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TYPICAL IDENTITY FRAUD SCHEMES AND THEIR RED FLAGS

Identity fraud is inseparable from identity theft because without the second the first can not be perpetrated. Generally, the purpose of it is illegal financial gain, while terrorists and criminal groups do so to divert the attention of law enforcement authorities from the true perpetrators of crimes. Like a blessing gone awry, Internet and modern technology (without which life is seemingly impossible) come to the aid of identity fraudsters who make use of it with mind-numbing efficiency. It would appear that in 2002 losses due to identity fraud in Canada amounted to nearly $2.5 billion, as stated, in the Canada-United States Cross-Border Crime Forum held in October 2004 jointly by the United States Department of Justice (DOJ) and Public Safety Canada (PS).

There is no area in modern life over which the sinister shadows of identty threat and its scourge of a companion the identity  fraud is not looming. It is manifested in mail theft, stealing from residences and personal spaces, and the misuse of digital and personal datas in business transactions. Then, there is phishing, and theft from cmpany or government databases.

No standard  description fits the victims of identity theft, who come from every age group and all segments of society. Even then, the majority of victims appear in segments of the population with high or likely to be high credit ratings. After the identity theft, the victims suffer financial loss, damage to their credit rating and reputation as well as emotional distress. The legal tangle and the back-breaking task of clearing their name and credit rating is what most of them inherit.   The 2003 U.S. Federal Trade Commission identity theft survey report observed that victims had spent a total of 300 million hours in the preceding year to resolve problems created by such vermin. Although, no corresponding figure for Canada is available, it is a safe bet that it would also be in three-figure millions. Besides, there is a growing volume of data on the incidence of identity theft, but not much on statistical and analytical studies on the patterns of and on the psychological profiles of these types of criminal minds.

Where and how?

It is quite difficult to specify the areas where identity theft/fraud is likely or not likely to occur. Unlike certain crimes that are specific to particular types of property and locations, the likelihood of identity theft/fraud is everywhere. For instance, car thieves operate in parking lots, streets, garages, etc.,but very rarely from the roof of a 33-storey building containing heating, ventilating air-conditioning equipment. A temporary hand in the HVAV contracting firm can, however, steal electronic company and personnel data from the supervisor’s laptop for nefarious activities. Such people target residences, workplaces and places  of recreation considering them as their happy hunting grounds. In this, they are helped by almost the universal application of digital data, and of computers and devices that transmit or store such data, which means that identity fraudsters/thieves can apply their trade without ever coming near the individuals whose data they are stealing. The situation given above is not far-fetched as it would appear to be.

There was a temporary replacement worker assigned to the office of a national financial services company in Ontario who stole customer profiles from the company database. The company having thousands of profiles in the database just did not know that the thefts had taken place. Suddenly, a number of medical doctors found themselves as victims of identity theft in the form of false applications for credit being attributed to their name. The stolen profiles contained complete financial data on the doctors and their families.

The fraud source was discovered when an officer stopped a vehicle as part of a routine to find the passenger in possession of several profiles. Since no offence was being committed at the time, the officer was unable to effect an arrest. As the profiles did not appear to be stolen and no credit card data existed on the profile sheets, the officer had the presence of mind to have the documents photocopied and turned over to fraud investigators.

Then the source of the compromise came to light and the company admitted that they were indeed the source, resulting in charges against the employee.  Around 100 victims from across Canada were identified.  However, getting a complete list of victims was problematic because of the lack of correlation of victims’ names between the credit grantors, the credit bureaus, the police, the victims and the source company.

People engaged in doing their normal chores, like paying for their purchases by credit card, withdrawing money from a bank or submitting personal information to employers and various levels of government expose their personal data where identity thieves can access and use it without the victim’s knowledge or permission. The effects of the fraud would not possibly be known until weeks, months or even years later.

What to do?

While the authorities are doing what they have to do to fight the menace, certain simple protections can be taken by individuals for safety.

Documents like a birth certificate, Social Insurance Number card, bank account numbers and credit card details should be kept in a secure place.

Anyway, the purse or the wallet is not a fit storage for the above. If there is no shredder, tear into pieces all non-essential financial statements like credit card details.

Don’t reply to e–mails asking for bank account number, passwords and such things.

The Red Flags! (by no means exhaustive)

  • Though addressed to someone else, tax statements or bills are unexpectedly mailed to you.
  • A caller from nowhere enquires about a new mortgage that has already been arranged for your property.
  • Bills arrive not in time.
  • Lenders contact you regarding purchases you did not make.
  • Bank or credit card statements are puzzling.

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