July 16, 2004 -- President Bush signed legislation on Thursday that prescribes serious penalties for identity theft, a problem that he said cost U.S. consumers and businesses more than $50 billion in 2003.

The law, named the Identity Theft Penalty Enhancement Act, expands the maximum penalty for identity theft under federal law from three to five years in prison.

Additionally, it creates a new offense called "aggravated identity theft," which is a charge on top of any crime that the stolen identity is used to commit, such as terrorist acts, mail fraud or stealing a visa or passport.

Bush said the law "sends a clear message that a person who violates another's financial privacy will be punished."

The Federal Trade Commission received more than half a million consumer complaints in 2003, up from roughly 400,000 in 2002. About 40 percent of these complaints were about identity theft each year.

Legislation was needed as online commerce has grown at a furious pace. Forrester Research forecasts online retail sales to grow to $144 billion in 2004, a 27 percent leap from 2003. What this means is that more and more people will be sharing their personal financial information over the Internet.

"The crime of identity theft undermines the basic trust on which our economy depends," said the president. "When a person takes out an insurance policy, or makes an online purchase, or opens a savings account, he or she must have confidence that personal information will be protected and treated with care."