Usage of the terms Identity Theft and Identity Fraud

In general usage, the term identity theft is used more commonly in the United States and the term identity fraud is used more commonly in Europe and the United Kingdom. Researchers and others with a specialized interest in the subject of identity theft and identity fraud have suggested various usage distinctions between these two terms. These distinctions generally take one of three forms:

1. Identity theft as a precursor to identity fraud
2. Identity theft as a subset of identity fraud
3. Identity theft as new account fraud

1. Identity theft as a precursor to identity fraud

This model of identity theft and identity fraud takes a process view, where identity theft is the act of collecting personal information about another person in order to commit a subsequent crime by using that information to impersonate the victim. Identity fraud is the subsequent crime when a false identity is used in order to gain goods, services, benefits or avoid obligations. This model corresponds to our recommended specialized usage of the terms "identity theft" and "identity fraud".

References:

Javelin (2005). 2005 Identity Fraud Survey Report (Complimentary Overview). Pleasanton, CA, Javelin Strategy & Research.  (accessed May 16, 2005)

"This report uses the term “identity theft” to describe unauthorized access to personal information, and “identity fraud” as the use of that information in order to achieve illicit financial gain. It is important to note that identity theft can occur without identity fraud, and fraud can occur without theft (such as, for example, with relatives who have been given access to PIN numbers who then misuse the PIN number to steal funds from the attached accounts)."

Collins, J. M. (2005). Preventing Identity Theft in Your Business. Hoboken, NJ, John Wiley and Sons, Inc.

"Identity theft, however, is to be distinguished from identity crimes – those offenses committed using the stolen personal or business identifying information – or “identities.” Thus, the conceptual relationship between identity theft and identity crime is that the former facilitates the later. In short, stolen identities are used to commit many other crimes which is why identity theft also can be viewed as an all-encompassing or overarching megacrime.…

Personal identity theft is the unauthorized acquisition of another individual’s personally sensitive identifying information: personal identity crime is the use of such information to obtain credit, goods, services, money, or property, or to commit a felony or a misdemeanor (p. 8)."

"The theft and the crime are two different offenses, each with its own structure of penalties and fines (p. 13)."

Canada (Department of Justice) (2006). Identity Theft: Consultation on Proposals to Amend the Criminal Code. Criminal Law Policy Section

"The 2004 Consultation proposed a “double-branched” definition of identity theft, noting that the first branch “can generally be described as the pre-attempt, preparatory stage of acquiring, collecting and transferring personal information” and the second branch as “the actual use of the personal information” in the attempt or actual commission of an offence... (p. 1)."

"What is noteworthy is that most of these (existing) offenses address the “second branch” of the definition of identity theft proposed above. In other words, existing offences largely address the unlawful use of another person’s identity.

By contrast, identified problems with the current Criminal Code lie in the comparatively limited degree to which it addresses the activities associated with the first branch, namely the collection and transfer of personal identity information prior to the commission of an offense.

Because identity fraud is already largely criminalized in Canada, proposals for the enactment of new offences are generally limited to those which would address the problem of identity theft, in this case meaning the taking, possessing and transferring of identity information, but not the enactment of an offence directed to the use of another person’s information (p. 2)."

"The 2004 Consultation asked whether an offence should be created for the use of another person’s identity information. This conduct forms the heart of what many people call identity theft and what we propose to characterize as identity fraud (p. 13).

… emphasizing the continuum of criminal behaviour which begins with identity theft and ends with identity fraud. (p. 15)

2. Identity theft as a subset of identity fraud

In this model, identity fraud describes the larger problem of any frauds committed through the use of a false identity. The identity can belong to a real person or be fictitious. Identity theft is a subset of these frauds, where the false identity used in the fraud belongs to a real person.

References:

Lacey, D. and S. Cuganesan (2004). “The Role of Organizations in Identity Theft Response: The Organization-Individual Dynamic.” The Journal of Consumer Affairs 38(2): 244-261.

"Identity theft involves an individual falsely representing him- or herself as another real person for some unlawful activity” and “identity fraud comprises both the use of a real person’s identity (identity theft) as well as that of a fictitious identity (p. 245)"

Gordon, G. R., N. A. Willox, et al. (2004). “Identity Fraud: A Critical National and Global Threat.” Journal of Economic Crime Management 2(1): 1-47. (December 21, 2005)

"Identity fraud “is defined as the use of false identifiers, fraudulent documents, or a stolen identity (identity theft) in the commission of a crime…Identity fraud is broader than identity theft in that identity fraud refers to the fraudulent use of any identity, real or fictitious, while identity theft is limited to the theft of a real person’s identity (p. 7)."

3. Identity theft as new account frauds

The U.S. banking industry commonly uses the term identity theft to refer only to frauds where a false identity is used to open new credit accounts. If the false identity is used to access existing accounts it is called identity fraud or account fraud,

References:

Cavoukian, A. (2005). Identity Theft Revisited: Security is Not Enough. Government of Ontario. Information and Privacy Commissioner/Ontario.  (October 16, 2005)

"True identity theft occurs when someone uses your personal information…to impersonate you and apply for new credit accounts in your name. Identity fraud typically involves an unauthorized person using your credit card number from an existing account to make purchases (p. 2)."

LibertyAlliance (2005). Liberty Alliance Whitepaper: Identity Theft Primer, Liberty Alliance Project.  (March 6, 2006)

"Many financial institutions are insisting on the following definition of identity theft: “Using someone’s personal information to obtain new accounts in the person’s name.”  Unfortunately this sidesteps the situation where a criminal uses personal information to drain someone’s account. That is considered account fraud, not identity theft (p. 4)."