Identity Theft on the Rise

A person’s identity is more valuable to him or her than any single tangible possession. To quote William Shakespeare, “Good name, in man and woman, dear my lord / Is the immediate jewel of their souls: / Who steals my purse, steals trash; ’tis something, nothing; / ’Twas mine, ’tis his, and has been slave to thousands: / But he that filches from me my good name / Robs me of that which not enriches him / And makes me poor indeed.” (Shakespeare, Othello, Act III, Scene III)

The History of Identity Theft

Identity theft is a crime that 20 years ago was hardly a concern for businesses or individuals; however, today it is one of the most recognized crimes in the US. This does not imply that identity theft did not occur 20 years ago, but that the effects on the victims were less noticeable. People in the 18th century coming to America from Europe could use the identity of a person still in Europe with little or no effect on that person. Even during the 19th century, it was  common for someone in the US to move west and assume a new identity to escape criminal charges or creditors. Indeed, until the passage of the Social Security Act in 1935 and the issuing of Social Security numbers, a person’s identifying information consisted mostly of his or her name and face. Even as late as the 1960s and 1970s, if you wanted to check a person’s credit, you had to call all of his or her creditors individually, and you had to trust that person had provided you with a complete list.

Over the years, identity theft has become a more profitable crime. This is because in the modern economy, businesses offer goods and services on credit to strangers based on the data in the buyer’s credit history. With telecommunications and internet technology, buyers and sellers do not need to meet in person to consummate their transaction. The internet has made access to information almost instantaneous. Increased access to data on the internet has provided identity thieves easier access to an individual’s personal information from both inside and outside the US. Identity thieves can use the internet as a means to gather an individual’s identification without ever coming into personal contact with the individual, indeed in many cases the victim’s information was stolen in a data breach.

The Federal Trade Commission’s Consumer Sentinel Network ranked Arizona in 10th place for the number of cases of identity theft per capita in 2015. In Arizona, the Phoenix metropolitan area ranked 36th in the nation, and the Tucson metropolitan area ranked 50th in the nation, for cases of identity theft[1]. Being at risk for identity theft can include factors that are beyond your control, specifically to whom did you entrust your personal information. The Identity Theft Resource Center reported a 35% increase in data breaches in 2016[2].

Identity Theft Defined

Identity theft is broadly defined as the use of one person’s identity or personally identifying information by another person without his or her permission. Identity theft is a type of fraud and can be committed against an individual or an organization. Fraud is defined as making a false statement, omission or action that someone else relies upon and based on that reliance gives up something of value. By using false information to obtain items of value, identity thieves are committing fraud.

The Impact of Identity Theft

Identity theft not only harms individuals—it harms the public. The Internal Revenue Service reported receiving as many as 5 million tax returns resulting from identity theft of individuals in 2013. The report further indicated claims for over $30 billion in 2013 for these fraudulent tax refunds[3]. The U.S. Department of Justice indicated that in 2014 around 17.6 million U.S. residents, 7% of the total population, were victims of identity theft[4]. Many identity theft victims spend hundreds or even thousands of hours repairing their credit and reputation after being victimized by identity thieves.

[1] https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-january-december-2016/csn_cy-2016_data_book.pdf

[2] http://www.idtheftcenter.org/

[3] https://www.justice.gov/tax/stolen-identity-refund-fraud

[4] https://www.bjs.gov/content/pub/pdf/vit14.pdf

About Dr.Bob

Dr. Minniti is the President and Owner of Minniti CPA, LLC. Dr. Minniti is a Certified Public Accountant, Certified Forensic Accountant, Certified Fraud Examiner, Certified Valuation Analyst, Certified in Financial Forensics, Master Analyst in Financial Forensics, Chartered Global Management Accountant, and is a licensed private investigator in the state of Arizona. Dr. Minniti received his doctoral degree in business administration from Walden University, received his MBA degree and Graduate Certificate in Accounting from DeVry University’s Keller Graduate School of Management, and received his Bachelor of Science in Business Administration degree from the University of Phoenix. Dr. Minniti teaches graduate and undergraduate courses in accounting, fraud examination, fraud criminology, ethics, forensic accounting, external audit, and internal audit, at DeVry University, Grand Canyon University, Northwestern University, and the University of Phoenix. He designed graduate and undergraduate courses for Grand Canyon University, Northwestern University, and Anthem College. He is a writer and public speaker. He has experience in forensic accounting, fraud examinations, financial audits, internal audits, compliance audits, real estate valuations, business valuations, internal control development, business continuation planning, risk management, financial forecasting, and Sarbanes-Oxley compliance work. Dr. Minniti is an instructor teaching continuing professional education classes for the American Institute of Certified Public Accountants, Compliance Online, CPE Link. AccountingEd, Global Compliance Panel, Clear Law Institute and various state CPA Societies.

Leave a Reply

Your email address will not be published. Required fields are marked *