Identity Theft and Identity Crimes

Identity Theft Defined

Personal Identity Theft. Identity theft is the crime of the 21st century, undermining the economy of U.S. businesses and the entire United States. Identity theft is categorized as either “personal” or “business.” Personal identity theft is the unauthorized use of another person's personal identifying information to obtain credit, goods, services, money, or property, or to commit a felony or misdemeanor. “Personal identifying information” means a person's name, address, telephone number, driver's license number, social security number, place of employment, employee identification number, demand deposit account number, savings or checking account number, credit card number, or mother's maiden name.

A mother's maiden name is not required to conduct financial or health care transactions, but it is often requested by companies for use as a password. However, a mother's maiden name is also the final piece of information required by perpetrators to obtain one's original birth certificate, which can then be used for a complete “identity takeover.” With an original birth certificate, a criminal can easily obtain passports and visas; legal documents; social security; and selective service, armed services, and other government records and documents. A criminal can also gain access to financial holdings.

Business Identity Theft. Identity theft has recently taken a new twist and, with it, another definition: business identity theft. Business identity theft is the unauthorized use of a business's identifying information to obtain credit, goods, services, money, or property, or to commit a felony or misdemeanor. “Business identifying information” means a busi-ness's name, address, telephone number, corporate credit card numbers, bank account numbers, federal employer identification number (FEIN), Michigan Treasury Number, electronic filing identification number, electronic transmitter identification number (ETIN), e-business Web sites, URL addresses, and e-mail addresses.

Recent increases in corporate credit card frauds suggest that some perpetrators now find business credit card numbers more lucrative than personal credit card numbers. For business credit cards, the monetary limits are often higher than for personal accounts. Also, many business credit accounts are used by more than one employee and therefore contain a relatively large number of monthly transactions in which fraudulent charges are more easily hidden. In addition, the reconciliation of lengthy business credit card statements can take longer, and [Page 228]may be conducted less frequently, compared to personal credit card statements.

In one recent case, a stolen business credit card number was used to purchase and send merchandise to Romania. In another, unrelated case, a business credit card number was used for purchases that were sent via Federal Express to Indonesia. In yet another example, a business's FEIN and ETIN numbers were used to obtain a loan from the Small Business Administration (SBA) in the amount of $480,000. The perpetrator used the business identities to register a subsidiary of the victim's business; the victim discovered the fraud with the receipt of a letter by the SBA informing him that the loan payment was delinquent. A more common example of business identity theft is “Web site cloning,” a practice in which criminals create mirror Web sites of legal businesses to obtain names and credit card and social security numbers of unsuspecting customers. In recent months, Web site cloning has been reported frequently in the news media.

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