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Identity theft causes the destruction of an indivi dual’s credit history. Many consum ers do not
discover that identit y the ft has occurred until the damage has already been do ne. W hen
consumers actually realize what has ha ppened, they contact a c redit reporting agency to infor m
them of the criminal action. Once a cr edit reporting agency has been info rmed by the consumer,
FACTA requires that the agency include a fraud alert in their record s. This fraud alert informs
anyone who accesses that information that identity theft has occurred. Credito rs will go to great
lengths to verify the ident ity of the consumer who has a fraud alert on their record. This is a
nuisance for the consumer, but hinders criminals from committing further identity theft.
FACTA also addresses the concerns of those consumers whose cr edit reports have a fraud a lert
attached. FACTA allow s consu mers to take c ontrol of their cr edit by preve nting i nformation
related to identity theft from being distribut ed. Consum ers wa nting to stop acce ss to their
fraudulent d ata onl y need to tur n in a police report (Lin nhoff, 200 4). FACTA also aids
consumers b y eventually erasing the inform ation r elated to identit y theft fr om their fil e. It
requires that credit repor ting agencies block the information related to identit y theft on the
consumer’s credit report.
The best line of defense against identit y theft is for consumers to vigilantl y look at their credit
report. Prior to the passage of FACTA, consumers had to purchase a copy of their credit report in
order to keep track of their cr edit history. Only when there was suspicion of fraudulent activit y
did consumers have the right to a free report. FA CTA extends the right to a free credit report to
anyone who requests one. The sad realit y is that even though credit reports are now free, there
are still consumers that do not access that information to ensure that their credit is indeed correct.
FUTURE DIRECTIONS
According to Lacey (2004) “In the United States id entity theft was described as growing at a rate
of 30 percent per year, with its losses esti mated at reaching $8 billion by 2005” (p. 247).
Businesses and governments, as well a s individuals, have been working to fi nd solutions to help
prevent identity theft. Congress has e nacted severa l laws that address the situation, but e ven
these la ws d o not address every aspect of identity theft. Businesses have pla ced preventat ive
measures into operation, but these still do not guarantee the demise of identity theft. Consumer s
need to examine their own situations and modify the level of security accordingly.
One possible technique to help combat identity theft is the verification of an individual’s identity
by the use of biom etric technolog y (S overn, 20 04). This sy stem would be a trem endous step
forward in verify ing identities as w ell as preventi ng further identity theft. The only drawback
would be th e cost of in stallation and mainte nance. Not only do some com panies lack the
resources necessary to obtain biom etric technology, but the c osts of devel oping this s ystem
usually outweigh the benefits received. In most instances, the costs incurred due to identity theft
are less than the costs required to acquire a biometric system.
Another sug gested remedy, which attem pts to pr edict identit y theft, is called cross industry
pattern recognition (Cheney , 2003). T his would assem ble data across industries allowing each
company to observe the path of possible identit y thieves. This approach will com bine individual
acts together, that when compared as a whole appears fraudulent, but the individual acts alone do
not raise suspicion. This will reveal fraudulent patterns of behavior that com panies can identif y
and stop before further activity occurs.
The best fight against identity theft is for cons umers to be aware of their credit history and
employ practices to s afeguard their identity inform ation. The first line of defense i s to keep
personal information in a safe location. A si mple mistake that people make is to keep their social
ASBBS E-Journal, Volume 4, No.1, 2008 52
ID Theft