Identity theft is often perpetrated by organized crime.
Identity theft or identity fraud, is a global problem. It affects both Americans and citizens of other countries. Often identity theft that occurs in the United States is the direct result of criminal activity abroad. According to MSN Money, other countries that have less stringent prevention methods and more lenient punishments allow criminals to continue to operate.
Organized Crime
Organized crime plays a big hand in identity theft. Much of the identity theft that happens to Americans living in the U.S. is the direct result of organized crime in foreign countries. According to the Identity Theft 911 website, criminal organizations in Russia, China, Africa and Eastern Europe either purchase personal information from American criminals or are responsible for hacking or tricking Americans into giving their information. This information--usually financial--is then used to run up large bills under the assumed stolen identity.
Instability in World Financial Markets
Identity theft cost American consumers over $15 billion in 2006, according to the Identity Theft Resource Center. The total cost for identity theft worldwide is unknown as many countries have different reporting practices. Some agencies and countries report only amounts of money stolen while others include the cost to insurance companies, federal funding for prevention programs and legal fees. The result of these huge numbers is that financial markets show the impact of identity theft by passing along the cost to consumers. Interest rates on credit cards are higher, and fees for government services take into account the cost associated with verifying a person's identity. The cost may be subtle and even hidden but it is being paid by American consumers.
Perceptions of Americans Traveling Abroad
Certain countries are known for identity theft and, as a result, the U.S. State Department cautions Americans traveling there to be very cautious when exposing personal or financial information. According to "Wired" magazine, these countries include Russia and certain countries in Eastern Europe where American tourists might like to visit but which are not easily accessible due to concerns of identity theft. In addition, American travelers who have their identities stolen in those countries may not be covered by their financial institution back in the U.S. and may even have to pay for any fraudulent charges on their account.
Lack of Cooperation from Foreign Governments
One of the biggest concerns regarding international identity theft is that the American government takes such crimes seriously and the governments of nations where identity theft is rampant do not. For example, "Wired" states that areas of Russia are well-known for their prolific identity theft crimes yet the government allows financial institutions to continue processing fraudulent transactions and does not take the criminal perpetrating the crime as seriously as officials in the U.S. do.
Fraud in America
According to the U.S. Justice Department, American merchants that accept international customers are often targeted by foreign criminals using stolen identities. For example, an American business may receive an order for goods online and the destination for the order may be in a foreign country. Once the goods are shipped, the company's financial institution will contact the business owner and let him know the order was placed with stolen information. The merchant is often left holding the bill and even if the company is insured for such an occurrence, its insurance premium may go up.
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