And the challenge comes with significant costs: Not only must agencies like the Secret Service upgrade their systems to keep up with rapidly changing technologies, their staffs must be well versed in the techniques and lingo of the cyber world.
"Today," says Townsend, "all new recruits get a badge, a gun and a laptop."
But while there is a heightened awareness among lawmakers that something must be done, so far, little of substance has been accomplished.
Congress passed a bill last year that would have restricted the sale of personal information including Social Security numbers, credit information and other data. But President Clinton refused to sign the measure because he said it wasn't strong enough.
This year, two identity-theft bills have been introduced in the Senate, but political pressure from the credit industry makes it doubtful that any bill restricting the sale of personal information will become law.
All three national credit bureaus have come out strongly against any legislation that will hamper their efforts to sell consumers' personal information — a key source of their revenue.
Crime, Made Easy
But while it's proving difficult to find a legislative cure for identity theft, the crime is remarkably easy to perpetrate.
"It's incredibly easy," says Vranesevich. "Even the most novice user can get online and with a little bit of teaching could [commit identity theft] in an hour."
All that is required is a Social Security number and the name, address and phone number of its rightful owner, says Betsy Broder of the FTC. In many cases, this information can be readily found online via various data services like US SEARCH or Net Detective, or even offline with the phone book.
Armed with such information, an identity thief can open a bank account, take out a loan or order credit cards — all of which can now be done from the anonymity of a personal computer.
Compounding the ease of the theft is growing demand for the stolen data: There is a vast virtual black market on the Web, using tools like Internet Relay Chat (IRC) and Instant Messenger (IM), where individuals buy and sell stolen credit card and Social Security numbers with the same ease they might hawk Pez Dispensers on eBay.
And since the Internet is a global phenomenon, the traffic in stolen identity flows effortlessly across borders.
"Today a hacker in Moscow can break into a system in Singapore, steal credit card numbers and transfer them via the Internet to a co-conspirator in Buenos Aires, where merchandise will be purchased that is transshipped and sold on the streets of Miami," says Townsend.
And the crimes are committed in the blink of an eye. "The time it took for me to describe that to you," he notes, "is just about how quickly a transaction like this could have been completed."
Townsend says the current identity theft hot spots are Eastern Europe and Southeast Asia — where the level of education and technical sophistication is high, and where tracking down and prosecuting criminals can be very tricky.
Not everyone agrees on how the problems associated with identity theft can be resolved. But most seem to agree that things could improve dramatically if we ceased using Social Security numbers as the primary means of identifying consumers.