Attorney General's Credit-Card Theft Highlights Prosecution ProblemsAttorney General's Credit-Card Theft Highlights Prosecution Problems

A recent attempted theft using the Massachusetts attorney general's credit card -- and her comments about it -- have renewed focus on jurisdictional problems authorities face when prosecuting credit-card and identity-theft cases.

The state's top prosecutor, Martha Coakley, told the Boston Herald that it was unlikely the case would be prosecuted.

Coakley received a call from Dell to confirm that she had purchased a $1,250 computer and wanted it shipped to a Texas address. Coakley told the company she hadn't ordered the computer and called to have the card canceled. Her comments after the incident have drawn attention to an issue police departments struggle with -- whether, how, and where to prosecute credit-card theft when a victim reports such a crime.

Paul Stephens, policy analyst for the Privacy Rights Clearinghouse, says that, for many local police departments, credit-card theft appears to be a low priority.

"In some jurisdictions, there's a reluctance to investigate," he says. "Some local police departments won't even take a report."

It also appears to be a low priority for credit-card issuers. "The financial institutions that issue the credit cards really haven't put pressure on legislatures to take action," Stephens says. "They sort of seem to fold it into the cost of doing business. Consumers aren't going to be held liable. In a typical situation, it's the bank that's been hit with the loss."

Ultimately, however, it's the consumer who covers the cost, through higher fees and interest rates, Stephens adds.

Federal lawmakers are considering rules requiring companies to notify customers of data breaches, and the Federal Trade Commission is working to smooth over jurisdictional issues resulting from overseas theft of credit-card information. The International Association of Chiefs of Police and the National Governors Association have begun to address inconsistencies among local and state investigators. Governors throughout the country are talking about the problem, while the IACP and Bank of America have teamed up to tackle problems surrounding identity theft. They launched IDSafety.org last year, which stresses the need for awareness and education among consumers and law enforcement authorities.

One of their top goals is to develop a national strategy for increasing law enforcement's expertise in investigating the crimes. In fact, identity theft is becoming such a major problem for law enforcement that Police Chief Magazine is dedicating an entire issue to it in May.

In some cases, like those involving organized crime rings, high victim counts, or large amounts of money, it's clearly the responsibility of federal agencies to investigate and prosecute. Most federal agencies do have units to deal specifically with identity and credit-card theft.

"They have a monetary level at which they begin their prosecutions," IACP's Allen Shoaff, who is managing the identity crime project, said during an interview Thursday. "It would be overwhelming if they tried to take every case. One of the big problems a victim has these days is who takes the report."

Often, a crime victim lives in one state, the perpetrator lives in another, and the businesses the perpetrator deals with are in yet another. That presents a challenge, especially since about 70% of the police agencies in the United States have less than 25 officers, Shoaff says.

To address that issue, the FTC has a standard form for victims to fill out, and victims can request that their police departments file their complaints under a miscellaneous category, if nowhere else. The National Crime Information Center also has database fields where every agency can report on identity crime. Some regions, including Rockland County, N.Y., and towns, such as Beaverton, Ore., are taking initiative on their own, Shoaff says.

For other local and state authorities, the IACP's identity crime project will release recommendations this year, according to Shoaff. One of the groups will release a model policy that local police departments can adopt and follow. That same group is making legislative recommendations since not all states have identity theft laws.

In the meantime, every agency should be accepting reports. Says Shoaff, "That's the starting point."