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Grady, Maniam and Leavell
Financial institutions are also reluctant to put preventative measur es in place b ecause they ar e
afraid it will scare off possible custo mers. Businesses are making enough money, even with the
losses from identity theft, so they choose to take a chance instead of place preventative measures
in place.
CURRENT LAWS
The Fair Credit Reporting Act (FCRA), enacted in 1970, was one of the gove rnment’s earliest
attempts to prevent identity theft. The act put the Federal Trade Commission (FTC) in charge of
enforcing FCRA regulations. FCRA gave victim s the optio n of pursing restitution from credit
companies who aided in the process of identity theft. The FC RA suffers fro m a short statute of
limitations, causing the application of the law to cases of identity theft difficult (White, 2005).
This means that when the victim actually discovered that identity theft had occurred, it was o ften
too late to make any claims against the credit companies. FCRA also limits a victim’s course of
action by placing financial institutions, such as credit bureaus a nd lenders, off lim its to any
claims, only allowing the victim to pursue credit reporting agencies.
The Identit y Theft and Assu mption Deterrence Act of 1998 ( ITADA) was enacted to make
identity theft a federal crime. “Its central pr ovision states that “whoever knowi ngly transfers or
uses, without lawful authorit y, a means of identif ication of another person with the intent to
commit, or to aid and abet, any unlawful activity that constitutes a violation of federal law, or that
constitutes a felony under any applicable State or local law” shall be punished” (Fogarty, 2002, p.
2). Social security numbers and driver’ s license inform ation are not the only “m eans o f
identification” na med in the ITADA, biometric dat a, passport i nformation, alien registra tion
number, and others are also listed.
The ITADA designated the Federal Trade Co mmission (FTC) to receive and disseminate
information regarding iden tity theft to t he appropriate parties. Th e FTC is also responsible for
educating citizens on how to prevent identity thef t and the steps to take in the instance that
identity theft has alr eady occurred. T he act also provides the victi ms with the right to receive
restitution and gives law enforcem ent agencies the ability to deal with identity theft on their own
level.
The Fair and Accurate Credit Transactions Act (FACTA) was passed by Congress in 2003. This
act e stablishes per manent credit reporting standa rds and addresse s proble ms r elated to ide ntity
theft on a federal level (Linnhoff, 2004). FACTA is an amendment to the Fair Credit Reporting
Act which extends consumers’ rights re garding identity theft. Thi s paper will concentrate on the
items, included in the act, that are concerned with identity theft.
Receipts for purchases on credit once contained the customer’s full credit card number. This was
the first step in the crim inal’s process of retr ieving identity information. The enact ment of
FACTA eliminated this practice by requiring that credit card numbers on receipts be truncated, as
well as remo ving expiration dates. However, the receipts that are printed m anually still c ontain
the full card number and are still susceptible to thieves who rummage through trash.
Criminals often use postal services to aid in the process of committing identity theft. Once thes e
criminals have an individual’s name and address, they can easily send a change of address to the
credit co mpany and reque st an additional card be s ent to that address. Card issuers are now
required to s end notification to both the new and old address that an additional card has been
requested and help customers when errors have been discovered (Linnhoff, 2004). In theory, this
requirement will reduce, and eventually put a halt to, this form of identity theft from occurring.
ASBBS E-Journal, Volume 4, No.1, 2008 51