Identity Theft

Crime Stoppers of Northwestern Ontario very strongly encourages citizens to learn about the risks of identity theft and how to protect themselves against the full array of financial crimes and frauds.

The United States Department of Justice explains, “Identity theft and identity fraud are terms used to refer to all types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain.”

Officials detail (2004), “Unlike your fingerprints, which are unique to you and cannot be given to someone else for their use, your personal data–especially your Social Security number, your bank accounts or credit card numbers, your telephone calling card number, and other valuable identifying data–can be used, if they fall into the wrong hands, to personally profit at your expense.”

Identity theft is by no means a new phenomenon. Cassius Dio(Gleason, 2011)reports cases of identity theft, impersonation and usurpation in his contemporary histories of ancient Rome; and Shakespeare writes in Othello (iii, 3)”He that filches from me my good name/Robs me of that which not enriches him/And makes me poor indeed.” With his usual command of multiple meanings, Shakespeare literally describes fraud, but he also alludes to the worst consequence of identity theft – loss of reputation and standing in the community. In some cases, victims of identity theft have spent years rehabilitating their good names and restoring their credit rating. Until the late 20th century, identity theft and impersonation remained primarily the province of literature, except when desperate fugitives used their aliases and went underground to elude authorities. In the 21^st century, however, huge cases of data theft and purloined credit information regularly make headlines.

Growth of information technology has made it much easier for identity thieves to gather information and evade detection.

In possession of just one piece of your personal data, a skilled identity thief can recover just about everything about you and can use it to loot your bank accounts, run-up your credit card balances, or open all kinds of new accounts and lines of credit in your name.

Technology and tactics outpace laws and detection.

In 2001, three full years after Congress enacted its groundbreaking “Identity Theft and Assumption Deterrence Act”. Deputy Attorney General, Larry Thompson, told reporters gathered for his announcement of the FBI’s first major operation against Internet fraud: “Internet crimes are growing at an unprecedented rate that exceeds all other types of white collar fraud,” adding, “The Federal Trade Commission has received identity theft claims at the most rapid pace in its history” (Crime Control Digest; May 25, 2001; vol. 35, no. 21, 431). Despite federal and state laws providing harsh penalties for identity theft and fraud, and despite investigators’ increasing sophistication, the pace of identity crimes continued unabated for more than a decade. In its recently released report, 2012 Identity Fraud Industry Report: Social Media and Mobile Forming the New Fraud Frontier,”(2013) Javelin Strategy and Research four highlights four disturbing trends:

Identity fraud incidents increased, amount stolen remained steady – For the tenth straight year, the number of identity thefts increased, rising 13 percent. However, because of improved prevention and detection tools, consumers’ out-of-pocket costs have decreased by 44 percent since 2004. Researchers caution, however, that the substantial decrease in consumer losses derives almost as much from consumer protection laws that hold account holders and credit card users blameless for fraudulent activity; businesses, especially large retailers, frequently absorb the losses.
Social behaviors put consumers at risk – Javelin reports, “Despite warnings that social networks are a great resource for fraudsters, consumers are still sharing a significant amount of personal information frequently used to authenticate a consumer’s identity.” Investigators found, not surprisingly, Facebook and Twitter users with profiles visible to everyone were substantially more likely to expose vital personal information than their more cautious fellow users. Javelin specified, “Sixty-eight percent of people with public social media profiles shared their birthday information (with 45 percent sharing month, date and year); 63 percent shared their high school name; 18 percent shared their phone number; and 12 percent shared their pet’s name – all are prime examples of personal information a company would use to verify your identity.” Note that a pet’s name often provides the answer to security questions used to protect online bank and credit card accounts.
Smartphone owners experience greater incidence of fraud – Although the Javelin group found that only seven percent of smartphone users fell victim to identity theft or fraud, nevertheless that figure is 33 percent higher than the rate among the general public. Reluctant to blame the victims for the crimes, Javelin reporters nevertheless noted that most smartphone users do not take advantage of security features built into their phones. “Thirty-two percent of smartphone owners do not update to a new operating system when it becomes available,” they said, and “Sixty-two percent do not use a password on their home screens – enabling anyone to access their information if the phone is lost; and 32 percent save login information on their device.”
Data Breaches increasing and more damaging – Well-publicized data breaches, more commonly known as “hacks,” contributed to spikes in identity theft and fraud. Javelin Strategy & Research determined that “victims of data breaches are 9.5 times more likely to be a victim of identity fraud than consumers who did not receive such a data breach letter.”

Peter Graboski (2001,431) explains why law enforcement officials and prosecutors cannot keep pace with identity theft and those thieves who appear to be building criminal alliances online.

“Digital technology creates new opportunities for theft, and criminal law has been slow to respond… Prosecutions are cumbersome, costly, and produce uncertain results. Victims are thus often deterred from initiating prosecution, or even reporting the crime. Cybercrime, as the act of stealing identities is often referred, presents further challenges. Technology often changes too rapidly for effective legislation. Cybercrimes often cross many jurisdictions and nations; the evidence is complicated and highly technical; and development of the necessary forensic tools is costly.”

Therefore, Grabosky joins the majority of experts who suggest that consumer vigilance stands out as the best defense against identity theft and fraud.

Effective Identity Theft Prevention Practices

On the basis of his exhaustive analysis of crime data, Chad Albrecht (2011) established “the identity theft cycle” and “provides evidence to suggest that if identity theft is detected early, would-be victims of identity theft can protect themselves from the vast and difficult consequences.”

Albrecht summarizes, “Research has suggested that victims of identity theft spend an average of $1,500 in out-of-pocket expenses and an average of 175 hours per incident of identity theft fraud in order to resolve the many problems caused by identity thieves.

The United States Federal Trade Commission has labeled identity theft as the most common type of consumer fraud, affecting thousands of people everyday. In fact, approximately 40 percent of the frauds reported to the United States Federal Trade Commission over the last few years has involved some type of identity theft. Furthermore, research has suggested that victims of identity theft suffer both psychological and physical distresses.” His research indicated that skilled, experienced identity thieves proceed cautiously and test stolen data for accuracy before they undertake major thefts or frauds. Therefore, scrupulous consumers, acting in concert with their banks and financial services providers, can detect and thwart identity theft before it takes an extortionate toll.

Albrecht recommends ten significant actions to guard against identity theft and fraud:

Guard mail from theft. Invest in a secure outdoor mailbox – one that allows the mail carrier to deposit mail without opening the box, and one that allows only you to retrieve the box’s contents. When you travel on business or go on vacation, have the postal service hold your personal mail.
Opt out of pre-approved credit cards. According to Albrecht, “One of the most common and easiest ways for a perpetrator to commit identity theft is to simply fill out the pre-approved credit card applications consumers receive via the mail and send them in.” Perpetrators often open a victims’ mailboxes and steal pre-approved credit card applications before victims know they arrived. In the United States, you may opt-out of all pre-approved offers by calling 1-888-5-OPTOUT (1-888-567-8688); representatives will remove your information from all direct marketing lists.
Check your credit report at least once each year. The Fair Credit Reporting Act (FCRA) requires Equifax, Experian, and TransUnion, the major credit reporting bureaus, to provide consumers with a free copy of their credit report, at the consumer’s request, once every 12 months. Your credit report may give the first signals that someone is taking money from your accounts or making unauthorized charges on existing or new card accounts.
Guard your social security card and numbers. Your social security number is “the golden key” that unlocks all of your identity and financial information. You seldom have occasion to use the card itself, so store it in your safe or safe deposit box. Disclose the nine precious digits only to reliable people for legitimate business purposes.
Safeguard all personal information. Albrecht advises, “Safeguarding personal information is very important for every individual. Consumers who have roommates, employ outside help to clean or perform other domestic services, or have outside people in their house for any reason need to be particularly careful or risk falling victim to identity theft.”
Guard trash from theft. Disgusting as it seems, the majority of identity thefts still originate in pilferage from trash, and determined thieves will dig through all kinds of waste to find valuable words and digits. Invest in a heavy duty shredder and shred any and every document that contains even a hint of personal or financial data. Take advantage of online bill-paying and account management services, minimizing the pieces of sensitive mail you physically receive.
Protect your wallet and other valuables. Most people over-stuff their wallets and act pretty cavalier about how they carry them. Albrecht and others urge you to carry only your identification and the credit or debit cards you use every day, keeping careful track of where and how you carry your wallet or purse. As you use your cards or write checks, guard the printed information and account numbers. Store your bank’s “fraud alert” number in your cell phone and keep a copy of them somewhere in your home.
Protect passwords. Albrecht reminds, “Individuals should use passwords on credit card, bank, and telephone accounts that are not easily determinable or available. Consumers should avoid using information that can be easily associated with them, such as their birthday, their mother’s maiden name, their spouse’s name, the last four digits of their telephone number, a series of consecutive numbers such as 1-2-3-4, or anything else that is predictable.”
Protect your home. Police report that increasing numbers of burglaries do not include property theft; instead, they focus entirely on collection of personal data, and many victims will not see signs of robbery until several weeks after the crimes have occurred. The more assets and accounts you control, the more you need to install a home security system; and, regardless of your net worth, you should store all your important documents and vital information in a safe or safety deposit box.
Protect your computer. Because legitimate Internet businesses respect customers’ privacy, they never ask for personal information via e-mail. Albrecht stresses, “If consumers get an e-mail or pop-up message that asks for personal or financial information, they should not reply or click on the link in the message.” If you must send personal data via the Internet, send only via your vendor’s or service provider’s encrypted website.

If you are a victim of identity theft, immediately report the crime to your bank and creditors. You will not be held liable for fraudulent charges, and quick reporting gives your bank’s and creditors’ investigators a timely start in tracking down the thieves. Just as importantly, report the crime to police who have assigned extra high priority to investigation of financial crimes. If you have first-hand knowledge of identity theft crimes in progress, report the information to Crime Stoppers of Northwestern Ontario. Crime Stoppers assures both your anonymity and prompt reporting to law enforcement.