New ID Theft Protection Law Passed By Congress

Last week the United States House of Representatives finally passed an amended version of the 2007 Identity Theft Enforcement and Restitution Act initially passed by the Senate last year. The new version, now awaiting only President Bush’s approval, includes what some consider vast improvements from the previous one. Once signed into law, the Act will give consumers far more recourse when it comes to protecting themselves from identity theft and seeking damages if they are victimized.

The Ability to Sue Identity Thieves

The Pros: Under the new act, victims will be allowed to sue their perpetrators for restitution. This could serve as a significant deterrent to identity thieves who now have to pay little or nothing if caught in addition to serving minimal jail sentences. Some identity thieves, in the past, have been able to rack up several hundreds of thousands of dollars in fraudulent charges and have enjoyed the luxuries that come with it only to be slapped with a small fine when tried in court. Although the victim isn’t responsible for prepaying all of those debts, he or she may have to spend a lifetime undoing the damage done to a credit report or pay higher interest rates on current or new credit while the case is being resolved. In the very least, this could help victims of identity theft greatly reduce the cost of being victimized.  

The Cons: A huge percentage of identity theft cases involve foreign nationals participating in tightly woven identity theft rings that span multiple countries and usually operate in anti-United States territories. Because these cyber-based identity thieves aren’t committing a crime on United States soil, and they may be offered protection from the anti-American countries in which they live, they can be impossible to prosecute. So, although this amendment to the 2007 Identity Theft Enforcement and Restitution Act may help victims recover some of the damages for identity crimes committed by fellow Americans, it won’t do anything to deter international crime rings that still can’t be touched by the law.

All Victims Will Have the Ability to Press Charges

The Pros: Under the initial Act passed by the Senate in 2007, only victims who had incurred a minimum of $5,000 in damages could press charges and file lawsuits against their perpetrators. Under the new Act anyone can file lawsuits no matter how much (or how little) was fraudulently charged in their name. This is a tremendous help to victims from lower income brackets. If money is wrongfully taken from your bank account or fraudulently charged in your name, amounts totaling less than $5,000 can still cause significant financial hardships for most Americans. This new amendment allows victims to decide whether or not it’s worth going after an identity thief to seek restitution.

The Cons: Legal fees could significantly raise the cost of being victimized and would greatly increase the amount a victim would need to seek from his or her perpetrator. But most identity thieves do not have the means to make an honest living in order to repay the debt owed to the victim. If jail time is also part of their sentencing, years could pass before identity thieves are even in a position to begin repaying the money. So, choosing to take the case to court could wind up costing the victim far more in out of pocket expenses than the actual crime itself—especially in cases where a thief would only be ordered to pay less than $5,000.

It Will Be a Felony to Install Malware or Spyware on Ten or More Computers

Pros: Since malware and spyware are tremendous assets in the hands of identity thieves, slapping those who get caught with significant penalties is definitely a good thing. If malware or spyware is installed on a person’s computer, identity thieves can steal passwords and gain access to sensitive personal information without a person even knowing it. Basically, they allow thieves to steal people’s personal information without ever actually touching their computers. Penalizing thieves like this can’t be a bad thing.

Cons: However, it is extremely difficult to catch the people installing malware and spyware. Since many tech savvy identity thieves know how to do this without being detected or traced (some even know how to point a trace to an innocent person), it’s probably not wise to believe that passing this Act is going to significantly reduce the number or malware and spyware cases seen each year.

Even Same State Crimes Can Now Fall Under Federal Jurisdiction

Pros: This is definitely one of the strongest parts of this new Act because it is one of the most practical. As it stands now, when an identity thief strikes if he or she lives outside of the state where the victim resides, it falls under federal jurisdiction. But if the thief and the victim live in the same state, the case must be referred to local authorities who have far less experience with (and far less interest in) identity theft cases. Now, by allowing all cases to fall under federal jurisdiction (the FBI and Secret Service) it will become easier for identity thieves hitting multiple states in one spree to get caught, and for victims to get the help they deserve.

Cons: The only potential foreseeable con here is that there might be a longer wait when it comes to getting your case assigned to a federal agent. But better a longer wait and a more qualified person than a shorter wait and someone who doesn’t really know how to help you.

President Bush is expected to sign this Act into law immediately. It was initially proposed by Senator Patrick Leahy of Vermont and has gained positive support from the Business Software Alliance and the Cyber Security Industry Alliance. Hopefully, it does much to shrink the number of identity theft cases each year from the whopping 9 to 10 million currently reported. Learn the ins and outs of this act so you can appropriately react if identity theft ever happens to you or someone you know.