Online Identity Theft

As technology becomes more advanced and peoples schedules more hectic, there has been an increasing reliance on the Internet for conducting business and carrying out daily affairs. Although many have grown accustomed to the convenience of use and broad access to information, this free flow of data has created a haven for a new breed of criminal called the identity thief.
Unfortunately, the high incidence rate and the great distances between the offender and victim have thwarted the detection and prosecution of these crimes. Another problem in combating identity theft is the lack of any formal, centralized identification system. To no surprise, law enforcement officials have met with significant obstacles given that the Internet has fostered the manufacture and sale of counterfeit and black-market identification documents and enabled these criminals to duplicate and bypass security measures that have been implemented by various banking and financial institutions.

Congressional Response in 1998

The initial response by Congress was the passage of the Identity Theft and Assumption Deterrence Act in 1998, which imposed a maximum term of 15 years imprisonment, fines, and criminal forfeiture of any personal property used or intended to be used to commit these offenses. At the state level, New Jersey has enacted the Identity Theft Protection Act, which affords consumers with the right to engage a security freeze that prevents identity thieves from opening new accounts. Under the Act, companies are also required to inform a consumer whenever their identity has been placed in jeopardy due to an attempt at unauthorized access or breach of their personal information.

Department of Justice

In view of these problems, the Department of Justice has taken necessary steps and measures in expanding national coordination and cooperation from law enforcement nationwide. Through the development and implementation of the Internet Fraud Initiative and the Internet Fraud Complaint Center, government has now begun to work in a collaborative effort with members of the public in addressing this mounting problem. The Internet Fraud Initiative not only provides for coordination with the Federal Trade Commission in gathering data on prevalence and incidence of these crimes, but also offers basic and advanced training for prosecutors and agents. The Initiative also supports a joint-FBI-National White Collar Crime Center and Internet Fraud Complaint Center which promotes coordination among federal prosecutors together with foreign, state, and local law enforcement agencies. Additionally, this program serves to educate the public as to detection and prevention methods. In a similar vein, the Internet Fraud Complaint Center is assigned to handle and process online consumer complaints. This includes the duty to gather and analyze data and advise law enforcement personnel as to potential schemes and breaches of security.

The Department of Justice continues to take a strong stance in improving its focus and capacity towards handling these types of crimes. These developments have served as a catalyst in increasing the prosecution of these types of cases. With the implementation of the Department’s Fraud Section, federal prosecutors may obtain continuous advice and access to intelligence as well as legal support in the prosecution and litigation of these crimes. There have also been expansions to a national database through which prosecutors can obtain vital information with respect to potential Internet fraud, criminal schemes and activity, and potential leads and witness information. Moreover, the sentencing guidelines have been modified to enable prosecutors to seek higher sentences in proportion to the gravity of certain types of offenses.

What to do as a Business

In the event of an unauthorized breach of security or incident involving alleged fraud, a company that operates or conducts business within the state must promptly contact the State Police. The law also mandates that a company or institution has the obligation of revealing any and all actual or potential breaches to the customer.

Consumer Response

A consumer who becomes suspicious of any potential breaches of their personal or financial information should contact local authorities. A criminal complaint may be filed in accordance with N.J.S.A. 2C:20-25, which encompasses computer theft and related criminal activities and assesses fines and penalties based upon the magnitude and severity of the offense. As an additional safeguard, a security freeze may be placed on credit reports in order to ensure limited and/or restricted access to his or her credit information from a specific source or agency.

Although there have been some positive steps in the right direction, Internet fraud and identity theft will continue to require a continuous effort on behalf of the government and the members of the public in order to prevent these crimes from reaching epidemic proportions

Celestino A. Labombarda is an Associate at WJ&L. Cel is active in the Litigation area of the firm’s practice handling general civil litigation matters.

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