Identity theft in the US has leapt by 79 per cent over the last year, with only a one in 700 chance of thieves being caught, industry watchers have warned.

According to analyst firm Gartner, seven million American adults - 3.4 per cent of all US consumers - were victims of identity theft during the 12 months ending June 2003.

"Identity theft is not necessarily a high-tech crime, and can just as easily damage the credit reputations of low-tech adults who don't spend any time on the internet," said Avivah Litan, vice president and research director for Gartner.

"More than half of all identity theft - where the method of theft is documented - is committed by criminals that have established relationships with their victims, such as family members, room mates, neighbours, or co-workers."

An identity thief takes over a consumer's entire identity by stealing critical private information, such as their Social Security number, driver's licence number, address, credit card number or bank account number.

The thief can then use the stolen information to illegally obtain loans or credit lines to buy goods and services under the stolen name. Identity thieves typically change the consumer's mailing address to hide their activities.

"Many banks, credit card issuers, cell phone service providers and other enterprises that extend financial credit to consumers don't recognise most identity theft fraud for what it is," Litan said.

"Instead they mistakenly write it off as credit losses, causing a serious disconnect between the magnitude of identity theft that innocent consumers experience and the industry's proper recognition of the crime.

"This causes a disincentive to fix the problem with the urgency it requires."