Identity theft is a relatively new crime, and governments around the world are slowly bringing in a number of laws that can deal specifically with this type of fraudulent activity. The US is the most advanced country in dealing with identity criminals and the Identity Theft and Assumption Deterrence Act was passed by Congress in 1998, and makes it a federal felony for anyone to use another person’s personal identity to commit any unlawful activities. The US Department of Justice prosecute those accused of these crimes and in most cases a full conviction will carry a maximum penalty of 15 years imprisonment. There are also many different State laws concerning identity theft, and so you should contact your local State Department for more details of these.
In the UK there are not yet any specific laws relating to identity theft, but criminals can be charged with this type of crime under the Fraud Act 2006, which carries maximum penalties of 10 years imprisonment and/or a fine. The UK government is looking into ways to help protect citizens against identity theft into the future and The City of London Police are taking a lead role in investigating serious identity fraud crimes, and are working with the Home Office to set up a National Fraud Reporting Centre that would be designed to centralise the law enforcement effort to deter and detect identity crimes and other frauds.
The main problem in both the US and the UK is that it is very difficult and time consuming for law enforcement agencies to investigate every single instance of identity theft crime, and they simply do not have the resources to fully prosecute every identity theft criminal they detain. Therefore law enforcement agencies normally only target cases where there is an extensive fraud ring at work, or the individual sums of money involved are very high.