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According to recent figures, roughly 700,000 people a year are victims of identity theft, the stealing of personal data such as a person's social security number or credit card information. This statistic underscores the fact that identity theft is becoming one of the fastest-growing crimes in the United States, as evidenced in the Sept. 11 tragedy when terrorists used identity theft to finance their operations. A February 2002 article in Time magazine even deemed identity theft "an American epidemic." This identity fraud boom appears to be a consequence of advances in online computer software and technology, including both hacking programs and "break-in" software that are easily accessible on the Internet.

The most prevalent cybercrimes deal with fraudulent credit card use online. According to a recent survey from Celent Communications, a market research firm, the fraud rate on the Internet is 0.25 percent for Visa and MasterCard transactions, which is significantly higher than the offline fraud rate of 0.08 percent for Visa and 0.09 percent for MasterCard. Credit card fraud over the Internet often occurs when someone fraudulently uses another person's credit card to make online purchases. A "cyber fraudster" need not have the actual credit card in order to shop over the Internet; the only information required is the card number and expiration date, along with the cardholder's name and delivery address. It is important to note that these details can easily be obtained from seemingly harmless items such as discarded credit card vouchers.

With regards to credit card fraud on the Internet, there have also been numerous incidents in which customer credit card details have been stolen from Web site databases and later used for fraudulent purposes. Computer hackers can obtain credit card numbers by breaking into the computer systems of online merchants and thereby gaining access to thousands of credit-card records. In contrast to hackers that steal credit card data for their personal use, information "merchants and mercenaries" primarily seek to profit from the sale of identity information and often sell credit card data online. According to a recent New York Times article, "tens of thousands of stolen credit cards are being offered for sale each week on the Internet in a handful of thriving, membership-only cyberbazaars…" Clearly, the Internet aids in the commission of credit card fraud in various ways.

Identity theft, especially credit card fraud, has grown quite rapidly due to the fact that it easy to commit and low-risk for criminals. If criminals are in fact caught and prosecuted they typically do not receive stiff sentences, due to the nonviolent nature of the crime. Furthermore, the anonymity that technology can provide makes detecting criminals a difficult task. Tools such as anonymous remailers and encryption devices are capable of providing exceptional protection from even the most technologically advanced regulatory and enforcement agencies.

In response to the recent proliferation of identity theft crimes, the Federal Trade Commission has increased its enforcement staff by 50 percent. Additionally, "bills have been introduced in Congress that would require credit bureaus to investigate discrepancies in individual reports, penalize lenders for ignoring fraud alerts, [and] truncate card numbers on receipts to prevent 'dumpster diving'…"

Various major retailers have also decided to upload a vast quantity of fraud records into a national database, due to the fact that merchants are often financially accountable when criminals make fraudulent purchases online. While these governmental and business measures are noteworthy, more needs to be done, however, in order to secure online proof of identity. For identity theft will likely continue to pose a challenge to today's society, which increasingly relies on the use of both the Internet and electronic commerce.