Identity Theft: Feds claim they are acting to protect Americans' identities

July 1, 3:53 PMLaw Enforcement ExaminerJim Kouri

 (The following report is based on documents obtained by the National Association of Chiefs of Police's Fraud and White-Collar Crime Committee.)

The loss of personally identifiable information, such as an individual's Social Security number, name, and date of birth can result in serious harm, including identity theft. Identity theft is a serious crime that impacts millions of individuals each year.

Identity theft occurs when such information is used without authorization to commit fraud or other crimes. While progress has been made protecting personally identifiable information in the public and private sectors, challenges remain.  At large number of the perpetrators of this crime are illegal immigrants who purchase identities from criminal organizations such as the notorious Mexican Mafia.

The Government Accountability Office was asked to testify on how the loss of personally identifiable information contributes to identity theft. The GAO analyzed the problem of identity theft; steps taken at the federal, state, and local level to prevent potential identity theft; and  vulnerabilities that remain to protecting personally identifiable information, including in federal information systems. 

The GAO relied primarily on information from prior reports and testimonies that address public and private sector use of personally identifiable information, as well as federal, state, and local efforts to protect the security of such information. GAO and agency inspectors general have made numerous recommendations to agencies to resolve prior significant information control deficiencies and information security program shortfalls. The effective implementation of these recommendations will continue to strengthen the security posture at these agencies.

Identity theft is a serious problem because, among other things, it can take a long period of time before a victim becomes aware that the crime has taken place and thus can cause substantial harm to the victim's credit rating. Moreover, while some identity theft victims can resolve their problems quickly, others face substantial costs and inconvenience repairing damage to their credit records. Some individuals have lost job opportunities, been refused loans, or even been arrested for crimes they did not commit as a result of identity theft.

Millions of people become victims of identity theft each year. The Federal Trade Commission (FTC) estimates that in 1 year, as many as 10 million people -- or 4.6 percent of the U.S. adult population -- discover that they are victims of some form of identity theft, translating into reported losses exceeding $50 billion.

Several steps have been taken, both in terms of legislation and administrative actions to combat identity theft at the federal, state and local levels, although efforts to assist victims of the crime once it has occurred remain somewhat piecemeal. While there is no one law that regulates the overall use of personally identifiable information by all levels and branches of government, numerous federal laws place restrictions on public and private sector entities' use and disclosure of individuals' personal information in specific instances, including the use and disclosure of Social Security Numbers (SSN) -- a key piece of information that is highly valuable to identity thieves.

One intention of some of these laws is to prevent the misuse of personal information for purposes such as identity theft. Despite efforts to prevent identity theft, vulnerabilities remain and can be grouped into several areas, including display and use of Social Security numbers, availability of personal information through information resellers, security weaknesses in federal agency information systems, and data security breaches.

GAO's work indicates that persistent weaknesses appear in five major categories of information system controls, including access controls which ensure that only authorized agency personnel can read, alter, or delete data. As a result, federal systems and sensitive information are at increased risk of unauthorized access and disclosure, modification, or destruction, as well as inadvertent or deliberate disruption of system operations and services.

GAO has reported that federal agencies continue to experience numerous security incidents that could leave sensitive personally identifiable information in federal records vulnerable to identity theft.