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Grady, Maniam and Leavell
my brother, an 18 y ear-old male, could easily pose as a 26 y ear-old female with a lower risk of
detection, due to the anonymous nature of the Internet. However, if he were to attempt to use that
identification in an actual face-to-face transaction, there is a great er possibility that he will get
caught.
Criminals have become more creative with methods used to commit identity theft. Web spoofing
and phishing are two results of these criminal’s creative thinking. Web spoofing occurs when the
criminal creates a bogus Web site that is sim ilar to a legitim ate site , to retrieve personal
information from individuals who do n ot realize th e site is a sham . The FBI named spoofing to
be the bigge st cause of t he rise in identit y th eft a nd ot her frauds committed on t he Int ernet
(Dinev, 2006).
Responses to phishing attacks account for 20 percent of online methods of identity theft (Mercuri,
2006). Phishing occurs when em ail messages that appear to be legitimate are sent, in bulk, t o
Internet users. These e mails usually contain info rmation that appears to be i mportant regarding
their user accounts, such as “there are problema tic activities,” in an attempt to scare the user
enough to respond t o the message (Dinev, 2 006, p. 81). The re cipient becomes distressed and
visits the site, revealing identit y inf ormation, and does not tho roughly inve stigate the site to
ensure its authenticity.
FINANCIAL IMPACT OF IDENTITY THEFT
Consumers, businesses, and governments are all victims of identity theft. Consumers suffer from
the im pact of identit y thef t, both em otionally and fi nancially, as their reputation and finan cial
standing are injured. Businesses and governm ents suffer greater financial loss than consumers
due to the costs incurred t o restore the damage from identity theft and costs for taking measures
to prevent i dentity theft. A survey conducte d by t he FTC in 2003 claim s t hat businesses and
financial institutions have lost at least $47 b illion, while the tot al am ount spent by indi vidual
victims is about $5 billion yearly in identity theft related costs (Newman, 2004).
Consumers are the ultimate victims of identity theft due to the severity of the damage caused by
the crime. T hese identity theft victi ms suffer little financial loss compared to t heir business and
government counterparts, but they do suffer from a disruption of t heir lives and the hindrance in
the ability to obtain further credit. Victims have experienced pain and suffering from banks, debt
collectors, and even law enforcement due to identity theft (Newman, 2004).
There are tw o measures of identity theft for cons umers: time and dollars spent resear ching and
defending their cases. It i s estimated that identity theft has cost Americans at least five bil lion
dollars. Also, victims have claimed to have spent, on average, 600 hours and $1400 in an attempt
to correct their credit (White, 2005). These are just the averages; there is evidence that there are
some individuals who have spent in excess of 10,000 hours and $30,000 to clear the damage from
identity theft.
The burden of proof is the responsibility of the vi ctim, meaning that all the costs associat ed with
proving their innocence are paid for out-of-poc ket. These out-of-pocket costs might include
travel expenses, police reports, and certified mail, t o name a f ew (Identity T heft, 2003) . The
amount of c osts incurred have been anywhere fr om as low as $4 to $ 30,000 and hi gher,
depending on the severity of the crime. The costs could be recovered if the thief is caught and
sentenced, but the likelihood that the thief has the money for retribution is very low, resulting in
total loss for some victims.
ASBBS E-Journal, Volume 4, No.1, 2008 49