in our current

marketplace to match consumers with their records (including their

credit files) and as part of the authentication process. Keeping t

authentication process convenient for consumers and credit grantors

without making it too easy for criminals to impersonate consumers

requires a fine balance. Notwithstanding improvements in certa

industries and companies, efforts to facilitate the development of better

ways to authenticate consumers without undue burden would help prevent

criminals from profiting from their crime.

RECOMMENDATION: HOLD WORKSHOPS O

AUTHENTICATIO

Because developing more reliable methods of authenticating the

identities of individuals would make it harder for identity thieves

to open new accounts or access existing accounts using other

individuals’ information, the Task Force will hold a workshop

or series of workshops, involving academics, industry, and

entrepreneurs, focused on developing and promoting improved

means of authenticating the identities of individuals. The

experts will discuss the existing problem and examine the

limitations of current processes of authentication. With th

information, the Task Force will probe viable technological and

other solutions that will reduce identity fraud, and identify needs

for future research. Such workshops have been successful 

developing creative and timely responses to consumer protection

issues, and the workshops are expected to be useful for both the

private and public sectors. For example, the federal governme

has an interest as a facilitator of the development of new

technologies and in implementing technologies that better protect

the data it handles in providing benefits and services, and as an

employer.
COMBATING IDENTITY THEFT A Strategic Plan

As noted in the Task Force’s interim recommendations to the

President, the FTC and other Task Force member agencies will

host the first such workshop in the second quarter of 2007.

The Task Force also recommends that a report be issued or

subsequent workshops be held to report on any proposals or best

practices identified during the workshop series.

RECOMMENDATION: DEVELOP COMPREHENSIVE REC

ON PRIVATE SECTOR USE OF SS

As noted in Section III A 1, above, the Task Force recommends

developing a comprehensive record on the uses of the SSN in the

private sector and evaluating their necessity.

C. Victi Recover

Thei

Because identity theft can be committed despite the best of precautions, an

essential step in the fight against this crime is ensuring that victims have

the knowledge, tools, and assistance necessary to minimize the damage

and begin the recovery process. Currently, consumers have a number 

rights and available resources, but they may not be aware of them.

1. Victim Assistance  Outreach and E

Federal and state laws offer victims of identity theft an array of tools to

avoid or mitigate the harms they suffer. For example, under the FA

Act, victims can: (1) place alerts on their credit files; (2) request copies of

applications and other documents used by the thief; (3) request that the

credit reporting agencies block fraudulent trade lines on credit reports; and

(4) obtain information on the fraudulent accounts from debt collectors.

In some cases, the recovery process is relatively straightforward. Consumers whose credit card numbers have been used to make unauthorized purchases, for example, typically can get the charges removed without und

burden. In other cases, however, such as those involving new-accou

fraud, recovery can be an ordeal.

Widely-available guidance advises consumers of steps to take if they have

become victims of identity theft, or if their personal information has been

breached. For example, the FTC’s website, www.ftc.gov/idtheft, contai

step-by-step recovery information for victims, as well as for those who may

be at risk following a compromise of their data. Many other agencies a

organizations link directly to the FTC site and themselves provide education and assistance to victims.
A STRATEGY TO COMBAT

IDENTITY THEFT

Fair and Accurate Credit Transaction Act (FACT Act) Right

The Fair and Accurate Credit Transactions Act of 2003 added new sections to the Fair 

Credit Reporting Act that provide a number of new tools for victims to recover from 

identity theft. These include the right to place a fraud alert with the credit reporting 

agencies and receive a free copy of the credit report. An initial alert lasts for 90 days. 

A victim with an identity theft report documenting actual misuse of the consumer 

information is entitled to place a 7-year alert on his file. In addition, under the FACT Act, 

victims can request copies of documents relating to fraudulent transactions, and can 

obtain information from a debt collector regarding a debt fraudulently incurred in the 

victim’s name. Victims who have a police report also can ask that fraudulent accounts be 

blocked from their credit report, and can prevent businesses from reporting information 

that resulted from identity theft to the credit reporting agencies.

Identity theft victims, and consumers who suspect that they may become victims 

because of lost data, are advised to act quickly to prevent or minimize harm. The 

steps are straightforward:

• Contact one of the three major credit reporting agencies to place a fraud alert 

on their credit file. The agencies are required to transmit this information to the 

other two companies. Consumers who place this 90-day alert are entitled to a 

free copy of their credit report. Fraud alerts are most useful when a consumer’s 

SSN is compromised, creating the risk of new account fraud.

• Contact any creditors where fraudulent accounts were opened or charges were 

made to dispute these transactions, and follow up in writing. 

• Report actual incidents of identity theft to the local police department and obtain 

a copy of the police report. This document will be essential to exercising other 

remedies.

• Report the identity theft incident to the ID Theft Data Clearinghouse by filing 

a complaint online at ftc.gov/idtheft, or calling toll free 877 ID THEFT. The 

complaint will be entered into the Clearinghouse and shared with the law 

enforcement agencies who use the database to investigate and prosecute 

identity crimes.

• 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. 

State governments also provide assistance to victims. State consum

protection agencies, privacy agencies, and state Attorneys General provide

victim information and guidance on their websites, and some provide

personal assistance as well. A number of states have established hotline

counseling, and other assistance for victims of identity theft. For exampl

the Illinois Attorney General’s office has implemented an Identity Theft

Hotline; each caller is assigned a consumer advocate to assist with the

recovery process and to help prevent further victimization.
COMBATING IDENTITY THEFT A Strategic Plan

A number of private sector organizations also provide critical victim

assistance. Not-for-profit groups such as the Privacy Rights Clearinghou

(PRC) and the Identity Theft Resource Center (ITRC) offer counseling

and assistance for identity theft victims who need help in going through

the recovery process. The Identity Theft Assistance Center (ITAC),

victim assistance program established by the financial services industry,

has helped approximately 13,000 victims resolve problems with disputed

accounts and other fraud related to identity theft since its founding in

2004. Finally, many individual companies have established hotline

distributed materials, and provided special services for customers whose

information has been misused. Indeed, some companies rely on the

identity theft services as marketing tools.

Despite this substantial effort by the public and private sectors to educate

and assist victims, there is room for improvement. Many victims are n

aware, or do not take advantage, of the resources available to them. F

example, while the FTC receives roughly 250,000 contacts from victims

every year, that number is only a small percentage of all identity theft

victims. Moreover, although first responders could be a key resource f

identity theft victims, the first responders often are overworked and may

not have the information that they need about the steps for victim recovery. It is essential, therefore, that public and private outreach efforts 

expanded, better coordinated, and better funded.

RECOMMENDATION: PROVIDE SPECIALIZED TRAINI

ABOUT VICTIM RECOVERY TO FIRST RESPONDER

OTHERS PROVIDING DIRECT ASSISTANCE TO IDENTI

THEFT VICTIMS

First responders and others who provide direct assistance and

support to identity theft victims must be adequately trained.

Accordingly, the Task Force recommends the following:

Train Local Law Enforcement Officers. By the third quarter of

2007, federal law enforcement agencies, which could include

the U.S. Postal Inspection Service, the FBI, the Secret Service,

and the FTC, should conduct training seminars—delivered in

person, online, or via video—for local law enforcement officers

on available resources and providing assistance for victims.

Provide Educational Materials for First Responders That Can Be

Readily Used as a Reference Guide for Identity Theft Victi

During the third quarter of 2007, the FTC and DOJ should

develop a reference guide, which should include contact

information for resources and information on first steps

to recovery, and should make that guide available to law

enforcement officers through the online clearinghouse at
A STRATEGY TO COMBAT

IDENTITY THEFT

www.idtheft.gov. Such guidance would assist first responders 

directing victims on their way to recovery.

Distribute an Identity Theft Victim Statement of Rights. Federal la

provides substantial assistance to victims of identity theft. Fr

obtaining a police report to blocking fraudulent accounts in a

credit report, consumers—as well as law enforcement, private

businesses, and other parties involved in the recovery process—

need to know what remedies are available. Accordingly, the Ta

Force recommends that, during the third quarter of 2007, the

FTC draft an ID Theft Victim Statement of Rights, a short and

simple statement of the basic rights victims possess under current

law. This document should then be disseminated to victi

through law enforcement, the financial sector, and advocacy

groups, and posted at www.idtheft.gov.

Develop Nationwide Training for Victim Assistance Counselors. 

Crime victims receive assistance through a wide array of federal

and state-sponsored programs, as well as nonprofit organizations.

Additionally, every United States Attorney’s Office in the country

has a victim-witness coordinator who is responsible for referring

crime victims to the appropriate resources to resolve harms

that resulted from the misuse of their information. All of the

counselors should be trained to respond to the specific needs of

identity theft victims, including assisting them in coping with the

financial and emotional impact of identity crime. Therefore, t

Task Force recommends that a standardized training curriculum

for victim assistance be developed and promoted through a

nationwide training campaign, including through DOJ’s Office

for Victims of Crime (OVC). Already, OVC has begun organizi

training workshops, the first of which was held in December

2006. These workshops are intended to train not only victimwitness coordinators from U.S. Attorney’s Offices, but also stat

tribal, and local victim service providers. The program will he

advocates learn how to assist victims in self-advocacy and how

and when to intervene in a victim’s recovery process. Traini

topics will include helping victims deal with the economic and

emotional ramifications of identity theft, assisting victims with

understanding how an identity theft case proceeds through the

criminal justice system, and identity theft laws. Addition

workshops should be held in 2007.

RECOMMENDATION: DEVELOP AVENUES 

INDIVIDUALIZED ASSISTANCE TO IDENTITY THEFT VICTIM

Although many victims are able to resolve their identity theftrelated issues without assistance, some individuals would
COMBATING IDENTITY THEFT A Strategic Plan

benefit from individualized counseling. The availability 

personalized assistance should be increased through national

service organizations, such as those using retired seniors or

similar groups, and pro bono activities by lawyers, such as

those organized by the American Bar Association (ABA). 

offering individualized assistance to identity theft victims, these

organizations and programs should use the victim resource

guides that are already available through the FTC and DOJ’s

Office for Victims of Crime. Specifically, the Task Force al

recommends the following:

Engage the American Bar Association to Develop a Program 

Focusing on Assisting Identity Theft Victims with Recovery.

The ABA has expertise in coordinating legal representation in

specific areas of practice through law firm volunteers. Moreove

law firms have the resources and expertise to staff an effort to

assist victims of identity theft. Accordingly, the Task For

recommends that, beginning in 2007, the ABA, with assistance

from the Department of Justice, develop a pro bono referral

program focusing on assisting identity theft victims with recovery.

2. Making Identity Theft Victims 

Identity theft inflicts many kinds of harm upon its victims, making it

difficult for them to feel that they ever will recover fully. Beyond tangib

forms of harm, statistics cannot adequately convey the emotional toll

that identity theft often exacts on its victims, who frequently report

feelings of violation, anger, anxiety, betrayal of trust, and even selfblame or hopelessness. These feelings may continue, or even increase, 

victims work through the credit recovery and criminal justice processes.

Embarrassment, cultural factors, or personal or family circumstances (e.g.,

if the victim has a relationship to the identity thief) may keep the victims

from reporting the problem to law enforcement, in turn making them

ineligible to take advantage of certain remedies. Often, these reactions a

intensified by the ongoing, long-term nature of the crime. Criminals m

not stop committing identity theft after having been caught; they simply

use information against the same individual in a new way, or they sell

the information so that multiple identity thieves can use it. Even wh

the fraudulent activity ceases, the effects of negative information on the

victim’s credit report can continue for years.

The many hours victims spend in attempting to recover from the harms

they suffer often takes a toll on victims that is not reflected in their

monetary losses. One reason that identity theft can be so destructive to i

victims is the sheer amount of time and energy often required to recover

from the offense, including having to correct credit reports, dispute charges

with individual creditors, close and reopen bank accounts, and monitor

credit reports for future problems arising from the theft.

“I received delinquent bills 

for purchases she [the 

suspect] made. I spent 

countless hours on calls with 

creditors in Texas who were 

reluctant to believe that 

the accounts that had been 

opened were fraudulent. I 

spent days talking to police 

in Texas in an effort to 

convince them that I was 

allowed by Texas law to file 

a report and have her [the 

suspect] charged with the 

theft of my identity.... I had 

to send more than 50 letters 

to the creditors to have them 

remove the more than 60 

inquiries that were made by 

this woman....”

Nicole Robinson

Testimony before 

House Ways and 

Means Committee, 

Subcommittee on 

Social Security

May 22, 2001
5

A STRATEGY TO COMBAT

IDENTITY THEFT

In addition to losing time and money, some identity theft victims suffer

the indignity of being mistaken for the criminal who stole their identities, and have been wrongfully arrested.74 In one case, a victim’s driver

license was stolen, and the information from the license was used to open

a fraudulent bank account and to write more than $10,000 in bad checks.

The victim herself was arrested when local authorities thought she was the

criminal. In addition to the resulting feelings of trauma, this type of ha

is a particularly difficult one for an identity theft victim to resolve.

RECOMMENDATION: AMEND CRIMINAL RESTITUT

STATUTES TO ENSURE THAT VICTIMS RECOVER FO

VALUE OF TIME SPENT IN ATTEMPTING TO REMEDIATE TH

HARMS THEY SUFFE

Restitution to victims from convicted thieves is available for the

direct financial costs of identity theft offenses. However, the

is no specific provision in the federal restitution statutes for

compensation for the time spent by victims recovering from the

crime, and court decisions interpreting the statutes suggest that

such recovery would be precluded.

As stated in the Task Force’s interim recommendations to the

President, the Task Force recommends that Congress amend the

federal criminal restitution statutes to allow for restitution from a

criminal defendant to an identity theft victim, in an amount equal

to the value of the victim’s time reasonably spent attempting to

remediate the intended or actual harm incurred from the identity

theft offense. The language of the proposed amendment is 

Appendix C. DOJ transmitted the proposed amendment 

Congress on October 4, 2006.

RECOMMENDATION: EXPLORE THE DEVELOPMENT O

A NATIONAL PROGRAM ALLOWING IDENTITY THEF

VICTIMS TO OBTAIN AN IDENTIFICATION DOCUMENT F

AUTHENTICATION PURPOS

One of the problems faced by identity theft victims is proving that

they are who they say they are. Indeed, some identity theft victims have been mistaken for the criminal who stole their identit

and have been arrested based on warrants issued for the thief who

stole their personal data. To give identity theft victims a mea

to authenticate their identities in such a situation, several states

have developed identification documents, or “passports,” that

authenticate identity theft victims. These voluntary mechanis

are designed to prevent the misuse of the victim’s name in the
COMBATING IDENTITY THEFT A Strategic Plan

criminal justice system when, for example, an identity thief uses

his victim’s name when arrested. These documents often u

multiple factors for authentication, such as biometric data and

a password. The FBI has established a similar system throu

the National Crime Information Center, allowing identity theft

victims to place their name in an “Identity File.” This progra

too, is limited in scope. Beginning in 2007, the Task For

member agencies should lead an effort to study the feasibility of

developing a nationwide system allowing identity theft victims to

obtain a document that they can use to avoid being mistaken for

the suspect who has misused their identity. The system shou

build on the programs already used by several states and the FBI.

3. Gathering Better Information on the Effectivenes

Victim Recovery Measu

Identity theft victims have been granted many new rights in recent years.

Gathering reliable information about the utility of these new rights

is critical to evaluating whether they are working well or need to be

modified. Additionally, because some states have measures in place 

assist identity theft victims that have no federal counterpart, it is important

to assess the success of those measures to determine whether they should

be adopted more widely. Building a record of victims’ experiences 

exercising their rights is therefore crucial to ensuring that any strategy to

fight identity theft is well-supported.

RECOMMENDATION: ASSESS EFFICACY OF TOOLS AVAILABLE

TO VICTIMS

The Task Force recommends the following surveys or assessments:

Conduct Assessment of FACT Act Remedies Under FCR.  

FCRA is among the federal laws that enable victims to restore

their good name. The FACT Act amendments to the FC

provide several new rights and tools for actual or potential

identity theft victims, including the availability of credit file fraud

alerts; the blocking of fraudulent trade lines on credit reports;

the right to have creditors cease furnishing information relating

to fraudulent accounts to credit reporting agencies; and the right

to obtain business records relating to fraudulent accounts. Ma

of these rights have been in effect for a short time. Accordingl

the Task Force recommends that the agencies with enforcement

authority for these statutory provisions assess their impact and

effectiveness through appropriate surveys. Agencies shou

report on the results in calendar year 2008.
A STRATEGY TO COMBAT

IDENTITY THEFT

Conduct Assessment of State Credit Freeze Laws. Among the

state-enacted remedies without a federal counterpart is one

granting consumers the right to obtain a credit freeze. Cred

freezes make a consumer’s credit report inaccessible when, for

example, an identity thief attempts to open an account in the

victim’s name. State laws differ in several respects, includi

whether all consumers can obtain a freeze or only identity

theft victims; whether credit reporting agencies can charge the

consumer for unfreezing a file (which would be necessary when

applying for credit); and the time allowed to the credit reporting

agencies to unfreeze a file. These provisions are relatively ne

and there is no “track record” to show how effective they are,

what costs they may impose on consumers and businesses, and

what features are most beneficial to consumers. An assessme

of how these measures have been implemented and how effective

they have been would help policy makers in considering whether

a federal credit freeze law would be appropriate. Accordingl

the Task Force recommends that the FTC, with support from the

Task Force member agencies, assess the impact and effectiveness

of credit freeze laws, and report on the results in the first quarter

of 2008.

D. Law Enorceen

Ide

The two keys to preventing identity theft are (1) preventing access to sensitive consumer information through better data security and increased education, and (2) preventing the misuse of information that may be obtained

by would-be identity thieves. Should those mechanisms fail, strong criminal law enforcement is necessary to both punish and deter identity thieve

The increased awareness about identity theft in recent years has made it

necessary for many law enforcement agencies at all levels of government

to devote additional resources to investigating identity theft-related crimes.

The principal federal law enforcement agencies that investigate identity

theft are the FBI, the United States Secret Service, the United States Postal

Inspection Service, SSA OIG, and ICE. Other agencies, as well as oth

federal Inspectors General, also may become involved in identity theft

investigations.

In investigating identity theft, law enforcement agencies use a wide

range of techniques, from physical surveillance to financial analysis to

computer forensics. Identity theft investigations are labor-intensive, a

because no single investigator can possess all of the skill sets needed to

handle each of these functions, the investigations often require multiple

detectives, analysts, and agents. In addition, when a suspected identi

In September 2006, 

the Michigan Attorney 

General won the conviction 

of a prison inmate who had 

orchestrated an elaborate 

scheme to claim tax 

refunds owed to low income 

renters through the state’s 

homestead property tax 

program. Using thousands of 

identities, the defendant and 

his cohorts were detected by 

alert U.S. Postal carriers who 

were suspicious of the large 

number of Treasury checks 

mailed to certain addresses.
COMBATING IDENTITY THEFT A Strategic Plan

theft involves large numbers of potential victims, investigative agencies

may need additional personnel to handle victim-witness coordination and

information issues.

During the last several years, federal and state agencies have aggressively

enforced the laws that prohibit the theft of identities. All 50 states a

the District of Columbia have some form of legislation that prohibits

identity theft, and in all those jurisdictions, except Maine, identity theft

can be a felony. See Volume II, Part H, for a description of state crimin

law enforcement efforts. In the federal system, a wide range of statuto

provisions is used to investigate and prosecute identity theft including,

most notably, the aggravated identity theft statute75 enacted in 2004, which

carries a mandatory two-year prison sentence. Since then, DOJ has ma

increasing use of the aggravated identity theft statute: in Fiscal Year 200

DOJ charged 507 defendants with aggravated identity theft, up from 226

defendants charged with aggravated identity theft in Fiscal Year 2005. 

many of these cases, the courts have imposed substantial sentences. S

Volume II, Part I, for a description of sentencing in federal identity theft

prosecutions.

The Department of Justice also has initiated many special identity theft

initiatives in recent years. The first of these, in May 2002, involved 

criminal prosecutions by U.S. Attorney’s Offices against 135 individuals

in 24 federal districts. Since then, identity theft has played an integral pa

in several initiatives that DOJ and other agencies have directed at online

economic crime. For example, “Operation Cyber Sweep,” a Novemb

2003 initiative targeting 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

Internet-related fraud and economic crime. See Volume II, Part J, for

description of special enforcement and prosecution initiatives.

1. Coordination and Intelligence/Information 

Federal law enforcement agencies have recognized the importance of

coordination among agencies and of information sharing between law

enforcement and the private sector. Coordination has been challengin

however, for several reasons: identity theft data currently reside 

numerous databases; there is no standard reporting form for all identity

theft complaints; and many law enforcement agencies have limited

resources. Given these challenges, law enforcement has responded to t

need for greater cooperation by, among other things, forming interagency

task forces and developing formal intelligence-sharing mechanisms. L

enforcement also has worked to develop methods of facilitating the timely

receipt and analysis of identity theft complaint data and other intelligence.

In a “Operation Firewall,” 

the Secret Service was 

responsible for the first-ever 

takedown of a large illegal 

online bazaar. Using the 

website www.shadowcrew.

com, the Shadowcrew 

organization had thousands 

of members engaged in the 

online trafficking of stolen 

identity information and 

documents, such as drivers’ 

licenses, passports, and 

Social Security cards, as 

well as stolen credit card, 

debit card, and bank account 

numbers. The Shadowcrew 

members trafficked in at 

least 1.7 million stolen credit 

card numbers and caused 

total losses in excess of 

$4 million. The Secret 

Service successfully shut 

down the website following 

a year-long undercover 

investigation, which resulted 

in the arrests of 21 individuals in the United States on 

criminal charges in October 

2004. Additionally, law 

enforcement officers in six 

foreign countries arrested or 

searched eight individuals.
A STRATEGY TO COMBAT

IDENTITY THEFT

a. Sources of Identity Theft Information

Currently, federal law enforcement has a number of sources of

information about identity theft. The primary source of dire

consumer complaint data is the FTC, which, through its Identity

Theft Clearinghouse, makes available to law enforcement through a

secure website the complaints it receives. Internet-related identity the

complaints also are received by the Internet Crime Complaint Center

(IC3), a joint venture of the FBI and National White Collar Crime

Center. The IC3 develops case leads from the complaints it receives a

sends them to law enforcement throughout the country. Additionall

a special component of the FBI that works closely with the IC3 is the

Cyber Initiative and Resource Fusion Unit (CIRFU). The CIRFU, bas

in Pittsburgh, facilitates the operation of the National Cyber Forensic

Training Alliance (NCFTA), a public/private alliance and fusion center,

by maximizing intelligence development and analytical resources

from law enforcement and critical industry partners. The U.S. Post

Inspection Service also hosts its Financial Crimes Database, a web-based

national database available to U.S. Postal Service inspectors for use in

analyzing mail theft and identity theft complaints received from various

sources. These are but a few of the sources of identity theft data f

law enforcement. See Volume II, Part K, for a description of how l

enforcement obtains and analyzes identity theft data.

Private sector entities—including the financial services industry and

credit reporting agencies—also are important sources of identity theft

information for law enforcement agencies. They often are best position

to identify early anomalies in various components of the e-commerce

environment in which their businesses interact, which may represent the

earliest indicators of an identity theft scenario. For this reason and other

federal law enforcement has undertaken numerous public- and privatesector collaborations in recent years to improve information sharing.

For example, corporations have placed analysts and investigators with

IC3 in support of initiatives and investigations. In addition, ITAC, t

cooperative initiative of the financial services industry, shares information

with law enforcement and the FTC to help catch and convict the criminals

responsible for identity theft. See Volume II, Part K, for a description 

other private sector sources of identity theft data. Such alliances enab

critical industry experts and law enforcement agencies to work together

to more expeditiously receive and process information and intelligence

vital both to early identification of identity theft schemes and rapid

development of aggressive investigations and mitigation strategies, such

as public service advisories. At the same time, however, law enforceme

agencies report that they have encountered obstacles in obtaining support

and assistance from key private-sector stakeholders in some cases, absent

legal process, such as subpoenas, to obtain information.
COMBATING IDENTITY THEFT A Strategic Plan

One barrier to more complete coordination is that identity theft

information resides in multiple databases, even within individual law

enforcement agencies. A single instance of identity theft may result 

information being posted at federal, state, and local law enforcement

agencies, credit reporting agencies, credit issuers, financial institutions,

telecommunications companies, and regulatory agencies. This, in tur

leads to the inefficient “stove-piping” of relevant data and intelligence.

Additionally, in many cases, agencies do not or cannot share information

with other agencies, making it difficult to determine whether an identity

theft complaint is related to a single incident or a series of incidents. Th

problem may be even more pronounced at the state and local levels.

b. Format for Sharing Information and Intelligence

A related issue is the inability of the primary law enforcement agencies

to communicate electronically using a standard format, which greatly

impedes the sharing of criminal law enforcement information. Wh

data collection systems use different formats to describe the same event

or fact, at least one of the systems must be reprogrammed to fit the other

program’s terms. Where several hundred variables are involved, t

programming resources required to connect the two databases can be an

insurmountable barrier to data exchange.

To address that concern, several law enforcement organizations, including

the International Association of Chiefs of Police’s (IACP) Private

Sector Liaison Committee and the Major Cities’ Chiefs (MCC), have

recommended developing a standard electronic identity theft police report

form. Reports that use a standard format could be shared among l

enforcement agencies and stored in a national repository for investigatory

purposes.

c. Mechanisms for Sharing Information

Law enforcement uses a variety of mechanisms to facilitate information

sharing and intelligence analysis in identity-theft investigations. S

Volume II, Part L, for a description of federal law enforcement outreach

efforts. As just one example, the Regional Information Sharing Syste

(RISS) Program is a long-standing, federally-funded program to support

regional law enforcement efforts to combat identity theft and other crimes.

Within that program, law enforcement has established intelligencesharing systems. These include, for example, the Regional Identity The

Network (RITNET), created to provide Internet-accessible identity theft

information for federal, state, and local law enforcement agencies within

the Eastern District of Pennsylvania. RITNET is designed to include da

from the FTC, law enforcement agencies, and the banking industry, and

allow investigators to connect crimes committed in various jurisdictions
A STRATEGY TO COMBAT

IDENTITY THEFT

and link investigators. It also will collect information on all report

frauds, regardless of size, thereby eliminating the advantage identity

thieves have in keeping theft amounts low.

Multi-agency working groups and task forces are another successful

investigative approach, allowing different agencies to marshal resources,

share intelligence, and coordinate activities. Federal authorities lead or colead over 90 task forces and working groups devoted (in whole or in par

to identity theft. See Volume II, Part M, for a description of interagen

working groups and task forces.

Despite these efforts, coordination among agencies can be improved.

Better coordination would help law enforcement officers “connect the

dots” in investigations and pool limited resources.

RECOMMENDATION: ESTABLISH A NATIONAL IDENTITY

THEFT LAW ENFORCEMENT CENT

The Task Force recommends that the federal government

establish, as resources permit, an interagency National Identity

Theft Law Enforcement Center to better consolidate, analyze,

and share identity theft information among law enforcement

agencies, regulatory agencies, and the private sector. Th

effort should be led by the Department of Justice and include

representatives of federal law enforcement agencies, including

the FBI, the Secret Service, the U.S. Postal Inspection Service,

the SSA OIG, and the FTC. Leveraging existing resource

increased emphasis should be placed on the analysis of identity

theft complaint data and other information and intelligence

related to identity theft from public and private sources, including

from identity theft investigations. This information should 

made available to appropriate law enforcement at all levels to

aid in the investigation, prosecution, and prevention of identity

theft crimes, including to target organized groups of identity

thieves and the most serious offenders operating both in the

United States and abroad. Effective mechanisms that enable l

enforcement officers from around the country to share, access,

and search appropriate law enforcement information aroundthe-clock, including through remote access, should also be

developed. As an example, intelligence from documents seized

during investigations could help facilitate the ability of agents

and officers to “connect the dots” between various investigations

around the country.

In a case prosecuted by the 

United States Attorney’s 

Office for the Eastern District 

of Pennsylvania, a gang 

purchased 180 properties 

using false or stolen names. 

The thieves colluded to 

procure inflated appraisals 

for the properties, obtained 

financing, and drained the 

excess profits for their own 

benefit, resulting in harm to 

the identity theft victims and 

to the neighborhood when 

most of the properties went 

into foreclosure.
COMBATING IDENTITY THEFT A Strategic Plan

RECOMMENDATION: DEVELOP AND PROMOT

THE ACCEPTANCE OF A UNIVERSAL IDENTITY THEF

REPORT FO

The Task Force recommended in its interim recommendations

that the federal government, led by the FTC, develop and promote a universal police report like that recommended by the

IACP and MCC—a standard document that an identity theft

victim could complete, print, and take to any local law enforcement agency for verification and incorporation into the police

department’s report system. This would make it easier for victims to obtain these reports, facilitate entry of the informati

into a central database that could be used by law enforcement to

analyze patterns and trends, and initiate more investigations of

identity theft.

Criminal law enforcers, the FTC, and representatives of financial

institutions, the consumer data industry, and consumer advocacy

groups have worked together to develop a standard form that

meets this need and captures essential information. The resulti

Identity Theft Complaint (“Complaint”) form was made

available in October 2006 via the FTC’s Identity Theft website,

www.ftc.gov/idtheft. Consumers can print copies of their completed Complaint and take it to their police station, where it c

be used as the basis for a police report. The Complaint provid

much greater specificity about the details of the crime than would

a typical police report, so consumers will be able to submit it to

credit reporting agencies and creditors to assist in resolving their

identity theft-related problems. Further, the information th

enter into the Complaint will be collected in the FTC’s Identity

Theft Data Clearinghouse, thus enriching this source of consumer complaints for law enforcement. This system also relieves t

burden on local law enforcement because consumers are completing the detailed Complaint before filing their police report.

RECOMMENDATION: ENHANCE INFORMATION SHARI

BETWEEN LAW ENFORCEMENT AND THE PRIVATE SEC

Because the private sector in general, and financial institutions

in particular, are an important source of identity theft-related

information for law enforcement, the Task Force recommends

the following steps to enhance information sharing between law

enforcement and the private sector:
A STRATEGY TO COMBAT

IDENTITY THEFT

Enhance Ability of Law Enforcement to Receive Information

From Financial Institutions. Section 609(e) of the Fair Credit

Reporting Act enables identity theft victims to receive identity

theft-related documents and to designate law enforcement

agencies to receive the documents on their behalf. Despite th

fact, law enforcement agencies have sometimes encountered

difficulties in obtaining such information without a subpoena.

By the second quarter of 2007, DOJ should initiate discussions

with the financial sector to ensure greater compliance with

this law, and should include other law enforcement agencies in

these discussions. DOJ, on an ongoing basis, should compi

any recommendations that may result from those discussions

and, where appropriate, relay those recommendations to the

appropriate private or public sector entity for action.

Initiate Discussions With the Financial Services Industry on 

Countermeasures to Identity Thieves.  Federal law enforceme

agencies, led by the U.S. Postal Inspection Service, should

continue discussions with the financial services industry as early

as the second quarter of 2007 to develop more effective fraud

prevention measures to deter identity thieves who acquire data

through mail theft. Discussions should include use of the Post

Inspection Service’s current Financial Industry Mail Security

Initiative. The Postal Inspection Service, on an ongoing basi

should compile any recommendations that may result from those

discussions and, where appropriate, relay those recommendations

to the appropriate private or public sector entity for action.

Initiate Discussions With Credit Reporting Agencies On Preventing

Identity Theft. By the second quarter of 2007, DOJ should

initiate discussions with the credit reporting agencies on possible

measures that would make it more difficult for identity thieves

to obtain credit based on access to a victim’s credit report. T

discussions should include other law enforcement agencies,

including the FTC. DOJ, on an ongoing basis, should compi

any recommendations that may result from the discussions and,

where appropriate, relay the recommendations to the appropriate

private or public sector entity for action.

2. Coordination With Foreign Law Enfor

Federal enforcement agencies have found that a significant portion of

the identity theft committed in the United States originates in other

countries. Therefore, coordination and cooperation with foreign l

enforcement is essential. A positive step by the United States in ensuri
COMBATING IDENTITY THEFT A Strategic Plan

such coordination was the ratification of the Convention on Cybercrime

(2001). The Cybercrime Convention is the first multilateral instrume

drafted to address the problems posed by the spread of criminal activity

on computer networks, including offenses that relate to the stealing of

personal information and the exploitation of that information to commit

fraud. The Cybercrime Convention requires parties to establish la

against these offenses, to ensure that domestic laws give law enforcement

officials the necessary legal authority to gather electronic evidence, and

to provide international cooperation to other parties in the fight against

computer-related crime. The United States participated in the drafting 

the Convention and, in November 2001, was an early signatory.

Because of the international nature of many forms of identity theft,

providing assistance to, and receiving assistance from, foreign law

enforcement on identity theft is critical for U.S. enforcement agencies.

Under current law, the United States generally is able to provide such

assistance, which fulfills our obligations under various treaties and

enhances our ability to obtain reciprocal assistance from foreign agencies.

Indeed, there are numerous examples of collaborations between U.S. and

foreign law enforcement in identity theft investigations.

Nevertheless, law enforcement faces several impediments in their ability

to coordinate efforts with foreign counterparts. First, even though feder

law enforcement agencies have successfully identified numerous foreign

suspects trafficking in stolen consumer information, their ability to arrest

and prosecute these criminals is very limited. Many countries do n

have laws directly addressing identity theft, or have general fraud laws

that do not parallel those in the United States. Thus, investigators 

the United States may be able to prove violations of American identity

theft statutes, yet be unable to show violations of the foreign country’s

law. This can impact cooperation on extradition or collection of eviden

necessary to prosecute offenders in the United States. Additionally, so

foreign governments are unwilling to cooperate fully with American law

enforcement representatives, or may cooperate but fail to aggressively

prosecute offenders or seize criminal assets.

Second, certain statutes governing foreign requests for electronic and

other evidence—specifically, 18 U.S.C. § 2703 and 28 U.S.C. § 1782—fail

to make clear whether, how, and in which court certain requests can

be fulfilled. This jurisdictional uncertainty has impeded the ability 

American law enforcement officers to assist their counterparts in other

countries who are conducting identity theft investigations.	

The FBI Legal Attache 

in Bucharest recently 

contributed to the 

development and launch 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 

Attache 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 Attache assisted 

the Romanian police and 

Ministry of Justice with the 

prosecution of Romanian 

subjects.
6

A STRATEGY TO COMBAT

IDENTITY THEFT

RECOMMENDATION: ENCOURAGE OTHER COUNTRI

ENACT SUITABLE DOMESTIC LEGISLATION CRIMINALIZIN

IDENTITY THEFT 

The Department of Justice, after consulting with the Department

of State, should formally encourage other countries to enact

suitable domestic legislation criminalizing identity theft. 

number of countries already have adopted, or are considering

adopting, criminal identity-theft offenses. In addition, sin

2005, the United Nations Crime Commission (UNCC) has

convened an international Expert Group to examine the

worldwide problem of fraud and identity theft. That Expe

Group is drafting a report to the UNCC (for presentation in 2007)

that is expected to describe the major trends in fraud and identity

theft in numerous countries and to offer recommendations on

best practices by governments and the private sector to combat

fraud and identity theft. DOJ should provide input to the Expe

Group concerning the need for the criminalization of identity

theft worldwide.

RECOMMENDATION: FACILITATE INVESTIGATION AND

PROSECUTION OF INTERNATIONAL IDENTITY THEFT 

ENCOURAGING OTHER NATIONS TO ACCEDE TO T

CONVENTION ON CYBERCRIME, OR TO ENSURE THAT

LAWS AND PROCEDURES ARE AT LEAST AS COMPREHE

Global acceptance of the Convention on Cybercrime will help

to assure that all countries have the legal authority to collect

electronic evidence and the ability to cooperate in trans-border

identity theft investigations that involve electronic data. T

U.S. government should continue its efforts to promote universal

accession to the Convention and assist other countries in bringing

their laws into compliance with the Convention’s standards. T

Department of State, in close coordination with the Department

of Justice and Department of Homeland Security, should lead

this effort through appropriate bilateral and multilateral outreach

mechanisms. Other agencies, including the Department 

Commerce and the FTC, should participate in these outreach

efforts as appropriate. This outreach effort began years ago in

number of international settings, and should continue until broad

international acceptance of the Convention on Cybercrime is

achieved.
COMBATING IDENTITY THEFT A Strategic Plan

RECOMMENDATION: IDENTIFY COUNTRIES THAT HA

BECOME SAFE HAVENS FOR PERPETRATORS OF IDENT

THEFT AND TARGET THEM FOR DIPLOMATIC AN

ENFORCEMENT INITIATIVES FORMULATED TO CHAN

THEIR PRACTICE

Safe havens for perpetrators of identity theft and individuals who

aid and abet such illegal activities should not exist. Howeve

the inaction of law enforcement agencies in some countries has

turned those countries into breeding grounds for sophisticated

criminal networks devoted to identity theft. Countries th

tolerate the existence of such criminal networks encourage their

growth and embolden perpetrators to expand their operations.

In 2007, the U.S. law enforcement community, with input

from the international law enforcement community, should

identify the countries that are safe havens for identity thieves.

Once identified, the U.S. government should use appropriate

diplomatic measures and any suitable enforcement mechanisms

to encourage those countries to change their practices.

RECOMMENDATION: ENHANCE THE U.S. GOVERNMENT

ABILITY TO RESPOND TO APPROPRIATE FORE

REQUESTS FOR EVIDENCE IN CRIMINAL CASES INVOLV

IDENTITY THEFT

The Task Force recommends that Congress clarify which courts

can respond to appropriate foreign requests for electronic and

other evidence in criminal investigations, so that the United

States can better provide prompt assistance to foreign law

enforcement in identity theft cases. This clarification c

be accomplished by amending 18 U.S.C. § 2703 and making

accompanying amendments to 18 U.S.C. §§ 2711 and 3127,

and by enacting a new statute, 18 U.S.C. § 3512, which would

supplement the foreign assistance authority of 28 U.S.C. § 1782.

Proposed language for these legislative changes is available in

Appendix D (text of amendments to 18 U.S.C. §§ 2703, 2711, and

3127, and text of new language for 18 U.S.C. § 3512).
A STRATEGY TO COMBAT

IDENTITY THEFT

RECOMMENDATION: ASSIST, TRAIN, AND SUPPORT FOR

LAW ENFORCEMEN

Because the investigation of major identity theft rings increasingly will require foreign cooperation, federal law enforcement

agencies, led by DOJ, FBI, Secret Service, USPIS, and ICE,

should assist, train, and support foreign law enforcement through

the use of Internet intelligence-collection entities, including IC3

and CIRFU, and continue to make it a priority to work with other

countries in joint investigations targeting identity theft. Th

work should begin in the third quarter of 2007.

3. Prosecution Approaches and Initi

As part of its effort to prosecute identity theft aggressively, DOJ, since

2002, has conducted a number of enforcement initiatives that have

focused, in whole or in part, on identity theft. In addition to broad

enforcement initiatives led by DOJ, various individual U.S. Attorney’s

Offices have undertaken their own identity theft efforts. For exampl

the U.S. Attorney’s Office in the District of Oregon has an identity theft

“fast track” program that requires eligible defendants to plead guilty to

aggravated identity theft and agree, without litigation, to a 24-month

minimum mandatory sentence. Under this program, it is contemplat

that defendants will plead guilty and be sentenced on the same day,

without the need for a pre-sentence report to be completed prior to the

guilty plea, and waive all appellate and post-conviction remedies. 

exchange for their pleas of guilty, defendants are not charged with the

predicate offense, such as bank fraud or mail theft, which would otherwise

result in a consecutive sentence under the United States Sentencing

Guidelines. In addition, two U.S. Attorney’s Offices have collaborat

on a special initiative to combat passport fraud, known as Operation

Checkmate. See Volume II, Part 

Notwithstanding these efforts, challenges remain for federal law

enforcement. Because of limited resources and a shortage of prosecutor

many U.S. Attorney’s Offices have monetary thresholds—i.e.,

requirements that a certain amount of monetary loss must have been

suffered by the victims—before the U.S. Attorney’s Office will open an

identity theft case. When a U.S. Attorney’s Office declines to open

case based on a monetary threshold, investigative agents cannot obtain

additional information through grand jury subpoenas that could help to

uncover more substantial monetary losses to the victims.
COMBATING IDENTITY THEFT A Strategic Plan

RECOMMENDATION: INCREASE PROSECUTIONS OF IDENT

THEFT 

The Task Force recommends that, to further increase the number

of prosecutions of identity thieves, the following steps should be

taken:

Designate An Identity Theft Coordinator for Each United States

Attorney’s Office To Design a Specific Identity Theft Program for 

Each District. DOJ should direct that each U.S. Attorney

Office, by June 2007, designate one Assistant U.S. Attorney who

should serve as a point of contact and source of expertise within

that office for other prosecutors and agents. That Assista

U.S. Attorney also should assist each U.S. Attorney in making

a district-specific determination about the areas on which to

focus to best address the problem of identity theft. For exampl

in some southwest border districts, identity theft may be best

addressed by stepping up efforts to prosecute immigration

fraud. In other districts, identity theft may be best addressed 

increasing prosecutions of bank fraud schemes or by making

an effort to add identity theft violations to the charges that

are brought against those who commit wire/mail/bank fraud

schemes through the misappropriation of identities.

Evaluate Monetary Thresholds for Prosecution. By June 2007,

the investigative agencies and U.S. Attorney’s Offices should

re-evaluate current monetary thresholds for initiating identity

theft cases and, specifically, should consider whether monetary

thresholds for accepting such cases for prosecution should

be lowered in light of the fact that investigations often reveal

additional loss and additional victims, that monetary loss

may not always adequately reflect the harm suffered, and that

the aggravated identity theft statute makes it possible for the

government to obtain significant sentences even in cases where

precisely calculating the monetary loss is difficult or impossible.

Encourage State Prosecution of Identity Theft. DOJ should explore

ways to increase resources and training for local investigators and

prosecutors handling identity theft cases. Moreover, each U.

Attorney, by June 2007, should engage in discussions with state

and local prosecutors in his or her district to encourage those

prosecutors to accept cases that do not meet appropriately-set

thresholds for federal prosecution, with the understanding that

these cases need not always be brought as identity theft cases.
A STRATEGY TO COMBAT

IDENTITY THEFT

Create Working Groups and Task Forces. By the end of 2007,

U.S. Attorneys and investigative agencies should create or make

increased use of interagency working groups and task forces

devoted to identity theft. Where funds for a task force a

unavailable, consideration should be given to forming working

groups with non-dedicated personnel.

RECOMMENDATION: CONDUCT TARGETED ENFORCEM

INITIATIVES

Law enforcement agencies should continue to conduct enforcement initiatives that focus exclusively or primarily on identity

theft. The initiatives should pursue the followin

Unfair or Deceptive Means to Make SSNs Available for Sale.

Beginning immediately, law enforcement should more

aggressively target the community of businesses on the Internet

that sell individuals’ SSNs or other sensitive information to

anyone who provides them with the individual’s name and

other limited information. The SSA OIG and other agenci

also should continue or initiate investigations of entities that

use unlawful means to make SSNs and other sensitive personal

information available for sale.

Identity Theft Related to the Health Care System. HHS shoul

continue to investigate identity theft related to Medicare fraud.

As part of this effort, HHS should begin to work with state

authorities immediately to provide for stronger state licensure and

certification of providers, practitioners, and suppliers. Schem

to defraud Medicare may involve the theft of beneficiaries’ and

providers’ identities and identification numbers, the opening

of bank accounts in individuals’ names, and the submission

of fraudulent Medicare claims. Medicare payment is link

to state licensure and certification of providers, practitioners,

and suppliers as business entities. Lack of state licensure a

certification laws and/or laws that do not require identification

and location information of owners and officers of providers,

practitioners and suppliers, can hamper the ability of HHS to

stop identity theft related to fraudulent billing of the Medicare

program.

Identity Theft By Illegal Aliens. Law enforcement agencie

particularly the Department of Homeland Security, should

conduct targeted enforcement initiatives directed at illegal aliens

who use stolen identities to enter or stay in the United States.
COMBATING IDENTITY THEFT A Strategic Plan

RECOMMENDATION: REVIEW CIVIL MONETARY PENAL

PROGRA

By the fourth quarter of 2007, federal agencies, including the

SEC, the federal bank regulatory agencies, and the Department

of Treasury, should review their civil monetary penalty programs

to assess whether they adequately address identity theft. If th

do not, analysis should be done as to what, if any, remedies,

including legislation, would be appropriate, and any such

legislation should be proposed by the first quarter of 2008. If

federal agency does not have a civil monetary penalty program,

the establishment of such a program with respect to identity theft

should be considered.

4. Statutes Criminalizing Identity-Thef

Offenses: The 

Federal law enforcement has successfully investigated and prosecuted

identity theft under a variety of criminal statutes. Effective prosecuti

can be hindered in some cases, however, as a result of certain gaps in those

statutes. At the same time, a gap in one aspect of the U.S. Sentenci

Guidelines has precluded some courts from enhancing the sentences

for some identity thieves whose conduct affected multiple victims. S

Volume II, Part N, for an additional description of federal criminal

statutes used to prosecute identity theft.

a. The Identity Theft Statutes

The two federal statutes that directly criminalize identity theft are the

identity theft statute (18 U.S.C. § 1028(a)(7)) and the aggravated identity

theft statute (18 U.S.C. § 1028A(a)). The identity theft statute general

prohibits the possession or use of a means of identification of a person in

connection with any unlawful activity that either constitutes a violation of

federal law or that constitutes a felony under state or local law.76 Similarl

the aggravated identity theft statute generally prohibits the possession or

use of a means of identification of another person during the commission

of, or in relation to, any of several enumerated federal felonies, and

provides for enhanced penalties in those situations.

There are two gaps in these statutes, however. First, because both statut

are limited to the illegal use of a means of identification of “a person,”

it is unclear whether the government can prosecute an identity thief who

misuses the means of identification of a corporation or organization,

such as the name, logo, trademark, or employer identification number of

a legitimate business. This gap means that federal prosecutors cannot u

those statutes to charge identity thieves who, for example, create and use
A STRATEGY TO COMBAT

IDENTITY THEFT

counterfeit documents or checks in the name of a corporation, or who

engage in phishing schemes that use an organization’s name. Second, t

enumerated felonies in the aggravated identity theft statute do not include

certain crimes that recur in identity theft and fraud cases, such as mail

theft, uttering counterfeit securities, tax fraud, and conspiracy to commit

certain offenses.

b. Computer-Related Identity Theft Statute

Two of the federal statutes that apply to computer-related identity theft

have similar limitations that preclude their use in certain important

circumstances. First, 18 U.S.C. § 1030(a)(2) criminalizes the the

of information from a computer. However, federal courts only ha

jurisdiction if the thief uses an interstate communication to access the

computer (unless the computer belongs to the federal government or a

financial institution). As a result, the theft of personal information eith

by a corporate insider using the company’s internal local networks, or

by a thief intruding into a wireless network, generally would not involve

an interstate communication and could not be prosecuted under this

statute. In one case in North Carolina, for instance, an individual bro

into a hospital computer’s wireless network and thereby obtained patient

information. State investigators and the victim asked the United Stat

Attorney’s Office to support the investigation and charge the criminal.

Because the communications occurred wholly intrastate, however, no

federal law criminalized the conduct.

A second limitation is found in 18 U.S.C. § 1030(a)(5), which criminalizes

actions that cause “damage” to computers, i.e., that impair the

“integrity or availability” of data or computer systems.77 Absent speci

circumstances, the loss caused by the criminal conduct must exceed $5,000

to constitute a federal crime. Many identity thieves obtain person

information by installing malicious spyware, such as keyloggers, on many

individuals’ computers. Whether the programs succeed in obtaining t

unsuspecting computer owner’s financial data, these sorts of programs

harm the “integrity” of the computer and data. Nevertheless, it is oft

difficult or impossible to measure the loss this damage causes to each

computer owner, or to prove that the total value of these many small

losses exceeds $5,000.

c. Cyber-Extortion Statute

Another federal criminal statute 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 provision, whi

prohibits the transmission of a threat “to cause damage to a protected

computer,”78 is used to prosecute criminals who threaten to delete data,
COMBATING IDENTITY THEFT A Strategic Plan

crash computers, or knock computers off of the Internet using a denial of

service attack. Some cyber-criminals extort companies, however, witho

explicitly threatening to cause damage to computers. Instead, they ste

confidential data and then threaten to make it public if their demands are

not met. In other cases, the criminal causes the damage first—such as 

accessing a corporate computer without authority and encrypting critical

data—and then threatens not to correct the problem unless the victim

pays. Thus, the requirement in section 1030(a)(7) that the defendant mu

explicitly “threaten to cause damage” can preclude successful prosecutions

for cyber-extortion under this statute under certain circumstances.

d. Sentencing Guidelines Governing Identity Theft

In recent years, the courts have created some uncertainty about the

applicability of the “multiple victim enhancement” provision of the U.S.

Sentencing Guidelines in identity theft cases. This provision allows cour

to increase the sentence for an identity thief who victimizes more than

one person. It is unclear, however, whether this sentencing enhanceme

applies when the victims have not sustained actual monetary loss. F

example, in some jurisdictions, when a financial institution indemnifies 20

victims of unauthorized charges to their credit cards, the courts consider

the financial institution to be the only victim. In such cases, the identi

thief therefore may not be penalized for having engaged in conduct that

harmed 20 people, simply because those 20 people were later indemnified.

This interpretation of the Sentencing Guidelines conflicts with a primary

purpose of the Identity Theft and Assumption Deterrence Act of 1998: 

vindicate the interests of individual identity theft victims.79

RECOMMENDATION: CLOSE THE GAPS IN FEDERAL CRIMIN

STATUTES USED TO PROSECUTE IDENTITY-THEFT REL

OFFENSES TO ENSURE INCREASED FEDERAL PROSEC

OF THESE CRIME

The Task Force recommends that Congress take the following

legislative actions:

Amend the Identity Theft and Aggravated Identity Theft Statutes 

to Ensure That Identity Thieves Who Misappropriate Information 

Belonging to Corporations and Organizations Can Be Prosecuted.

Proposed amendments to 18 U.S.C. §§ 1028 and 1028A a

available in Appendix E.
A STRATEGY TO COMBAT

IDENTITY THEFT

Add Several New Crimes to the List of Predicate Offenses for 

Aggravated Identity Theft Offenses. The aggravated identity

theft statute, 18 U.S.C. § 1028A, should include other federal

offenses that recur in various identity-theft and fraud cases—mail

theft, uttering counterfeit securities, and tax fraud, as well as

conspiracy to commit specified felonies already listed in 18

U.S.C. § 1028A—in the statutory list of predicate offenses for that

offense. Proposed additions to 18 U.S.C. § 1028A are contain

in Appendix E.

Amend the Statute That Criminalizes the Theft of Electronic Data By 

Eliminating the Current Requirement That the Information Must Have

Been Stolen Through Interstate Communications. The proposed

amendment to 18 U.S.C. § 1030(a)(2) is available in Appendix 

Penalize Malicious Spyware and Keyloggers. The statutory

provisions in 18 U.S.C. § 1030(a)(5) should be amended to

penalize appropriately the use of malicious spyware and

keyloggers, by eliminating the current requirement that the

defendant’s action must cause “damage” to computers and that

the loss caused by the conduct must exceed $5,000. Propos

amendments to 18 U.S.C. §§ 1030(a)(5), (c), and (g), and the

accompanying amendment to 18 U.S.C. § 2332b(g), are included

in Appendix G.

Amend the Cyber-Extortion Statute to Cover Additional, Alternate 

Types of Cyber-Extortion. The proposed amendment to 18 U.S.C.

§ 1030(a)(7) is available in Appendix H.

RECOMMENDATION: ENSURE THAT AN IDENTITY THIEF

SENTENCE CAN BE ENHANCED WHEN THE CRIMINAL

CONDUCT AFFECTS MORE THAN ONE VICT

The Sentencing Commission should amend the definition of

“victim,” as that term is used under United States Sentencing

Guideline section 2B1.1, to state clearly that a victim need not

have sustained an actual monetary loss. This amendment wi

ensure that courts can enhance the sentences imposed on identity

thieves who cause harm to multiple victims, even when that harm

does not result in any monetary loss to the victims. The propos

amendment to United States Sentencing Guideline section 2B1.1

is available in Appendix I.
COMBATING IDENTITY THEFT A Strategic Plan

5. Training of Law Enforcement Officers and Pros

Training can be the key to effective investigations and prosecutions, and

much has been done in recent years to ensure that investigators and prosecutors have been trained on topics relating to identity theft. In additi

to ongoing training by U.S. Attorney’s Offices, for example, several federal

law enforcement agencies—including DOJ, the Postal Inspection Service,

the Secret Service, the FTC, and the FBI—along with the American Association of Motor Vehicle Administrators (AAMVA) have sponsored jointly

over 20 regional, one-day training seminars on identity fraud for state and

local law enforcement agencies across the country. See Volume II, Part 

for a description of training by and for investigators and prosecutors.

Nonetheless, the amount, focus, and coordination of law enforcement

training should be expanded. Identity theft investigations and prosecutions involve particular challenges—including the need to coordinate wi

foreign authorities, some difficulties with the application of the Sentencing Guidelines, and the challenges that arise from the inevitable gap in

time between the commission of the identity theft and the reporting of the

identity theft—that warrant more specialized training at all levels of law

enforcement.

RECOMMENDATION: ENHANCE TRAINING FOR L

ENFORCEMENT OFFICERS AND PROSEC

Develop Course at National Advocacy Center (NAC) Focused 

Solely on Investigation and Prosecution of Identity Theft. By t

third quarter of 2007, DOJ’s Office of Legal Education should

complete the development of a course specifically focused on

identity theft for prosecutors. The identity theft course shou

include, among other things: a review of the scope of t

problem; a review of applicable statutes, forfeiture and sentencing

guideline applications; an outline of investigative and case

presentation techniques; training on addressing the unique needs

of identity theft victims; and a review of programs for better

utilizing collective resources (working groups, task forces, and

any “model programs”— fast track programs, etc.).

Increase Number of Regional Identity Theft Seminars. In 20

the federal agencies and the AAMVA held a number of regional

identity theft seminars for state and local law enforcement

officers. In 2007, the number of seminars should be increase

Additionally, the participating entities should coordinate with the

Task Force to provide the most complete, targeted, and up-to-date

training materials.
7

A STRATEGY TO COMBAT

IDENTITY THEFT

Increase Resources for Law Enforcement Available on the Internet.

The identity theft clearinghouse site, www.idtheft.gov, should be

used as the portal for law enforcement agencies to gain access to

additional educational materials on investigating identity theft

and responding to victims.

Review Curricula to Enhance Basic and Advanced Training on

Identity Theft. By the fourth quarter of 2007, federal investigative

agencies should review their own training curricula, and curricula

of the Federal Law Enforcement Training Center, to ensure that

they are providing the most useful training on identity theft.

6. Measuring Success of Law Enforcement

One shortcoming in the federal government’s ability to understand and

respond effectively to identity theft is the lack of comprehensive statistical

data about the success of law enforcement efforts to combat identity theft.

Specifically, there are few benchmarks that measure the activities of the

various components of the criminal justice system in their response to

identity thefts occurring within their jurisdictions, little data on state and

local enforcement, and little information on how identity theft incidents

are being processed in state courts.

Addressing these questions requires benchmarks and periodic data

collection. The Bureau of Justice Statistics (BJS) has platforms in plac

as well as the tools to create new platforms, to obtain information about

identity theft from victims and the response to identity theft from law

enforcement agencies, state and federal prosecutors, and courts.

RECOMMENDATION: ENHANCE THE GATHERING O

STATISTICAL DATA MEASURING THE CRIMINAL JUST

SYSTEM’S RESPONSE TO IDENTITY THEF

Gather and Analyze Statistically Reliable Data from Identity Theft 

Victims. The BJS and FTC should continue to gather and analyze

statistically reliable data from identity theft victims. The B

should conduct its surveys in collaboration with subject matter

experts from the FTC. BJS should add additional questions 

identity theft to the household portion of its National Crime

Victimization Survey (NCVS), and conduct periodic supplements

to gather more in-depth information. The FTC should condu

a general identity theft survey approximately every three years,

independently or in conjunction with BJS or other government

agencies. The FTC also should conduct surveys focused mo

narrowly on issues related to the effectiveness of and compliance

with the identity theft-related provisions of the consumer

protection laws it enforces.
COMBATING IDENTITY THEFT A Strategic Plan

Expand Scope of National Crime Victimization Survey (NCVS).

The scope of the annual NCVS should be expanded to collect

information about the characteristics, consequences, and extent

of identity theft for individuals ages 12 and older. Currentl

information on identity theft is collected only from the household

respondent and does not capture data on multiple victims in the

household or multiple episodes of identity theft.

Review of Sentencing Commission Data. DOJ and the FTC shoul

systematically review and analyze U.S. Sentencing Commission

identity theft-related case files every two to four years, and should

begin in the third quarter of 2007.

Track Prosecutions of Identity Theft and the Amount of Resources

Spent. In order to better track resources spent on identity

theft cases, DOJ should, by the second quarter of 2007, create

an “Identity Theft” category on the monthly report that is

completed by all Assistant United States Attorneys, and should

revise its departmental case tracking application to allow for the

reporting of offenses by individual subsections of section 1028.

Additionally, BJS should incorporate additional questions in the

National Survey of Prosecutors to better understand the impact

identity theft is having on prosecutorial resources.

Conduct Targeted Surveys. In order to expand law enforcement

knowledge of the identity theft response and prevention activities

of state and local police, BJS should undertake new data

collections in specified areas. Proposed details of those surve

are included in Appendix J.
IV. Conclusion: The Way Forward

There is no magic bullet that will eradicate identity theft. To successful

combat identity theft and its effects, we must keep personal information out of

the hands of thieves; take steps to prevent an identity thief from misusing any

data that may end up in his hands; prosecute him vigorously if he succeeds in

committing the crime; and do all we can to help the victims recover.

Only a comprehensive and fully coordinated strategy to combat identity

theft—one that encompasses effective prevention, public awareness and

education, victim assistance, and law enforcement measures, and that fully

engages federal, state, and local authorities and the private sector—will have

any chance of solving the problem. This proposed strategic plan strives 

set out such a comprehensive approach to combating identity theft, but it

is only the beginning. Each of the stakeholders—consumers, business a

government—must fully and actively participate in this fight for us to succeed,

and must stay attuned to emerging trends in order to adapt and respond to

developing threats to consumer well being.

CONCLUSION
COMBATING IDENTITY THEFT A Strategic Plan

Appendices

APPENDIX A

Identity Theft Task Force’s Guidance Memorandum on Data Breach 

Protocol

	 	 	 	 	 	 	 	 	 	 	
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APPENDIX B

Proposed Routine Use Langua

Subsection (b)(3) of the Privacy Act provides that information from an

agency’s system of records may be disclosed without a subject individual’s

consent if the disclosure is “for a routine use as defined in subsection (a)(7) of

this section and described under subsection (e)(4)(D) of this section.” 5 U.S.C.

§ 552a(b)(3). Subsection (a)(7) of the Act states that “the term ‘routine us

means, with respect to the disclosure of a record, the use of such record for a

purpose which is compatible with the purpose for which it was collected.”

5 U.S.C. § 552a(a)(7). The Office of Management and Budget, whi

pursuant to subsection (v) of the Privacy Act has guidance and oversight

responsibility for the implementation of the Act by federal agencies,

has advised that the compatibility concept encompasses (1) functionally

equivalent uses, and (2) other uses that are necessary and proper. 52 Fed. Re

12,990, 12,993 (Apr. 20, 1987). In recognition of and in accordance wi

the Act’s legislative history, OMB in its initial Privacy Act guidance stated

that “[t]he term routine use . . . recognizes that there are corollary purposes

‘compatible with the purpose for which [the information] was collected’ that

are appropriate and necessary for the efficient conduct of government and in

the best interest of both the individual and the public.” 40 Fed. Reg. 28,94

28,953 (July 9, 1975). A routine use to provide for disclosure in connecti

with response and remedial efforts in the event of a breach of federal data

would certainly qualify as such a necessary and proper use of information—

a use that is in the best interest of both the individual and the public.

Subsection (e)(4)(D) of the Privacy Act requires that agencies publish

notification in the Federal Register of “each routine use of the records

contained in the system, including the categories of users and the purpose

of such use.” 5 U.S.C. § 552a(e)(4)(D). The Department of Justice

developed the following routine use that it plans to apply to its Privacy Act

systems of records, and which allows for disclosure as follows:80

To appropriate agencies, entities, and persons when (1) the Department

suspects or has confirmed that the security or confidentiality of

information in the system of records has been compromised; (2) the

Department has determined that as a result of the suspected or confirmed

compromise there is a risk of harm to economic or property interests,

identity theft or fraud, or harm to the security or integrity of this system

or other systems or programs (whether maintained by the Department or

another agency or entity) that rely upon the compromised information;

and (3) the disclosure made to such agencies, entities, and persons is

reasonably necessary to assist in connection with the Department’s

efforts to respond to the suspected or confirmed compromise and prevent,

minimize, or remedy such harm.
Agencies should already have a published system of records notice for each of

their Privacy Act systems of records. To add a new routine use to an agency

existing systems of records, an agency must simply publish a notice in the

Federal Register amending its existing systems of records to include the new

routine use.

Subsection (e)(11) of the Privacy Act requires that agencies publish a Federal

Register notice of any new routine use at least 30 days prior to its use and

“provide an opportunity for interested persons to submit written data, views,

or arguments to the agency.” 5 U.S.C. § 552a(e)(11). Additionally, subsec

(r) of the Act requires that an agency provide Congress and OMB with

“adequate advance notice” of any proposal to make a “significant change in

a system of records.” 5 U.S.C. § 552a(r). OMB has stated that the addi

of a routine use qualifies as a significant change that must be reported to

Congress and OMB and that such notice is to be provided at least 40 days

prior to the alteration. See Appendix I to OMB Circular No. A-130—Feder

Agency Responsibilities for Maintaining Records About Individuals, 61 Fed.

Reg. 6435, 6437 (Feb. 20, 1996). Once a notice is prepared for publicatio

the agency would send it to the Federal Register, OMB, and Congress, usually

simultaneously, and the proposed change to the system (i.e., the new routine

use) would become effective 40 days thereafter. See id. at 6438 (regardi

timing of systems of records reports and noting that notice and comment

period for routine uses and period for OMB and congressional review may

run concurrently). Recognizing that each agency likely will receive differe

types of comments in response to its notice, the Task Force recommends that

OMB work to ensure accuracy and consistency across the range of agency

responses to public comments.

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APPENDIX C

Text of Amendments to 18 U.S.C. §§ 3663(b) and 3663A(b

Proposed Language: 

(a)	 Section 3663 of Title 18, United States Code, is amended by:

(1) 	 Deleting “and” at the end of paragraph (4) of subsection (b);

(2) 	 Deleting the period at the end of paragraph (5) of subsection (b)

and inserting in lieu thereof “; and”; and

(3) 	 Adding the following after paragraph (5) of subsection (b

	 “(6) in the case of an offense under sections 1028(a)(7) or 1028A(a)

of this title, pay an amount equal to the value of the victim’s time

reasonably spent in an attempt to remediate intended or actual

harm incurred from the offense.”.

Make conforming changes to the following:

(b)	 Section 3663A of Title 18, United States Code, is amended by:

(1) 	 Adding the following after Section 3663A(b)(4)

	 “(5) in the case of an offense under this title, section 1028(a)(7) or

1028A(a), pay an amount equal to the value of the victim’s time

reasonably spent in an attempt to remediate intended or actual

harm incurred from the offense.”.

Section Analysis

These new subsections provide that defendants may be ordered to pay restitution to victims of identity theft and aggravated identity theft for the value of

the victim’s time spent remediating the actual or intended harm of the offense. Restitution could therefore include an amount equal to the value of t

victim’s time spent clearing a victim’s credit report or resolving charges made

by the perpetrator for which the victim has been made responsible.

New subsections 3663(b)(6) and 3663A(b)(5) of Title 18 would make clear

that restitution orders may include an amount equal to the value of the

victim’s time spent remediating the actual or intended harm of the identity

theft or aggravated identity theft offense. The federal courts of appea

have interpreted the existing provisions of Section 3663 in such a way that

would likely preclude the recovery of such amounts, absent explicit statutory

authorization. For example, in United States v. Arvanitis, 902 F.3d 489 (7

Cir. 1990), the court held that restitution ordered for offenses resulting in

loss of property must be limited to recovery of property which is the subject

of the offenses, and may not include consequential damages. Similarly, 

United States v. Husky, 924 F.2d 223 (11th Cir. 1991), the Eleventh Circuit held
that the list of compensable expenses in a restitution statute is exclusive, and

thus the district court did not have the authority to order the defendant to

pay restitution to compensate the victim for mental anguish and suffering.

Finally, in United States v. Schinnell, 80 F.3d 1064 (5th Cir. 1996), the court

held that restitution was not allowed for consequential damages involved in

determining the amount of loss or in recovering those funds; thus, a victim

of wire fraud was not entitled to restitution for accounting fees and costs to

reconstruct bank statements for the time period during which the defendant

perpetuated the scheme, for the cost of temporary employees to reconstruct

monthly bank statements, and for the costs incurred in borrowing funds to

replace stolen funds. These new subsections will provide statutory authori

for inclusion of amounts equal to the value of the victim’s time reasonably

spent remediating the harm incurred as a result of the identity theft offense.

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APPENDIX D

Text of Amendments to 18 U.S.C. §§ 2703, 2711 and 3127, and Text of

New Language for 18 U.S.C. § 351

The basis for these proposals is set forth in Section III.2 of the strategic plan,

which describes coordination with foreign law enforcement.

Proposed Language: 

§ 2703. Required disclosure of customer communications or records

(a) Contents of wire or electronic communications in electronic 

storage.—A governmental entity may require the disclosure by a

provider of electronic communication service of the contents of a

wire or electronic communication, that is in electronic storage in an

electronic communications system for one hundred and eighty days or

less, only pursuant to a warrant issued using the procedures described

in the Federal Rules of Criminal Procedure by a court with jurisdiction

over the offense under investigation by a court o  competent jurisdictio

or an equivalent State warrant. A governmental entity may require

the disclosure by a provider of electronic communications services of

the contents of a wire or electronic communication that has been in

electronic storage in an electronic communications system for more than

one hundred and eighty days by the means available under subsection (b)

of this section.

(b) Contents of wire or electronic communications in a remote 

computing service.—(1) A governmental entity may require a provider

of remote computing service to disclose the contents of any wire or

electronic communication to which this paragraph is made applicable by

paragraph (2) of this subsection—

(A)	 without required notice to the subscriber or customer, if the

governmental entity obtains a warrant issued using the procedures

described in the Federal Rules of Criminal Procedure by a court

with jurisdiction over the offense under investigation by a court o

competent jurisdiction or equivalent State warrant; or

(B) 	 with prior notice from the governmental entity to the subscriber or

customer if the governmental entity—

(i)	 uses an administrative subpoena authorized by a Federal or

State statute or a Federal or State grand jury or trial subpoena;

or

(ii)	 obtains a court order for such disclosure under subsection (d)

of this section;

except that delayed notice may be given pursuant to section 2705 of this title.
(c) Records concerning electronic communication service or remote 

computing service.—(1) A governmental entity may require a

provider of electronic communication service or remote computing

service to disclose a record or other information pertaining to a

subscriber to or customer of such service (not including the contents of

communications) only when the governmental entity—

(A) 	 obtains a warrant issued using the procedures described in the

Federal Rules of Criminal Procedure by a court with jurisdiction

over the offense under investigation by a court o  competen

jurisdiction or equivalent State warrant;

§ 2711. Definitions for chapter

As used in this chapter—

(1)	 the terms defined in section 2510 of this title have, respectively, the

definitions given such terms in that section;

(2) 	 the term “remote computing service” means the provision to the public

of computer storage or processing services by means of an electronic

communications system; and

(3) 	 the term “court of competent jurisdiction” has the meaning assigned

by section 3127, and includes any Federal court within that definition,

without geographic limitation means—

(A) any district court of the United States (including a magistrate judge of 

such a court) or any United States court of appeals that– 

(i) has jurisdiction over the offense being investigated; 

(ii) is in or for a district in which the provider of electronic 

communication service is located or in which the wire or electronic 

communications, records, or other information are stored; or

(iii) is acting on a request for foreign assistance pursuant to section 

3512 of this title; or 

(B) a court of general criminal jurisdiction of a State authorized by the law 

of that State to issue search warrants.

§ 3127. Definitions for chapter

As used in this chapter—

(1) 	 the terms “wire communication”, “electronic communication”,

“electronic communication service”, and “contents” have the meanings

set forth for such terms in section 2510 of this title;

(2) 	 the term “court of competent jurisdiction” means—

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(A) 	 any district court of the United States (including a magistrate

judge of such a court) or any United States court of appeals having

jurisdiction over the offense being investigated tha

(i) has jurisdiction over the offense being investigated; 

(ii) is in or for a district in which the provider of electronic 

communication service is located; 

(iii) is in or for a district in which a landlord, custodian, or other 

person subject to 3124(a) or (b) is located; or

(iv) is acting on a request for foreign assistance pursuant to section 

3512 of this title; or

(B) 	 a court of general criminal jurisdiction of a State authorized by

the law of that State to enter orders authorizing the use of a pen

register or a trap and trace device;

§ 3512. Foreign requests for assistance in criminal investigations and prosecutions:

(a) Upon application of an attorney for the government, a Federal judge may 

issue such orders as may be necessary to execute a request from a foreign 

authority for assistance in the investigation or prosecution of criminal 

offenses, or in proceedings related to the prosecution of criminal offenses 

including but not limited to proceedings regarding forfeiture, sentencing, 

and restitution. Such orders may include the issuance of a search warrant 

as provided under Rule 41 of the Federal Rules of Criminal Procedure, a 

warrant or order for contents of stored wire or electronic communications or 

for records related thereto as provided under 18 U.S.C. § 2703, an order for a 

pen register or trap and trace device as provided under 18 U.S.C. § 3123, or 

an order requiring the appearance of a person for the purpose of providing 

testimony or a statement, or requiring the production of documents or other 

things, or both. 

(b) In response to an application for execution of a request from a foreign 

authority as described in subsection (a) , a Federal judge may also issue an 

order appointing a person to direct the taking of testimony or statements 

or of the production of documents or other things, or both. A person so 

appointed may be authorized to – 

(1) issue orders requiring the appearance of a person, or the 

production of documents or other things, or both; 

(2) administer any necessary oath; and

(3) take testimony or statements and receive documents or other 

things.
9

(c) Except as provided in subsection (d), an application for execution of a request 

from a foreign authority under this section may be filed – 

(1) in the district in which a person who may be required to appear resides 

or is located or in which the documents or things to be produced are 

located; 

(2) in cases in which the request seeks the appearance of persons or 

production of documents or things that may be located in multiple 

districts, in any one of the districts in which such a person, documents 

or things may be located; or 

(3) in any case, the district in which a related Federal criminal investigation 

or prosecution is being conducted, or in the District of Columbia.

(d) An application for a search warrant under this section, other than an 

application for a warrant issued as provided under 18 U.S.C. § 2703, must be 

filed in the district in which the place or person to be searched is located. 

(e) A search warrant may be issued under this section only if the foreign offense 

for which the evidence is sought involves conduct that, if committed in the 

United States, would be considered an offense punishable by imprisonment 

for more than one year under federal or state law. 

(f) Except as provided in subsection (d), an order or warrant issued pursuant to 

this section may be served or executed in any place in the United States. 

(g) This section does not preclude any foreign authority or an interested person 

from obtaining assistance in a criminal investigation or prosecution pursuant 

to 28 U.S.C. § 1782.

(h) As used in this section – 

(1) the term “foreign authority” means a foreign judicial authority, a 

foreign authority responsible for the investigation or prosecution of 

criminal offenses or for proceedings related to the prosecution of 

criminal offenses, or an authority designated as a competent authority 

or central authority for the purpose of making requests for assistance 

pursuant to an agreement or treaty with the United States regarding 

assistance in criminal matters; and 

(2) the terms “Federal judge” and “attorney for the Government” have 

the meaning given such terms for the purposes of the Federal Rules of 

Criminal Procedure. 

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APPENDIX E

Text of Amendments to 18 U.S.C. §§ 1028 and 1028

The basis for these proposed amendments is set forth in Section III.D.4.a of

the strategic plan, which describes gaps in the identity theft statutes.

Proposed Amendment to Aggravated Identity Theft Statute to Add 

Predicate Offenses

Congress should amend the aggravated identity theft offense (18 U.S.C. §

1028A) to include other federal offenses that recur in various identity-theft

and fraud cases, specifically, mail theft (18 U.S.C. § 1708), uttering counterfeit

securities (18 U.S.C. § 513), and tax fraud (26 U.S.C. §§ 7201, 7206, and

7207), as well as conspiracy to commit specified felonies already listed in

section 1028A—in the statutory list of predicate offenses for that offense

(18 U.S.C. § 1028A(c)).

Proposed Additions to Both Statutes to Include Misuse of Identifying 

Information of Organizations

(a) 	 Section 1028(a) of Title 18, United States Code, is amended by inserti

in paragraph (7) the phrase “(including an organization as defined in

Section 18 of this Title)” after the word “person”.

	 Section 1028A(a) of Title 18, United States Code, is amended by

inserting in paragraph (1) the phrase “(including an organization as

defined in Section 18 of this Title)” after the word “person”.

(b)	 Section 1028(d)(7) of Title 18, United States Code, is amended by

inserting in paragraph (7) the phrase “or other person” after the word

“individual”.

Rationale

Corporate identity theft whereby criminals assume the identity of corporate

entities to cloak fraudulent schemes in a misleading and deceptive air

of legitimacy have become rampant. Criminals routinely engage 

unauthorized “appropriation” of legitimate companies’ names and logos in a

variety of contexts: misrepresenting themselves as officers or employees of a

corporation, sending forged or counterfeit documents or financial instruments

to victims to improve their aura of legitimacy, and offering nonexistent

benefits (e.g., loans and credit cards) in the names of companies.

One egregious example of corporate identity theft is represented on

the Internet by the practice commonly known as “phishing,” whereby

criminals electronically assume the identity of a corporation in order to

defraud unsuspecting recipients of email solicitations to voluntarily disclose

identifying and financial account information. This personal informati

is then used to further the underlying criminal scheme—for example, to
scavenge the bank and credit card accounts of these unwitting consumer

victims. Phishing is just one example of how criminals in mass-marketi

fraud schemes incorporate corporate identity theft into their schemes, though

phishing also is designed with individual identity theft in mind.

Phishing has become so routine in many major fraud schemes that no

particular corporation can be easily singled out as having suffered a special

“horror story” which stands above the rest. In August 2005, the “AntiPhishing Working Group” determined in just that month alone, there we

5,259 unique phishing websites around the world. By December 2005, th

number had increased to 7,197, and there were 15,244 unique phishing

reports. It was also reported in August 2005, that 84 corporate entities’ nam

(and even logos and web content) were “hijacked” (i.e., misused) in phishing

attacks, though only 3 of these corporate brands accounted for 80 percent of

phishing campaigns. By December 2005 the number of victimized corpora

entities had increased to 120. The financial sector is and has been the mo

heavily targeted industry sector in phishing schemes, accounting for nearly

85 percent of all phishing attacks. See, e.g. http://antiphishing.org/apw

phishing_activity_report_august_05.pdf.

In addition, major companies have reported to the Department of Justice

that their corporate names, logos, and marks are often being misused in other

types of fraud schemes. These include telemarketing fraud schemes in whi

communications purport to come from legitimate banks or companies or offer

products or services from legitimate banks and companies, and West African

fraud schemes that misuse legitimate banks and companies’ names in communications with victims or in counterfeit checks.

Uncertainty has arisen as to whether Congress intended Sections 1028(a)(7)

and 1028A(a) of Title 18, United States Code to apply only to “natural”

persons or to also protect corporate entities. These two amendments wou

clarify that Congress intended that these statute apply broadly and may be

used against phishing directed against victim corporate entities.

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APPENDIX F

Text of Amendment to 18 U.S.C. § 1030(a)(2

The basis for this proposed amendment is set forth in Section III.D.4.b of

the strategic plan, which describes gaps in the computer-related identity theft

statutes.

Proposed Language:

1030(a) Whoever—

(2)	 intentionally accesses a computer without authorization or exceeds

authorized access, and thereby obtains–

(A)	 information contained in a financial record of a financial

institution, or of a card issuer as defined in section 1602(n) of title

15, or contained in a file of a consumer reporting agency on a

consumer, as such terms are defined in the Fair Credit Reporting

Act (15 U.S.C. 1681 et seq.);

(B)	 information from any department or agency of the United States;

or

(C)	 information from any protected computer if the conduct involved

an interstate or foreign communication;
APPENDIX G

Text of Amendments to 18 U.S.C. §§ 1030(a)(5), (c), and (g), and to 18

U.S.C. § 2332

The basis for these proposed amendments is set forth in Section III.D.4.b of

the strategic plan, which describes gaps in the computer-related identity theft

statutes.

Proposed Language:

18 U.S.C. § 1030 

(a) 	 Whoever—

(5)

(A)	 (i) knowingly causes the transmission of a program, information,

code, or command, and as a result of such conduct, intentionally

causes damage without authorization, to a protected computer;

(B)	 (ii) intentionally accesses a protected computer without

authorization, and as a result of such conduct, recklessly causes

damage; or

(C)	 (iii) intentionally accesses a protected computer without

authorization, and as a result of such conduct, causes damage; and

(B) 	 by conduct described in clause (i), (ii), or (iii) of subparagraph

(A), caused (or, in the case of an attempted offense, would, if

completed, have caused)—

(i) 	 loss to 1 or more persons during any 1-year period (and, for

purposes of an investigation, prosecution, or other proceeding

brought by the United States only, loss resulting from a

related course of conduct affecting 1 or more other protected

computers) aggregating at least $5,000 in value;

(ii) 	 the modification or impairment, or potential modification

or impairment, of the medical examination, diagnosis,

treatment, or care of 1 or more individuals;

(iii) 	 physical injury to any person;

(iv) 	 a threat to public health or safety; or

(v) 	 damage affecting a computer system used by or for a

government entity in furtherance of the administration of

justice, national defense, or national security;

(c) 	 The punishment for an offense under subsection (a) or (b) of this section

is—

(2)	 (A) except as provided in subparagraph (B), a fine under this title or

imprisonment for not more than one year, or both, in the case of an

offense under subsection (a)(2), (a)(3), (a)(5)(A)(iii), or (a)(6) of this

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section which does not occur after a conviction for another offense

under this section, or an attempt to commit an offense punishable

under this subparagraph;

(3)	 ...(B) a fine under this title or imprisonment for not more than

ten years, or both, in the case of an offense under subsection

(a)(4), (a)(5)(A)(iii), or (a)(7) of this section which occurs after a

conviction for another offense under this section, or an attempt to

commit an offense punishable under this subparagraph;	

(4)	 (A) except as provided in paragraph (5), a fine under this title,

imprisonment for not more than 10 years, or both, in the case of an

offense under subsection (a)(5)(A)(i), or an attempt to commit an

offense punishable under that subsection;

(B) a fine under this title, imprisonment for not more than 5 years,

or both, in the case of an offense under subsection (a)(5)(A)(ii), or

an attempt to commit an offense punishable under that subsection;

(C) except as provided in paragraph (5), a fine under this title,

imprisonment for not more than 20 years, or both, in the case of an

offense under subsection (a)(5)(A)(i) or (a)(5)(A)(ii), or an attempt

to commit an offense punishable under either subsection, that

occurs after a conviction for another offense under this section; and

(5)	 (A) if the offender knowingly or recklessly causes or attempts to

cause serious bodily injury from conduct in violation of subsection

(a)(5)(A)(i), a fine under this title or imprisonment for not more

than 20 years, or both; and

(B) if the offender knowingly or recklessly causes or attempts to

cause death from conduct in violation of subsection (a)(5)(A)(i),

a fine under this title or imprisonment for any term of years or for

life, or both.

(4) (A) a fine under this title, imprisonment for not more than 5 years, or 

both, in the case of an offense under subsection (a)(5)(B), which does 

not occur after a conviction for another offense under this section, if 

the offense caused (or, in the case of an attempted offense, would, if 

completed, have caused)—

(i) loss to 1 or more persons during any 1-year period (and, for 

purposes of an investigation, prosecution, or other proceeding 

brought by the United States only, loss resulting from a related 

course of conduct affecting 1 or more other protected computers) 

aggregating at least $5,000 in value;

(ii) the modification or impairment, or potential modification or 

impairment, of the medical examination, diagnosis, treatment, or 

care of 1 or more individuals;

(iii) physical injury to any person;

(iv) a threat to public health or safety; 
(v) damage affecting a computer used by or for a government entity in 

furtherance of the administration of justice, national defense, or 

national security; or

(vi) damage affecting ten or more protected computers during any 

1-year period;

or an attempt to commit an offense punishable under this subparagraph; 

(B) except as provided in subparagraphs (c)(4)(D) and (c)(4)(E), a 

fine under this title, imprisonment for not more than 10 years, or 

both, in the case of an offense under subsection (a)(5)(A), which does 

not occur after a conviction for another offense under this section, if 

the offense caused (or, in the case of an attempted offense, would, if 

completed, have caused) a harm provided in subparagraphs (c)(4)(A)(i) 

through (vi), or an attempt to commit an offense punishable under this 

subparagraph;

(C) a fine under this title, imprisonment for not more than 20 years, or 

both, in the case of an offense under subsection (a)(5) that occurs after 

a conviction for another offense under this section, or an attempt to 

commit an offense punishable under this subparagraph;

(D) if the offender attempts to cause or knowingly or recklessly causes 

serious bodily injury from conduct in violation of subsection (a)(5)(A), 

a fine under this title or imprisonment for not more than 20 years, or 

both;

(E) if the offender attempts to cause or knowingly or recklessly causes 

death from conduct in violation of subsection (a)(5)(A), a fine under 

this title or imprisonment for any term of years or for life, or both; or

(F) a fine under this title, imprisonment for not more than one year, 

or both, for any other offense under subsection (a)(5), or an attempt to 

commit an offense punishable under this subparagraph.

(g) 	 Any person who suffers damage or loss by reason of a violation of

this section may maintain a civil action against the violator to obtain

compensatory damages and injunctive relief or other equitable relief.

A civil action for a violation of this section may be brought only if the

conduct involves 1 of the factors set forth in clause (i), (ii), (iii), (iv),

or (v) of subsection (a)(5)(B) subparagraph (c)(4)(A). Damages for a

violation involving only conduct described in subsection (a)(5)(B)(i)

subparagraph (c)(4)(A)(i) are limited to economic damages. No action

may be brought under this subsection unless such action is begun within

2 years of the date of the act complained of or the date of the discovery

of the damage. No action may be brought under this subsection for

the negligent design or manufacture of computer hardware, computer

software, or firmware.

18 U.S.C. § 2332b(g)(5)(B)(I)

...1030(a)(5)(A)(i) resulting in damage as defined in 1030(a)(5)(B)(ii) through

(v) 1030(c)(4)(A)(ii) through (vi) (relating to protection of computers)...

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APPENDIX H

Text of Amendments to 18 U.S.C. § 1030(a)(7

The basis for this proposed amendment is set forth in Section III.D.4.c of the

strategic plan, which describes gaps in the cyber-extortion statute.

Proposed Language:

18 U.S.C. § 1030(a)(7)

(7) 	 with intent to extort from any person any money or other

thing of value, transmits in interstate or foreign commerce any

communication containing any –

(a) 	 threat to cause damage to a protected computer;

(b) threat to obtain information from a protected computer without 

authorization or in excess of authorization or to impair the 

confidentiality of information obtained from a protected computer 

without authorization or by exceeding authorized access; or

(c) demand or request for money or other thing of value in relation to 

damage to a protected computer, where such damage was caused to 

facilitate the extortion;
APPENDIX I

Text of Amendment to United States Sentencing Guideline § 2B1.

The basis for this proposed amendment is set forth in Section III.D.4.d of the

strategic plan, which describes the Sentencing Guidelines provision governing

identity theft.

Proposed language for United States Sentencing Guidelines § 2B1.1,

comment.(n.1): 

“Victim” means (A) any person who sustained any harm, whether monetary

or non-monetary, as a result of the offense. Harm is intended to be 

inclusive term, and includes bodily injury, non-monetary loss such as the

theft of a means of identification, invasion of privacy, reputational damage,

and inconvenience. “Person” includes individuals, corporations, companie

associations, firms, partnerships, societies, and joint stock companies.

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COMBATING IDENTITY THEFT A Strategic Plan

APPENDIX J

Description of Proposed Surveys

In order to expand law enforcement knowledge of the identity theft response

and prevention activities of state and local police, the Bureau of Justice

Statistics (BJS) should undertake new data collections in three areas: (1)

a survey of law enforcement agencies focused on the response to identity

theft; (2) enhancements to the existing Law Enforcement Management and

Administrative Statistics (LEMAS) survey platform; and (3) enhancements

to the existing training academy survey platform. Specifically, BJS shou

undertake to do the following:

•	 New survey of state and local law enforcement agencies. A n

study focused on state and local law enforcement responses to identity

theft should seek to document agency personnel, operations, workload,

and policies and programs related to the handling of this crime. Deta

on the organizational structure, if any, associated with identity theft

response should be included (for example, the use of special units

devoted to identity theft). The study should inquire about participati

in regional identity theft task forces, community outreach and education

efforts, as well as identity theft prevention programs. Informati

collected should also include several summary measures of identity

theft in the agencies’ jurisdictions (offenses known, arrests, referrals,

outcomes), with the goal of producing some standardized metrics with

which to compare jurisdictions.

•	 Enhancement to existing LEMAS survey. BJS should develop a special

battery of questions for the existing LEMAS survey platform. T

LEMAS survey, conducted roughly every three years since 1987, collects

detailed administrative information from a nationally representative

sample of about 3,000 agencies. The sample includes all agencies wi

100 or more officers, and a stratified random sample of smaller agencies

as well as campus law enforcement agencies. Information collect

should include whether agencies presently enforce identity theft laws,

utilize special units, have designated personnel, participate in regional

identity theft task forces, and have policies and procedures in place

related to the processing of identity theft incidents. The survey shou

also inquire whether agencies collect summary measures of identity

theft in their jurisdictions, including offenses known, arrests, referrals,

and any outcome measures. Finally, this study should also colle

information on whether agencies are engaged in community outreach,

education, and prevention activities related to identity theft.

•	 Enhancement to existing law enforcement training academy survey. 

BJS should develop a special battery of questions for the existing law

enforcement training academy survey platform. A section of the da

collection instrument should be devoted to the types of training, if any,
10

being provided by basic academies across the country in the area of

identity theft. BJS should subsequently provide statistics on the numb

of recruits who receive training on identity theft, as well as the nature

and content of the training. In-service training provided to active-du

officers should also be covered.

•	 The Bureau of Justice Statistics should revise both the State Court 

Processing Statistics (SCPS) and National Judicial Reporting 

Program (NJRP) programs so that they are capable of distinguishing 

identity theft from other felony offenses. In addition, the scope of

these surveys should be expanded to include misdemeanor identity

theft offenders. If SCPS and NJRP were able to follow identity theft

offenders, then a variety of different types of court-specific information

could be collected. These include how many offenders are charged

with identity theft in the Nation’s courts, what percentage of these

offenders are released at pretrial, and how are the courts adjudicating

(e.g., convicting or dismissing) identity theft offenders. Among tho

convicted identity theft offenders, data should be collected on how many

are being sentenced to prison, jail, or probation. These projects should

also illuminate the prior criminal histories or rap sheets of identity

theft offenders. Both projects should also allow for the post convicti

tracking of identity theft offenders for the purposes of examining their

overall recidivism rates.

•	 BJS should ensure that other state court studies that it funds are

reconfigured to analyze the problem of identity theft. For example, State

Court Organization (SCO) currently surveys the organizational structure

of the Nation’s state courts. This survey could be supplemented with

additional questionnaires that measure whether special courts similar to

gun, drug, or domestic violence courts are being created for identity theft

offenders. Also, SCO should examine whether courts are training or

funding staff equipped to handle identity theft offenders.

•	 BJS should ensure that the Civil Justice Survey of State Courts, which

examines civil trial litigation in a sample of the Nation’s state courts, is

broadened to identify and track various civil enforcement procedures

and their utilization against identity thieves.

APPENDICES
1

COMBATING IDENTITY THEFT A Strategic Plan

ENDNOTES

1.	 Public Law 105-318, 112 Stat. 3007 (Oct. 30, 1998). The Identity The

Assumption and Deterrence Act provides an expansive definition of identity

theft. It includes the misuse of any identifying information, which cou

include name, SSN, account number, password, or other information linked to

an individual, to commit a violation of federal or state law. The definition th

covers misuse of existing accounts as well as creation of new accounts.

2.	 The federal financial regulatory agencies include the banking and securities

regulators, namely, the Federal Deposit Insurance Corporation, the Federal

Reserve Board, the National Credit Union Administration, the Office of the

Comptroller of the Currency, the Office of Thrift Supervision, the Commodity

Futures Trading Commission, and the Securities and Exchange Commission.

3.	 The public comments are available at www.idtheft.gov.

4.	 Testimony of John M. Harrison, June 19, 2003, Senate Banking Committee,

“The Growing Problem of Identity Theft and its Relationship to the Fair Credit

Reporting Act.”

5. See U.S. Attorney’s Office, Western District of Michigan, Press Release (July 5,

2006), available at http://www.usdoj.gov/usao/miw/press/JMiller_

Others10172006.html.

6.	 Javelin Strategy and Research, 2007 Identity Fraud Survey Report: Identity Fraud is 

Dropping, Continued Vigilance Necessary (Feb 2007), summary available at http://

www.javelinstrategy.com; Bureau of Justice Statistics (DOJ) (2004), available at

http://www.ojp.usdoj.gov/bjs/pub/pdf/it04.pdf; Gartner, Inc. (2003), available

at http://www.gartner.com/5_about/press_releases/pr21july2003a.jsp; FTC 2003

Survey Report (2003), available at http://www.consumer.gov/idtheft/pdf/

synovate_report.pdf.

7.	 See Business Software Alliance, Consumer Confidence in Online Shopping Buoyed by 

Security Software Protection, BSA Survey Suggests (Jan. 12, 2006), available at http://

www.bsacybersafety.com/news/2005-Online-Shopping-Confidence.cfm.

8.	 See Cyber Security Industry Alliance, Internet Security Voter Survey (June 2005) at

9, available at https://www.csialliance.org/publications/surveys_and_polls/CSIA_

Internet_Security_Survey_June_2005.pdf.

9. See U.S. Attorney’s Office, Southern District of Florida, Press Release (July 19,

2006), available at http://www.usdoj.gov/usao/fls/PressReleases/060719-01.html.

10. See, e.g., John Leland, Meth Users, Attuned to Detail, Add Another Habit: ID 

Theft, New York Times, July 11, 2006, available at http://www.nytimes.

com/2006/07/11/us/11meth.html?ex=1153540800&en=7b6c7773afa880be&ei=50

70; Byron Acohido and Jon Swartz, Meth addicts’ other habit: Online Theft, USA

Today, December 14, 2005, available at http://www.usatoday.com/tech/news/

internetprivacy/2005-12-14-meth-online-theft_x.htm.
1

11.	Bob Mims, Id Theft Is the No. 1 Runaway U.S. Crime, The Salt Lake Tribune, May

3, 2006, available at 2006 WLNR 7592526.

12. 	Dennis Tomboy, Meth Addicts Stealing Mail, Deseret Morning News, April 28,

2005, http://deseretnews.com/dn/view/0,1249,600129714,00.html.

13. 	Stephen Mihm, Dumpster-Diving for Your Identity, New York Times Magazine,

December 21, 2003, available at http://www.nytimes.com/2003/12/21/magazine/

21IDENTITY.html?ex=1387342800&en=b693eef01223bc3b&ei=5007&partner=US

ERLAND.

14.	Pub. L. No. 108-159, 117 Stat. 1952.

15.	The FACT Act required merchants to comply with this truncation provision

within three years of the Act’s passage with respect to any cash register or device

that was in use before January 1, 2005, and within one year of the Act’s passage

with respect to any cash register or device that was first put into use on or after

January 1, 2005. 15 U.S.C. § 1681c(g)(3

16.	Overview of Attack Trends, CERT Coordination Center 2002, available at http://

www.cert.org/archive/pdf/attack_trends.pdf.

17.	Lanowitz, T., Gartner Research ID Number G00127407: December 1, 2005.

18.	“Vishing” Is Latest Twist In Identity Theft Scam, Consumer Affairs, July 24, 2006,

available at http://www.consumeraffairs.com/news04/2006/07/scam_vishing.html.

19.	Fraudsters have recently used pretexting techniques to obtain phone records,

see, e.g., Jonathan Krim, Online Data Gets Personal: Cell Phone Records For Sale,

Washington Post, July 13, 2005, available at 2005 WLNR 10979279, and the

FTC is pursuing enforcement actions against them. See http://www.ftc.go

opa/2006/05/phonerecords.htm.

20.	The FTC brought three cases after sting operations against financial pretexters.

Information on the settlement of those cases is available at http://www.ftc.gov/

opa/2002/03/pretextingsettlements.htm.

21.	See, e.g., Computers Stolen with Data on 72,000 Medicaid Recipients, Cincinnati

Enquirer, June 3, 2006.

22.	15 U.S.C. § 1681e; 15 U.S.C. § 6802(a).

23.	Although the FACT Act amendments to the Fair Credit Reporting Act require

merchants to truncate credit account numbers, allowing only the final five digits

to appear on an electronically generated receipt, 15 U.S.C. § 1618c(g), manually

created receipts might still contain the full account number.

24.	See http://www.bizjournals.com/philadelphia/stories/2006/07/24/daily30.html.

See also Identity Theft Resource Center, Fact Sheet 126: Checking Account Takeover 

and Check Fraud, http://www.idtheftcenter.org/vg126.shtml.

ENDNOTES
1

COMBATING IDENTITY THEFT A Strategic Plan

25. For example, the Securities and Exchange Commission instituted proceedin

against a 19-year-old internet hacker after the hacker illicitly accessed an

investor’s online brokerage account. His bogus transactions saved the hack

approximately $37,000 in trading losses. The SEC also obtained an emergen

asset freeze to halt an Estonia-based “account intrusion” scheme that targeted

online brokerage accounts in the U.S. to manipulate the markets. See Litigati

Release No. 19949 (Dec. 19, 2006), available at http://www.sec.gov/litigation/

litreleases/2006/lr19949.htm.

26. For unauthorized credit card charges, the Fair Credit Billing Act limits consumer

liability to a maximum of $50 per account. 15 U.S.C. § 1643. For bank acc

fraud, different laws determine consumers’ legal remedies based on the type

of fraud that occurred. For example, applicable state laws protect consume

against fraud committed by a thief using paper documents, like stolen or

counterfeit checks. If, however, the thief used an electronic fund transfer, feder

law applies. The Electronic Fund Transfer Act limits consumer liability f

unauthorized transactions involving an ATM or debit card, depending on how

quickly the consumer reports the loss or theft of his card: (1) if reported within

two business days of discovery, the consumer’s losses are limited to a maximum

of $50; (2) if reported more than two business days after discovery, but within 60

days of the transmittal date of the account statement containing unauthorized

transactions, he could lose up to $500; and (3) if reported more than 60 days

after the transmittal date of the account statement containing unauthorized

transactions, he could face unlimited liability. 15 U.S.C. § 1693g. As a ma

of policy, some credit and debit card companies waive liability under some

circumstances, freeing the consumer from fraudulent use of his credit or debit

card.

27.	See John Leland, Some ID Theft Is Not For Profit, But to Get a Job, N.Y. Times,

Sept. 4, 2006.

28. See World Privacy Forum, Medical Identity Theft: The Information Crime That 

Can Kill You (May 3, 2006), available at worldprivacyforum.org/pdf/wpf_

medicalidtheft2006.pdf.

29. See http://www.idanalytics.com/news_and_events/20051208.htm. Some o

organizations have begun conducting statistical analyses to determine the link

between data breaches and identity theft. These efforts are still in their ear

stages, however.

30.	Government Accounting Office, Social Security Numbers: Government Could Do 

More to Reduce Display in Public Records and On Identity Cards (November 2004), at

2, available at http://www.gao.gov/new.items/d0559.pdf.

31.	15 U.S.C. §§ 6801 et seq.; 42 U.S.C. §§ 1320d et seq.; 18 U.S.C. §§ 2721 et seq.

32.	5 U.S.C. § 552a.

33. See, e.g., Ariz. Rev. Stat. § 44-1373.

34. Social Security Numbers: Federal and State Laws Restrict Use o  SSNs, Yet Gap

Remain, GAO - 05-1016T, September 15, 2005.
1

35.	See, e.g., www.wpsic.com/edi/comm_sub_p.shtml?mm=3, Non-SSN Member Numbers 

to Be Assigned for Privacy Protection.

36. Except where expressly noted, all references to years in this strategic plan a

intended to refer to calendar years, rather than fiscal years.

37.	The federal government’s overall information privacy program derives primarily

from five statutes that assign OMB policy and oversight responsibilities, and

agencies responsibility for implementation. The Privacy Act of 1974 (5 U.S.

§ 552a) sets collection, maintenance, and disclosure conditions; access and

amendment rights and notice and record-keeping requirements with respect

to personally identifiable information retrieved by name or personal identifier.

The Computer Matching and Privacy Protection Act of 1988 (5 U.S.C. § 552a

note) amended the Privacy Act to provide a framework for the electronic

comparison of personnel and benefits-related information systems. T

Paperwork Reduction Act of 1995 (44 U.S.C. § 3501 et seq.) and the Information

Technology Management Reform Act of 1996 (also known as Clinger-Cohen

Act; 41 U.S.C. § 251 note) linked agency privacy activities to information

technology and information resources management, and assigned to agency

Chief Information Officers (CIO) the responsibility to ensure implementation

of privacy programs within their respective agencies. Finally, Section 208 

the E-Government Act of 2002 (44 U.S.C. § 3501 note) included provisions

requiring agencies to conduct privacy impact assessments on new or substantially

altered information technology systems and electronic information collections,

and post web privacy policies at major entry points to their Internet sites. The

provisions are discussed in OMB memorandum 03-22, “OMB Guidance for

Implementing the Privacy Provisions of the E-Government Act of 2002.”

38.	See Protection of Sensitive Agency Information, Memorandum from Clay Johnson

III, Deputy Director for Management, OMB, to Heads of Departments and

Agencies, M-06-16 (June 23, 2006).

39.	The United States Computer Emergency Readiness Team (US-CERT) has played

an important role in public sector data security. US-CERT is a partnersh

between DHS and the public and private sectors. Established in 2003 to prote

the nation’s Internet infrastructure, US-CERT coordinates defense against and

responses to cyber attacks across the nation. The organization interacts wi

federal agencies, state and local governments, industry professionals, and others

to improve information sharing and incident response coordination and to reduce

cyber threats and vulnerabilities. US-CERT provides the following support: 

cyber security event monitoring; (2) advanced warning on emerging threats; (3)

incident response capabilities for federal and state agencies; (4) malware analysis

and recovery support; (5) trends and analysis reporting tools; and (6) other

support services in the area of cyber security. US-CERT also provides consu

and business education on Internet and information security.

40.	See http://www.whitehouse.gov/results/agenda/scorecard.html.

ENDNOTES
1

COMBATING IDENTITY THEFT A Strategic Plan

41.	The proposed routine use language set forth in Appendix B differs slightly from

that included in the Task Force’s interim recommendations in that it further

clarifies, among other things, the categories of users and the circumstances

under which disclosure would be “necessary and proper” in accordance with the

OMB’s guidance on this issue.

42.	15 U.S.C. §§ 6801-09; 16 C.F.R. Part 313 (FTC); 12 C.F.R. Part 30, App. B (OCC,

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

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

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

12 C.F.R. Part 748, App. A (NCUA, credit unions); 16 C.F.R. Part 314 (FTC,

financial institutions that are not regulated by the FRB, FDIC, OCC, OTS,

NCUA, CFTC, or SEC); 17 C.F.R. Part 248.30 (SEC); 17 C.F.R. Part 160.30

(CFTC).

43.	15 U.S.C. § 45(a). Further, the federal bank regulatory agencies have authori

to enforce Section 5 of the FTC Act against entities over which they have

jurisdiction. See 15 U.S.C. §§ 6801-0

44.	15 U.S.C. §§ 1681-1681x, as amended.

45.	Pub. L. No. 108-159, 117 Stat. 1952.

46.	42 U.S.C. §§ 1320d et seq.

47.	31 U.S.C. § 5318(l).

48.	18 U.S.C. §§ 2721 et seq.

49.	http://www.ncsl.org/programs/lis/cip/priv/breachlaws.htm.

50.	http://www.bbb.org/securityandprivacy/SecurityPrivacyMadeSimpler.pdf;www.

staysafeonline.org/basics/company/basic_tips.html;The Financial Services 

Roundtable, Voluntary Guidelines for Consumer Confidence in Online Financial Services,

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

www.realtor.org/realtororg.nsf/files/NARInternetSecurityGuide.pdf/$FILE/

NARInternetSecurityGuide.pdf; www.antiphishing.org/reports/bestpracticesforisps.

pdf; www.uschamber.com/sb/security/default.htm; www.truste.org/pdf/

SecurityGuidelines.pdf; www.the-dma.org/privacy/informationsecurity.shtml;

http://www.staysafeonline.org/basics/company/basic_tips.html.

51.	These changes may be attributable to requirements contained in the regulations

implementing Title V of the GLB Act. See 12 C.F.R. Part 30, App. B (nation

banks); 12 C.F.R. Part 208, App. D-2 and Part 225, App. 5 (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

and B, and 12 C.F.R. Part 717 (credit unions); 16 C.F.R. Part 314 (financial

institutions that are not regulated by the FDIC, FRB, NCUA, OCC, or OTS).

52.	See, e.g., http://www.truste.org/pdf/SecurityGuidelines.pdf; http://www.the-dma.

org/privacy/informationsecurity.shtml.
1

53.	Deloitte Financial Services, 2006 Global Security Survey, available at http://singe.

rucus.net/blog/archives/756-Deloitte-Security-Surveys.html.

54.	Datalink, Data Storage Security Study, March 2006, available at www.datalink.com/

security/.

55.	Id.

56.	See Small Business Technology Institute, Small Business Information Security 

Readiness (July 2005).

57.	See, e.g., California (Cal. Civ. Code § 1798.82 (2006)); Illinois (815 Ill. Comp.

Stat 530/5 (2005)); Louisiana (La. Rev. Stat. 51:3074 (2006)); Rhode Island (R.I.

Gen. Laws § 11-49.2.3 (2006)).

58.	See, e.g., Colorado (Colo. Rev. Stat. § 6-1-716 (2006)); Florida (Fla. Stat. §

817.5681 (2005)); New York (NY CLS Gen. Bus. § 889-aa (2006)); Ohio (Ohio

Rev. Code Ann. § 1349.19 (2006)).

59.	Ponemon Institute LLC, Benchmark Study of European and U.S. Corporate Privacy 

Practices, p. 16 (Apr. 26, 2006).

60. Id. 

61.	Ponemon Institute, LLC, 2005 Benchmark Study of Corporate Privacy Practices

(July 11, 2005).

62.	MultiChannel Merchant, Retailers Need to Provide Greater Data Security, Survey Says

(Dec. 1, 2005), available at http://multichannelmerchant.com/opsandfulfillment/

advisor/retailers_data_security_1201/index.html.

63.	See Information Technology Examination Handbook’s Information Security

Booklet, available at http://www.ffiec.gov/guides.htm.

64.	See, e.g., http://www.pvkansas.com/police/crime/iden_theft.shtml (Prairie Village,

Kansas), http://phoenix.gov//POLICE/dcd1.html (Phoenix, Arizona);

www.co.arapahoe.co.us/departments/SH/index.asp (Arapahoe County, Colorado).

65.	Colleges Are Textbook Cases of Cybersecurity Breaches, USA TODAY, August 1, 2006.

66. 	Examples of this outreach include a wide-scale effort at the University of

Michigan which launched Identity Web, a comprehensive site based on the

recommendations of a graduate class in fall of 2003. The State University 

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 orientati

sessions at Drexel University in Philadelphia warns students of the dangers of

identity theft on social networking sites. Bowling Green State University 

Kentucky emails campus-wide “fraud alerts” when it suspects that a scam is

being targeted to its students. In recent years, more colleges and universiti

have hired chief privacy officers, focusing greater attention on the harms that can

result from the misuse of students’ information.

ENDNOTES
1

COMBATING IDENTITY THEFT A Strategic Plan

67.	See 31 C.F.R. § 103.121 (banks, savings associations, credit unions, and certain

non-federally regulated banks); 31 C.F.R. § 103.122 (broker-dealers); 17 C.F.R. §

270.0-11, 31 C.F.R. § 103.131 (mutual funds); and 31 C.F.R. § 103.123 (futures

commission merchants and introducing brokers).

68.	See http://www.dhs.gov/xprevprot/laws/gc_1172765386179.shtm.

69.	A primary reason criminals use other people’s identities to commit identity theft

is to enable them to operate with anonymity. However, in committing identi

theft, the suspects often leave telltale signs that should trigger concern for alert

businesses. Section 114 of the FACT Act seeks to take advantage of businesse

awareness of these patterns, and requires the federal bank regulatory agencies

and the FTC to develop regulations and guidelines for financial institutions and

creditors addressing identity theft. In developing the guidelines, the agenci

must identify patterns, practices, and specific forms of activity that indicate the

possible existence of identity theft. 15 U.S.C. § 1681

	 Those agencies have issued a set of proposed regulations that would require

each financial institution and creditor to develop and implement an 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 proposed regulations include guidelines listi

patterns, practices, and specific forms of activity that should raise a “red flag”

signaling a possible risk of identity theft. Recognizing these “red flags” c

enable businesses to detect identity theft at its early stages before too much harm

is done. See 71 Fed. Reg. 40786 (July 18, 2006) to be codified at 12 C.F.R. Par

41 (OCC), 222 (FRB), 334 and 364 (FDIC), 571 (OTS), 717 (NCUA), and 16

C.F.R. Part 681 (FTC), available at http://www.occ.gov/fr/fedregister/71fr40786.

pdf.

70.	USB token devices are typically small vehicles for storing data. They are difficu

to duplicate and are tamper-resistant. The USB token is plugged directly in

the USB port of a computer, avoiding the need for any special hardware on

the user’s computer. However, a login and password are still required to acce

the information contained on the device. Smart cards resemble a credit ca

and contain a microprocessor that allows them to store and retain information.

Smart cards are inserted into a compatible reader and, if recognized, may

require a password to perform a transaction. Finally, the common tok

system involves a device that generates a one-time password at predetermined

intervals. Typically, this password would be used in conjunction with other log

information such as a PIN to allow access to a computer network. This system 

frequently used to allow for remote access to a work station for a telecommuter.

71.	Biometrics are automated methods of recognizing an individual based

on measurable biological (anatomical and physiological) and behavioral

characteristics. Biometrics commonly implemented or studied includ

fingerprint, face, iris, voice, signature, and hand geometry. Many oth

modalities are in various stages of development and assessment. Addition

information on biometric technologies, federal biometric programs, and

associated privacy considerations can be found at www.biometrics.gov.
1

72.	See Authentication in an Internet Banking Environment (October 12, 2005), available

at http://www.ffiec.gov/pdf/authentication_guidance.pdf.

73.	See FFIEC Frequently Asked Questions on FFIEC Guidance on Authentication in 

an Internet Banking Environment (August 15, 2006), available at http://www.ffiec.

gov/pdf/authentication_faq.pdf.

74.	See Kristin Davis and Jessica Anderson, But Officer, That Isn’t Me, Kiplinger’s

Personal Finance (October 2005); Bob Sullivan, The Darkest Side of ID Theft,

MSNBC.com (Dec. 1, 2003); David Brietkopf, State of Va. Creates Special Cards for 

Crime Victims, The American Banker (Nov. 18, 2003).

75.	18 U.S.C. § 1028A.

76. 	18 U.S.C. § 1028(d)(7).

77. See 18 U.S.C. § 1030(e)(8).

78. 	18 U.S.C. § 1030(a)(7).

79.	S. Rep. No. 105-274, at 9 (1998).

80.	As this Task Force has been charged with considering the federal response to

identity theft, this routine use notice does not include all possible triggers, such

as embarrassment or harm to reputation. However, after consideration of t

Strategic Plan and the work of other groups charged with assessing Privacy Act

considerations, OMB may determine that a routine use that takes into account

other possible triggers may be preferable.

ENDNOTES