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Identity theft (IT) has been a feature of financial markets for as long as alternatives have existed to cash transactions. But IT has recently occurred on a much larger scale. Data breaches often involve the apparent loss or acknowledged theft of the personal identifying info. of thousands -- or millions -- of people. IT poses risks, not only to individuals, but to the integrity & efficiency of the payment system -- the policies, procedures, & technology that transfer info. for authenticating & settling payments among participants. Either represents a loss of efficiency for the economy. This article looks at the nature of IT today & the factors driving its rapid growth. Also explores whether markets are able to limit the risks IT poses to the payment system. Graphs.