Understanding Identity Theft Laws

Law enforcement and government agencies take identity theft seriously. They recognize it as a major crime that has a long-lasting impact on the health of the economic system. For example, banks that reimburse fraud victims for their losses stand to lose plenty of money in the process. Because of the seriousness of the crime, specific identity theft laws have been passed at the federal and state levels in the United States.

Federal Laws

In 1998, the Identity Theft and Assumption Deterrence Act was passed by the US Congress. Those identity theft laws made identity theft a federal crime for the first time. Under this law, anyone who is found guilty of identity theft can be sentenced to up to 15 years. Plus, depending on how the crime was committed, the criminal could be in violation of many other federal laws, including computer fraud or financial institution fraud.

In 2004, President Bush signed the Identity Theft Penalty Enhancement Act. This law amends all previous laws governing identity theft. This law defined aggravated identity theft and set punishment levels for the crimes that fit into this category. The law defines aggravated identity theft as when a person “knowingly transfers, possess, or uses, without lawful authority, a means of identification of another person” while committing certain felonies.

When someone is found guilty of aggravated identity theft, two years is added to their sentence from the original felony. If the crime has certain terroristic elements, five years is added to the original sentence. The law also allows for even stiffer penalties when someone abuses their position of power or commits the crime at their place of employment.

State Laws

In addition, each state has a set of identity theft laws. The penalties for these crimes vary greatly on a state to state basis. Some states send mixed signals when it is time for punishing an identity thief. For example, Alabama ranks identity theft as a Class C felony while trafficking in stolen identities is considered a more serious, Class B felony. While those categorizations may sound harsh, the maximum prison sentence for a Class B felony is two years and only half that for a Class C felony. In some states, the identity thief could be out on the street before the victim has even cleaned up the mess left behind.

Internet Fraud Laws

Another set of identity theft laws came in 2008 with the passing of the Identity Theft Enforcement and Restitution Act. Prior to the passing of the law, so-called cyber criminals had to cause at least $5,000 in losses before they could be prosecuted. That ridiculous requirement is gone thanks to this law. If, at minimum, ten computers were attacked, the thief can be charged with a felony under this new law.