Identity Theft and Rational Choice Theory
Identity theft is a crime that has existed from the time identity was created, but in the modern society, the prevalence of the crime has gone up. Some scholars have called identity theft the “crime of the new millennium”. However, in academics identity theft is a new form of crime that is still under study. Surveys done in the U.S has shown that identity theft is one of the white-collar crimes whose prevalence rates are on the increase (Fell 1). For example, studies done in the U.S between 2004 and 2005 indicated that approximately 7 percent of the U.S population above the age of 16 years has been subjected to some form of identity theft. The most common type of identity theft reported was the stealing of account information such as credit card data. The report also indicated that identity theft leads to losses amounting to 25 billion dollars annually, but most victims incurred personal losses that were less than $100 (Vieraitis and Shuraydi 6). This paper examines identity theft from a sociological perspective based on the rational choice theory.
Identity Theft from the Rational Choice Theory Perspective
Rational choice theory state that people make decisions after performing a cost-benefit analysis. Cesar Beccaria, one of the pioneering criminologist developed the theory towards the end of 17th the century. However, the theory did not gain any significance until 1960s when Games Wilson and Gary Becker revisited it. Rational choice theory was adopted in sociology when James Coleman used it towards the end of the 1980s (Haycraft 13-15). Rational choice theory can be used to study offenders who are likely to commit certain crimes, or crimes that are likely to be committed by certain individuals. This means that offenders that commit certain crimes often consider whether they possess the required skillset. In offense specific crimes, the offender is more likely to assess the nature of the crime before making their decision to commit crime (Haycraft 13-15).
Based on the rational choice theory, people commit crime after evaluating the nature of the crime, and the benefit they are likely to achieve. Hence, crimes may be committed if the benefit is worth the risk, or when the offender has a personal grudge he/she needs to resolve (Haycraft 13-15). Proponents of rational choice theory have not managed to unravel the exact process that takes place in a criminal’s mind, but the theory can prove that in some cases, criminality is an issue of personal decision and self-efficacy. Proponents of rational choice theory have argued that people are involved in crime as either perpetrators or conspirators. Perpetrators are people committing the crime, while conspirators are those that facilitate the crime without actually taking part in it (Haycraft 13-15).
Punishing both perpetrators and conspirators in criminal activities might help prevent identity theft by reducing the opportunities the criminals have at their disposal. On the same note, organizations and corporations that have poor data protection measures should be charged with criminal negligence. Under the current identity theft laws, businesses are less likely to be charged for the aforementioned crime (Haycraft 13-15). Nevertheless, rational choice theory has been criticized for failing considers factors that are unique to the individual that motivate him/her to engage in certain crimes. However, rational choice theory is effective in analyzing identity theft because people who take part in the crime compare their chances of being caught and the consequences, with the benefits they are likely to get if they get away with the crime (Haycraft 13-15).
The negative feelings or guilt that identity thieves experience is often downplayed by the rationalization that covers self-guilt. Some variation of the rational choice theory argues that people are constantly seeking ways to lower pain and maximize pleasure. Some of the pleasures people seek to maximize on include monetary gain or the pleasure associated with the crime (Haycraft 13-15). People who commit identity theft do so in order to accumulate wealth in the shortest amount of time possible. After the crime, the individual will have to rationalize their actions to reduce guilt and negative feelings while maximizing on the pleasure (Haycraft 13-15).
The rational choice theory also contains the idea of bounded rationality, which refers to the tendency of people to make decisions based on limited information, impaired cognitive capacities to process the information, and less time to make a choice. When people engage in criminal acts, there are many factors that they are unware of, but they accept certain factors associated with the risk of the crime such as the preventative measures put in place to deter theft. This means that every time an offender makes a criminal decision no matter how sound they think it is, they will still be limited by the bounded rationality because they cannot tell all the possible factors that affect their decision (Haycraft 13-15).
People who commit identity theft are just like other criminals, including street criminals, and one thing they have in common is that they do not fully understand the situation they are facing. For instance, offenders who commit crimes while on drugs are more likely to have made an irrational choice (Monhan 156). However, from their perspective, they made rational choices. Identity theft has remained an attractive crime despite of the tools that have been developed to deal with it. Some experts have argued that identity theft has remained highly prevalent because of poor control over personal data. Data obtained from the Fair Credit Reporting in the U.S, indicate that fraudsters provide falsified information to creditors, who accept the information as valid (Monhan 156).
Hence, some experts have concluded that the high prevalence of identity theft is not caused by the ease of accessing personal information, but by the tendency of credit givers to take risks. Nonetheless, understanding the reason and the process offenders use to commit crimes has a significant influence on policy and theory. In addition, most studies done in the field of criminal decision-making are informed by the rational choice theory (Wright para. 1). People have a tendency of pursuing goals that reflect their personal interest, and will make a conscience decision to engage in crime if the rewards exceeds the benefit that can be obtained while engaging in a legal activity. On the contrary, the decision of an individual to refrain from criminal acts can also be informed by the fact that the act has less benefit compared to the risk of being caught and subsequently prosecuted (Wright para. 1).
Some of the discipline that borrows heavily from the rational choice theory to explain criminal behavior include cognitive psychology, economics and criminology. Early proponents of the rational choice theory borrowed concepts from the theory of expected utility, which is an economic theory (Copes and Vieraitis 242-243). This theory enabled the formulation of criminal decision-making models that could be conveyed mathematically. The concept of expected utility is based on the idea that offenders are rational calculators that is, they make decisions that generates the great rewards from limited efforts. However, the tendency to depict criminals as raw economic calculators has been challenged by various arguments. One of the criticisms is that most crime is characterized by reckless behavior and opportunism that contradicts calculated decision-making in rational choice theory (Copes and Vieraitis 242-243).
Consequently, researchers started to focus their inquiries on the manner offenders considered their options within a certain sociocultural concept before making their decisions. This improved the understanding of the processes offenders use to make decisions. This development in research changed the understanding of offender behavior from the earlier understanding based on quantitative methods (Copes and Vieraitis 242-243). The new understanding was based on the offender’s perspective. The new studies looked at the various components of the decision to engage in crime that included the choice to offend, the target, and the perception of the rewards and costs associated with the crime. This understanding is in line with the concept of bounded rationality within the rational choice theory (Copes and Vieraitis 242-243).
The principle of bounded rationality considers the context of the situation, physical and social context within which criminal decisions take place, and the manner the perpetrators perceive their environment. This means that the rewards and costs criminal assess before taking part in crime are subjective and dynamic (Copes and Vieraitis 242-243). For instance, when circumstances change, the risks that prevented people from committing certain crimes may become manageable, and the rewards that were initially considered small may act as a powerful attraction. On the contrary, the rewards associated with certain crimes may lose their value, leading to an increasing in risks, and this may make people to refrain from committing such crimes (Copes and Vieraitis 242-243).
Therefore, understanding the manner in which the minds of people who steal identity works requires research to place the process criminals use to make decisions within the context of their lifestyle. Researchers who have interviewed frequent street offenders have shown that most of them give priority to having a good time and not anything else (Copes and Vieraitis 242-243). Street criminals embrace fast living and partying, a behavior that makes them to indulge in expensive behavior frequently. The low value rewards associated with street crimes deters people belonging to the middle class from engaging in such crimes. However, in the presence of additional values such status and independence, some members of the middle class can engage in low street crimes (Copes and Vieraitis 242-243).
Moreover, over indulgence in the middleclass lifestyle and counterproductive behavior such as gambling can put members of the middleclass in debt and push them towards street crime. Regardless of class, lifestyle interferes with the subjective assessment people have on the rewards and risk associated with a crime. The dynamic nature of the process criminals use to assess risks and rewards play an important role in deciding whether a criminal will proceed to commit a crime or refrain from the act (Copes and Vieraitis 243-244). From this perspective, the bounded model of rational choice theory has results that are significantly different from models that explain behavior on pure rationality. For example, based on the concept of bounded theory of rationality, increasing the severity of punishment does necessarily deter people from committing a crime because factors such as drug use, desperation, and criminal company counteract these measures (Copes and Vieraitis 243-244).
However, the above argument does not mean that anti-identity theft policies based on deterrence will be ineffective. What the argument suggests is that policymakers should consider the experiences and the lifestyles of people who commit most of the identity thefts. The availability of criminal opportunities also influences the likelihood of an individual committing a crime, even after assessing the risks and rewards associated with a crime (Dion, Weisstub and Richet 110). An individual may desist from committing a crime until he/she perceives the present opportunity. Some rational choice theorists have argued that people commit crimes when they are motivated; have suitable targets; and the absence of guardians to deter them. For example, a criminal interested in committing burglary will also look for a target that is not guarded in addition to assessing the risks and rewards associated with the crime (Matsueda and Kreager 26-28).
The crime of identity theft affects at least two victims, which are the person whose identity is stolen and the financial institution that is defrauded. This has made experts to focus on the ways to lower the harm the victim suffers. Few studies and parliamentary inquiries that have interviewed victims of identity theft have found that they suffer both financial and psychological losses. This has made policy on fighting identity theft to shift from solely focusing on financial institution as the victims to concentrating on the individual (Matsueda and Kreager 26-28). The fate of victims of identity theft in the criminal justice system is still unknown. However, in some jurisdictions like the U.S, the criminal justice system has set up minimum requirements for an identity case theft to proceed. Some of the factors the courts consider include the amount of financial loss suffered, the time that has elapsed since the discovery and whether there are organized criminals involved (Matsueda and Kreager 26-28).
Experts have also investigated the reciprocal nature of identity theft. Financial institutions and card companies bare most of the financial damage associated with identity theft. This means that some victims of identity theft may not see themselves as victims, and may be reluctant to take measures to prevent similar incidents in the future (Kim, Clarke and Samuels para. 1). The costs businesses incur because of identity theft is still unknown. Most credit companies do publish information on the cost they have incurred because of identity theft. However, most of the companies fail to report other costs they incur because of identity theft, for example, the amount spent on investigations, and the amount they are likely to incur in improving their security measures (Newman and McNally 60).
Apart from the rewards criminals are likely to gain from identity theft, other factors play a role in motivating individuals to engage in identity theft include drug abuse, lifestyle, addictive behavior, and the ease of committing the crime. Reducing the prevalence of identity theft requires increasing the penalty for the crime and closing the loopholes offenders exploit. Moreover, more studies should be conducted to enable a better understanding of the minds of people who commit identity theft (Newman and McNally 60).
Conclusions and Recommendations for Future Research
Identity theft is a highly prevalent crime that affect a significant proportion of the population, and it is costly in terms of both time and money, and most criminal justice system faces a challenge in detecting and prosecuting the crime. The best perspective that explains why people engage in identity theft is rational choice theory. According to this theory, people make a decision to take part in a crime after assessing the risks and rewards associated with the crime. If the reward outweigh the risks, then an individual is more likely to commit the crime, and vise verse. Apart from rewards and risks, criminals also assess the available opportunity. For example, a burglar is likely to break into a house that is unguarded because it present an easy opportunity. However, criminals are not completely rational because their rationality is bounded; meaning that they can never perceive all the factors associated with the crime. More research needs to be done in order to understand identity theft and implement measures to reduce it. The initial step is improving data collection. Currently, authority collect and store information on identity thefts in different databases, and this hinders the collection and sharing of data by different agencies.
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