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The Impostor Rule and Identity Theft in America

Published online by Cambridge University Press:  06 March 2017

Jennifer Trost
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Abstract

Impersonation and then identity theft in America emerged in the legal space between a civil system with a high tolerance for market risk and losses incurred by impostors, and a later-developing criminal system preoccupied with fraud or forgery against the government. Negotiable instruments, generally paper checks, borrowed from seventeenth-century England, enabled a geographically far-flung commercial system of paper-based but impersonal exchanges at a time before widespread availability of centrally-issued currency or regulated banks. By assigning loss rather than catching criminals, the “impostor rule” made and continues to make transactions with negotiable instruments valid even if fraudulent. This large body of commercial law has stood essentially unchanged for three hundred years and has facilitated a system rife with impersonation which criminal and federal laws did not address until the late 20th century. English common law, American legal treatises, court cases, law review articles, and internal debates behind the Uniform Commercial Code tell the story of a legal system at the service of commerce through the unimpeded transfer of paper payments. Combining the fields of legal history and criminal justice with the approaches of emerging research in both identification and paperwork studies, this article explains the ongoing policy problems of identity theft.

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Articles
Information
Law and History Review , Volume 35 , Issue 2 , May 2017 , pp. 433 - 459
Copyright
Copyright © the American Society for Legal History, Inc. 2017 

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Footnotes

Funding to support this research came from the University of Wisconsin-La Crosse Faculty Research Grant. The author thanks the History Authors Writing Group and anonymous reviewers who provided valuable feedback.

References

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2. The Secret Service began as the law enforcement arm of the Department of the Treasury in 1865 or thereabouts, originally to combat counterfeiting and protect the national currency. Its responsibility for presidential security began at the end of the nineteenth century. Its role has since developed to protect critical national infrastructure, including the payment and financial systems, and its Financial Crimes Task Forces assist with investigations into the growing problem of income tax return fraud. Mihm, Stephen, A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States (Cambridge, MA: Harvard University Press, 2007), 340–58Google Scholar.

3. State Security v. American General.

4. This simple definition of negotiable instruments will be explained more extensively later in the article.

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18. Although it was originally encoded in 1896, the Uniform Law Commission says that the NIL has stood the test of time and its only major revision did not happen until 1990. Uniform Law Commission, “UCC Article 3, Negotiable Instruments (1990) Summary,” Article 3, Negotiable Instruments (1990). http://uniformlaws.org/ActSummary.aspx?title=UCC (accessed on November 1, 2015).

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25. Balleisen, Navigating Failure, 19–21; and Mann, Republic of Debtors, 255.

26. Levy, Freaks of Fortune, 14–15, 265.

27. Balleisen, Navigating Failure, 170.

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29. Rogers, End of Negotiable Instruments, 39–44.

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42. American Law Institute (ALI), “Creation,” https://www.ali.org/about-ali/creation/ (accessed on November 1, 2015); and Braucher, “Legislative History,” 799–801.

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50. ALI/NCCUSL, “Minutes of the joint editorial board meeting, May 20, 1950, Box 106L.”

51. “Comments” on Article 4 Bank Deposits and Collections, 1955(?), Box 50M.

52. “Meeting Minutes of Enlarged Editorial Board,” 1951, Box 109L.

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56. Public Law 97–398 – December 31, 1982, codified at 18 United States Code §1028.

57. Another related body of law is the common law tort of privacy or the appropriation of identity. Also called the common law misappropriation of likeness, it protects the economic rights to one's own name or likeness, such as in cases of celebrities. In these cases, both parties are known to each other unlike in impostor cases. See Kahn, Jonathan, “What's in a Name? Law's Identity Under the Tort of Appropriation,” Temple Law Review 74 (2001): 263–65Google Scholar; and Kahn, Jonathan, “Enslaving the Image: The Origins of the Tort of Appropriation of Identity Reconsidered,” Legal Theory 2 (1996): 301–24Google Scholar.

58. Committee on the Judiciary, Senate Report 105–274—105th Congress, 2d Session, “The Identity Theft and Assumption Deterrence Act,” July 1998, 4, 6, 7.

59. Public Law 105–318c- October 30, 1998, codified at 18 United States Code §1028; 18 United States Code §1028(a)(7).

60. I am not interested in criminal violations of the United States Code Chapter 43 on False Personation (of public officers) or criminal record identity theft, but other scholars are. See Hurl-Eamon, Jennine, “The Westminster Impostors: Impersonating Law Enforcement in Early Eighteenth-Century London,” Eighteenth-Century Studies 38 (2005): 461–83Google Scholar; and Perl, Michael W., “It's Not Always About the Money: Why the State Identity Theft Laws Fail to Adequately Address Criminal Record Identity Theft,” Journal of Criminal Law and Criminology 94 (2003): 169–208 CrossRefGoogle Scholar.

61. Public Law 108–159, § 111(q)(3), 117 State. 1952, 1954 (2003).

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63. Federal Trade Commission, “Consumer Sentinel Network Data Book for January-December 2008,” February 2009, 3–5; Federal Trade Commission, “Consumer Sentinel Network Data Book for January–December 2014,” February 2015, 3–5. Individuals are generally not liable for losses or unauthorized charges when they become victims of identity theft or fraud. Nevertheless, the unsuspecting still have to repair their reputations or credit records and stay vigilant.

64. Brian Krebs, “Firms Could Be Forced to Disgorge Profits from Tax Refund Fraud,” Krebs on Security, 2009 http://krebsonsecurity.com/2015/06/firms-could-be-forced-to-disgorge-profits-from-tax-refund-fraud/ (accessed on November 1, 2015).

65. Heith Copes and Lynne Vieraitis, “The Risks, Rewards and Strategies of Stealing Identities,” in McNally and Newman, Perspectives on Identity Theft, 93–96.

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