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What is the Identity Theft Act?

By Jason C. Chavis
Updated May 17, 2024
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The Identity Theft Act is a legislative mandate passed in the United States designed to offer identity theft protection for individuals and businesses. Fully entitled the Identity Theft and Assumption Deterrence Act, it was passed by the US Congress and signed into law by President Bill Clinton in 1998. An amendment to the law was enacted in 2003.

Following testimony by the Federal Trade Commission in front of the US Senate, federal officials deemed it necessary to address growing concerns over identity theft scams. Consumers were being exploited at a growing rate during the late 1990s and early 2000s, mostly because of increased access to computers which now housed detailed information about individuals and their financial records. Among some of the most common practices of abuse with a stolen identity are different forms of fraud.

According to the legislation in the Identity Theft Act, crimes involving loans, mortgages, credit cards and lines-of-credit were to be prosecuted to the full extent of the law. While these activities were already illegal, the Identity Theft Act added additional crimes with which people could be prosecuted should they be caught. US Code Title 18 was amended to include any fraud committed using identification documents or personal information. It also made it illegal to knowingly transfer this information to other people without authorization, regardless of intent.

Federal law as determined by the statutes of the Identity Theft Act is limited to specific parameters. Notably, the identification stolen must be issued by a business or government agency in the US. The criminal also needs to have the intention of defrauding a person, business or government agency within the country. Criminals can be charged if they commit identity theft either through the mail, across state lines or internationally.

The Identity Theft Act allows for punishments of five, 15, 20 or 30 years depending on the crime. It also calls for fines determined by certain factors such as the extent of financial disparity caused. In extreme cases, there is also a statute that defines certain incidents as “Aggravated Identity Theft” which allows for consecutive sentences to be enforced upon criminals.

Many countries outside of the US have also enacted laws and provisions regarding identity theft fraud. Australia enacted the Criminal Code Amendment Act in 2000, Canada passed the Personal Information Protection and Electronic Documents Act the same year, India passed the Information Technology Act of 2000 and the United Kingdom legislated the Data Protection Act in 1998. Most of these countries work together in the event of international identity theft crimes to ensure enforcement across borders.

America Explained is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By NathanG — On Jan 19, 2012

@hamje32 - I believe that you can thank the Identity Theft Protection Act for the substantial lengths employers and doctors go through to safeguard your personal information.

They make you sign all sorts of release forms and stuff where you indicate how and to what extent your personal information may be used, if at all. I hope in fact that they honor these commitments.

There have been some cases where states have suffered from massive hacking and breaches into employee data, releasing valuable information like social security numbers. This kind of thing is embarrassing. I only hope that technology can keep pace with this legislation so that we stay one step ahead of the criminals.

By hamje32 — On Jan 18, 2012

@everetra - Credit card theft is bad, but it’s not the worst thing in the world, believe me. If you’re card is compromised, the company will give you another one.

What’s worse is if your social security number is stolen. How easily can you get a new social security number? This kind of theft is an absolute nightmare from what I understand.

But let me give you this piece of advice for protection from identity theft. Not all ID theft happens over the Internet. I got a voice mail from a so called lawyer, telling me that I was under investigation, and that I needed to call him back.

I did an Internet search on the callback number and found out it was a scam. Had I called back, he would have asked for my social security number so that he could “investigate” and put to rest the alleged lawsuit against me!

By everetra — On Jan 17, 2012

I’m glad that the law was passed, but ID theft is still rampant, especially with credit cards. I’ve read that on the Internet there is a black market for credit card numbers.

Supposedly there are forums you can frequent where you can buy these credit card numbers. That’s tragic!

Credit card theft protection should be aggressively pursued in my opinion, because just about everyone has a credit card number or two.

It’s good to know that in most cases credit card companies won’t honor credit card transactions that are deemed fraudulent. But still, it’s a major inconvenience and I am sure that we all have a story to tell.

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