Final answer:
The hospital employee's use of patients' financial information for unauthorized purchases is an example of identity theft, a crime where a person's personal identification is wrongfully used without permission.
Step-by-step explanation:
An employee of Mercy Hospital's billing department used the financial information of 100 patients to purchase jewelry from online commercial sites. This is identity theft. Identity theft, sometimes referred to as "True-name Fraud," occurs when someone wrongfully acquires and uses a consumer's personal identification, credit, or account information without their permission. The illegally acquired information, such as a social security number, pin number, or password, is then used to commit fraud and can result in financial loss and personal distress for the victims. In the scenario described, the hospital employee has fraudulently assumed the patients' identities to make unauthorized purchases, which squarely falls under the definition of identity theft.