Most people seem to think identity theft is a government issue, that our elected officials need to make some laws to stop identity theft.
The good news is, they already have. A series of data security regulations have been put in place to help protect our private information. Laws like FACTA and HIPAA have created fines for companies that let our identities slip into criminal hands. A big area of concern is stolen social security numbers, used for social security identity theft (usually just called Social Security Fraud.)
The odds of going to jail for identity theft are less than 1-in-1,000. Laws have been put in place to punish identity thieves. But the arrest rate is low – just one-in-twenty reported cases. The conviction rate is even lower, one-in-fifty Although arrests and conviction rates (as well as sentences) are improving, the point here is that the odds are in the identity thief's favor that they will not pay for their crime.
In fact, looking over the past decade, the government seems to be encouraging identity theft among illegal immigrants. A major factor in identity theft (and the US economy in general) is illegal immigration. Nobody wants to talk about it, because of the political aspects.
Everyone knows you must give your employer a social security number to work in the United States. There are also laws requiring companies to verify that information, but an employee can work while the company waits for the response, even if they are using a stolen social security number.
Various law enforcement agencies have used the Identity Theft and Assumption Deterrence Act to fight illegal aliens using stolen social security numbers. That was a good start, and helped slow down identity theft between 2005 and 2008. But that changed in the spring of 2009.
The US Supreme Court ruled that an illegal immigrant has not committed a crime unless s/he knew the stolen social security number they used belonged to a US citizen. In other words, saying “I didn’t know.” can be a defense if you work in the US illegally. After this ruling, hundreds of previous convictions were appealed, and social security fraud is suddenly back on the rise.
None of the agencies involved are trying to tackle the problem because they all benefit from it, as does corporate America. Here’s an example:
- The Social Security Administration (SSA) collects money from all workers, including identity thieves.
- If a name and number reported doesn’t match the name the SSA has on file, the money goes into an “Earnings Suspense File.” That fund held nearly $500 billion in 2006.
- The SSA will only pay benefits to one individual.
From that perspective, there is no reason to tell anyone they have a stolen social security number. In fact, it’s against the Internal Revenue code for the SSA to notify you that someone else is using your number.
The companies that pull your credit report know, too. But once again, they aren’t allowed to tell you. All three credit bureaus sell a specialized report, which shows all activity under a social security number. If there are two names associated with a certain SSN, two different files are made to track the credit, but both of them are associated with that SSN. Companies that want to give you credit can buy these reports, but they cannot tell you what they find.