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Identity theft

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Identity theft is a term used to refer to fraud that involves stealing money or getting other benefits by pretending to be someone else. The term is relatively new and is actually a misnomer, since it is not inherently possible to steal an identity, only to use it. The person whose identity is used can suffer various consequences when they are held responsible for the perpetrator's actions. In many countries specific laws make the use of another person's identity for personal gain a crime.

Types

According to the non-profit Identity Theft Resource Center[1], identity theft is sub-divided into four categories:

  • financial identity theft (using another's identity to obtain goods and services)
  • criminal identity theft (posing as another when apprehended for a crime)
  • identity cloning (using another's information to assume his or her identity in daily life)
  • business/commercial identity theft (using another's business name to obtain credit)

Identity theft may be used to facilitate crimes including illegal immigration, terrorism, and espionage. Identity theft may also be a means of blackmail. There are also cases of identity cloning to attack payment systems, including medical insurance[2].

Some individuals may impersonate others for non-financial reasons - for instance, to receive praise or attention for the victim's achievements. This is sometimes referred to as identity theft in the media.[3]

Elaboration

Financial identity theft

A classic example of credit-dependent financial crime (bank fraud) occurs when a criminal obtains a loan from a financial institution by impersonating someone else. The criminal pretends to be the victim by presenting an accurate name, address, birth date, or other information that the lender requires as a means of establishing identity. Even if this information is checked against the data at a national credit-rating service, the lender will encounter no concerns, as all of the victim's information matches the records. The lender has no easy way to discover that the person is pretending to be the victim, especially if an original, government-issued id can't be verified (as is the case in online, mail, telephone, and fax-based transactions). This kind of crime is considered non-self-revealing, although authorities may be able to track down the criminal if the funds for the loan were mailed to them. The criminal keeps the money from the loan, the financial institution is never repaid, and the victim is wrongly blamed for defaulting on a loan s/he never authorized.

In most cases the financial identity theft will be reported to the national Consumer credit reporting agency or Credit bureaus(US) as a collection or bad loan under the impersonated person's record. This person may discover the incident by being denied a loan, by seeing the accounts or complaints when they view their own credit history, or by being contacted by creditors or collection agencies. The person's credit score, which affects one's ability to acquire new loans or credit lines, will be adversely affected until they are able to successfully dispute the complaints and have them removed from their record.

Other forms of examples of bank fraud associated with identity theft include "account takeovers," passing bad checks, and "busting out" a checking or credit account with bad check, counterfeit money order, or empty ATM envelope deposits. If withdrawals or checks are made against the impersonated person's real accounts, that person may need to convince the bank that the withdrawal was fraudulent or file a court case in order to retrieve lost funds. If checks are written against fraudulently opened checking accounts, then the person receiving the checks will suffer the financial loss, however they might try to retrieve money from the impersonated person by using a collection agency which would appear in the person's credit history until they can show that it was fraud.

Identity cloning and concealment

In this situation, a criminal acquires personal identifiers, and then impersonates someone for concealment from authorities. This may be done by a person who wants to avoid arrest for crimes, by a person who is working illegally in a foreign country, or by a person who is hiding from creditors or other individuals. Unlike credit-dependent financial crimes, these issues can be non self-revealing, continuing for an indeterminate amount of time without being detected. The criminal might attempt to obtained fraudulent documents or IDs consistent with the cloned identity to make the impersonation more convincing.

Criminal identity theft

When a criminal identifies himself to police as another individual it is sometimes referred to as "Criminal Identity Theft." In some cases the criminal will obtain a state issued ID using stolen documents or personal information belonging to another person, or they might simply use a fake ID. When the criminal is arrested for a crime, they present the ID to authorities, who place charges under the identity theft victim's name and release the criminal. When the criminal fails to appear for his court hearing, a warrant would be issued under the assumed name. The victim might learn of the incident if the state suspends their own drivers license, or through a background check performed for employment or other purposes, or in rare cases could be arrested when stopped for a minor traffic violation.

It can be difficult for a criminal identity theft victim to clear their record. The steps required to clear the victim's incorrect criminal record depend on what jurisdiction the crime occurred in and whether the true identity of the criminal can be determined. The victim might need to locate the original arresting officers, or be fingerprinted to prove their own identity, and may need to go to a court hearing to be cleared of the charges. Obtaining an expungement of court records may also be required. Authorities might permanently maintain the victim's name as an alias for the criminal's true identity in their criminal records databases. One problem that victims of criminal identity theft may encounter is that various data aggregators might still have the incorrect criminal records in their databases even after court and police records are corrected. Thus it is possible that a future background check will return the incorrect criminal records.[4]

Techniques for obtaining personal information

In most cases, a criminal needs to obtain personally identifiable information or documents about an individual in order to impersonate them. They may do this by:

  • Stealing mail or rummaging through rubbish (dumpster diving)
  • Retrieving information from redundant equipment which has been disposed of carelessly, e.g. at public dump sites, given away without proper sanitizing etc.
  • Researching about the victim in government registers, internet search engines, or public records search services.
  • Stealing payment or identification cards, either by pickpocketing or surreptitiously by skimming through a compromised card reader
  • Remotely reading information from an RFID chip on a smart card, RFID-enabled credit card, or passport
  • Eavesdropping on public transactions to obtain personal data (shoulder surfing)
  • Stealing personal information in computer databases (Trojan horses, hacking)
  • Advertising bogus job offers (either full-time or work from home based) to which the victims will reply with their full name, address, curriculum vitae, telephone numbers, and banking details
  • Infiltration of organizations that store large amounts of personal information
  • Impersonating a trusted organization in an electronic communication (phishing)
  • Obtaining castings of fingers for falsifying fingerprint identification.
  • Browsing social network (MySpace, Facebook, Bebo etc) sites, online for personal details that have been posted by users

Individual identity protection

The acquisition of personal identifiers is made possible through serious breaches of privacy. For consumers, this is usually due to personal naiveté about who they provide their information to. In some cases the criminal obtains documents or personal identifiers through physical theft (e.g. vehicle break-ins and home invasions). Guardianship of personal identifiers by consumers is the most common intervention strategy recommended by the US Federal Trade Commission, Canadian Phone Busters and most sites that address identity theft. Personal guardianship issues include recommendations on what consumers may do to prevent their information getting into the wrong hands.

The strongest protection against identity theft is not to identify at all - thereby ensuring that information cannot be reused to impersonate an individual elsewhere. As such, identify theft is often a question of too little privacy or too much identification. Many activities and organizations in a modern society require people to provide personal identifiers (Social Security number, national identification number, drivers license number, credit card number, etc), and in some cases the knowledge of personal identifiers is treated as proof of identity. This is sometimes done as a convenience or to enable transactions by telephone or the internet, however it can also make it more difficult for individuals to protect themselves from identity theft.

In some cases an identity thief will attempt to impersonate a deceased individual. Frequently credit checks or other types of verification are not cross referenced with death certificates, so the crime may go unchecked for some time unless the deceased's family detects it and takes steps to prevent further fraud.[5]

Identity protection by organizations

In their May 1998 testimony before the United States Senate, the Federal Trade Commission (FTC) discussed the sale of Social Security numbers and other personal identifiers by credit-raters and data miners. The FTC agreed to the industry's self-regulating principles restricting access to information on credit reports.[6] According to the industry, the restrictions vary according to the category of customer. Credit-rating services gather and disclosure personal and credit information to a wide business client base.

Poor stewardship of personal data by organizations, resulting in unauthorized access to sensitive data, can expose individuals to the risk of identity theft. The Privacy Rights Clearinghouse has documented over 900 individual data breaches by US companies and government agencies since January 2005, which together have involved over 200 million total records containing sensitive personal information, many containing social security numbers.[7] Poor corporate diligence standards which can result in data breaches include:

  • failure to shred confidential information before throwing it into dumpsters
  • failure to ensure adequate network security
  • the theft of laptop computers or portable media being carried off-site containing vast amounts of personal information. The use of strong encryption on these devices can reduce the chance of data being misused should a criminal obtain them.
  • the brokerage of personal information to other businesses without ensuring that the purchaser maintains adequate security controls
  • Failure of governments, when registering sole proprietorships, partnerships, and corporations, to determine if the officers listed in the Articles of Incorporation are who they say they are. This potentially allows criminals access to personal information through credit-rating and data mining services.

The failure of corporate or government organizations to protect consumer privacy, client confidentiality and political privacy has been criticized for facilitating the acquisition of personal identifiers by criminals.[8]

Using various types of biometric information, such as fingerprints, for identification and authentication has been cited as a way to thwart identity thieves, however there are technological limitations and privacy concerns associated with these methods as well.

Australia

In Australia, each state has enacted laws that dealt with different aspects of identity or fraud issues.

On the Commonwealth level, under the Criminal Code Amendment (Theft, Fraud, Bribery & Related Offences) Act 2000 which amended certain provisions within the Criminal Code Act 1995,

135.1 General dishonesty

(3) A person is guilty of an offence if: a) the person does anything with the intention of dishonestly causing a loss to another person; and b) the other person is a Commonwealth entity.

Penalty: Imprisonment for 5 years.

Likewise, each state has enacted their own privacy laws to prevent misuse of personal information and data. Federal Privacy Act is applicable only to Commonwealth and ACT government agencies.

Canada

Under the section 403 of the Criminal Code of Canada,

Every one who fraudulently personates any person, living or dead,

(a) with intent to gain advantage for himself or another person, (b) with intent to obtain any property or an interest in any property, or (c) with intent to cause disadvantage to the person whom he personates or another person,

is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years or an offence punishable on summary conviction. [9]

In Canada, Privacy Act (federal legislation) covers only federal government, agencies and crown corporations. Each province and territory has its own privacy law and privacy commissioners to limit the storage and use of personal data.

France

In France, a person convicted of identity theft can be sentenced up to five years in prison and fined up to €75,000.[1]

Hong Kong

Under HK Laws. Chap 210 Theft Ordinance, sec. 16A Fraud

(1) If any person by any deceit (whether or not the deceit is the sole or main inducement) and with intent to defraud induces another person to commit an act or make an omission, which results either-

(a) in benefit to any person other than the second-mentioned person; or (b) in prejudice or a substantial risk of prejudice to any person other than the first-mentioned person,

the first-mentioned person commits the offense of fraud and is liable on conviction upon indictment to imprisonment for 14 years.

Under the Personal Data (Privacy) Ordinance, it established the post of Privacy Commissioner for Personal Data and mandate how much personal information one can collect, retain and destruction. This legislation also provides citizens the right to request information held by businesses and government to the extent provided by this law.

United Kingdom

In the United Kingdom personal data is protected by the Data Protection Act. The Act covers all personal data which an organization may hold, including names, birthday and anniversary dates, addresses, telephone numbers, etc.

Under English law (which extends to Wales but not necessarily to Northern Ireland or Scotland), the deception offences under the Theft Act 1968 increasingly contend with identity theft situations. In R v Seward (2005) EWCA Crim 1941[10] the defendant was acting as the "front man" in the use of stolen credit cards and other documents to obtain goods. He obtained goods to the value of £10,000 for others who are unlikely ever to be identified. The Court of Appeal considered sentencing policy for deception offenses involving "identity theft" and concluded that a prison sentence was required. Henriques J. said at para 14:"Identity fraud is a particularly pernicious and prevalent form of dishonesty calling for, in our judgment, deterrent sentences."

Increasingly, organizations, including Government bodies will be forced to take steps to better protect their users' data[11].

United States

The increase in crimes of identity theft lead to the drafting of the Identity Theft and Assumption Deterrence Act.[12] In 1998, The Federal Trade Commission appeared before the United States Senate.[13] The FTC discussed crimes which exploit consumer credit to commit loan fraud, mortgage fraud, lines-of-credit fraud, credit card fraud, commodities and services frauds. The Identity Theft and Assumption Deterrence Act (2003)[ITADA] amended U.S. Code Title 18, § 1028 ("Fraud related to activity in connection with identification documents, authentication features, and information"). The statute now makes the possession of any "means of identification" to "knowingly transfer, possess, or use without lawful authority" a federal crime, alongside unlawful possession of identification documents. However, for federal jurisdiction to prosecute, the crime must include an "identification document" that either: (a) is purportedly issued by the United States, (b) is used or intended to defraud the United States, (c) is sent through the mail, or (d) is used in a manner that affects interstate or foreign commerce. See 18 U.S.C. § 1028(c). Punishment can be up to 5, 15, 20, or 30 years in federal prison, plus fines, depending on the underlying crime per 18 U.S.C. § 1028(b). In addition, punishments for the unlawful use of a "means of identification" were strengthened in § 1028A ("Aggravated Identity Theft"), allowing for a consecutive sentence under specific enumerated felony violations as defined in § 1028A(c)(1) through (11).

The Act also provides the Federal Trade Commission with authority to track the number of incidents and the dollar value of losses. There figures relate mainly to consumer financial crimes and not the broader range of all identification-based crimes.[14]

If charges are brought by state or local law enforcement agencies, different penalties apply depending on the state.

Six Federal agencies conducted a joint task force to increase the ability to detect identity theft. Their joint recommendation is a set of requirements on financial institutions and other entities which furnish credit data to credit reporting services to develop written plans for detecting identity theft. These plans must be adopted by each organization's Board of Directors and monitored by senior executives.[15]

Spread and impact

Surveys in the USA from 2003 to 2006 showed a decrease in the total number of victims but an increase in the total value of identity fraud to US$56.6 billion in 2006. The average fraud per person rose from $5,249 in 2003 to $6,383 in 2006.[16]

The 2003 survey from the Identity Theft Resource Center found that :

  • Only 15% of victims find out about the theft through proactive action taken by a business
  • The average time spent by victims resolving the problem is about 40 hours
  • 73% of respondents indicated the crime involved the thief acquiring a credit card
  • The emotional impact is similar to that of victims of violent crimes

In a widely publicized account,[17] Michelle Brown, a victim of identity fraud, testified before a U.S. Senate Committee Hearing on Identity Theft. Ms. Brown testified that: "over a year and a half from January 1998 through July 1999, one individual impersonated me to procure over $50,000 in goods and services. Not only did she damage my credit, but she escalated her crimes to a level that I never truly expected: she engaged in drug trafficking. The crime resulted in my erroneous arrest record, a warrant out for my arrest, and eventually, a prison record when she was booked under my name as an inmate in the Chicago Federal Prison."

In Australia, identity theft was estimated to be worth between AUS$1billion and AUS$4 billion per annum in 2001.[18]

In the United Kingdom the Home Office reported that identity fraud costs the UK economy £1.7 billion[19] although privacy groups object to the validity of these numbers, arguing that they are being used by the government to push for introduction of national ID cards. Confusion over exactly what constitutes identity theft has led to claims that statistics may be exaggerated.[20]

Cultural references

The public fascination with impostors has long had an effect on popular culture and extends to modern literature.

  • The story of Michelle Brown has been made into a film.[21]
  • In Frederick Forsyth's novel The Day of the Jackal the would-be assassin of General de Gaulle steals three identities. Firstly, he assumes the identity of a dead child by obtaining the child's birth certificate and using it to apply for a passport. He also steals the passports of a Danish clergyman and an American tourist, and disguises himself as each of those persons in turn.
  • In the 1995 movie The Net, Sandra Bullock plays a computer consultant whose life is taken over with the help of computer assisted identity theft.
  • In Jonathan Smith's novel Night Windows the action is based on the horrific and real life theft of Smith's own identity.
  • In the webcomic Kevin and Kell the character Danielle Kindle dies and is later "replaced" by a double from a parallel world. After an attempt at taking over her predecessor's identity, Danielle Kendall confesses her true nature and gets accepted by the predecessor's family - if not by all the readers.
  • T. Coraghessan Boyle's 2006 novel Talk Talk describes the theft of Dana Halter's identity, and her and Martin Bridger's chase of the thief across the country.
  • In Susan Schaab's novel Wearing the Spider a female attorney gets caught in a web of sexual harassment, identity theft and political intrigue.
  • In the Family Guy episode "Back to the Woods", James Woods, having gotten his hands on Peter's wallet, steals Peter's identity, so Peter retaliates by stealing Woods' identity and angering people.

See also

References

  1. ^ [http://www.idtheftcenter.org/ Identity Theft Resource Center website
  2. ^ http://www.worldprivacyforum.org/medidtheft_consumertips.html world privacy forum
  3. ^ Former Major League Baseball player Bill Henry was impersonated for over twenty years by an individual born with the same name. There is no evidence that the impersonator gained financially from the impersonation, but he did receive significant local attention.
  4. ^ http://www.privacyrights.org/fs/fs17g-CrimIdTheft.htm Privacy Rights Clearinghouse
  5. ^ Identity Theft Resource Center Fact Sheet 117 Identity Theft and the Deceased - Prevention and Victim Tips
  6. ^ http://www.ftc.gov/os/1998/05/identhef.htm Testimony before the Subcommittee on Technology, Terrorism and Government Information, Committee of the Judiciary, United States Senate May 20, 1998 pp 5,6
  7. ^ A Chronology of Data Breaches
  8. ^ Internet Identity Theft - A Tragedy for Victims, Software and Information Industry Association, retrieved June 30,2006
  9. ^ "Crime Stoppers Anonymity Guaranteed". Department of Justice Canada. 2007-12-29.
  10. ^ R v Seward (2005) EWCA Crim 1941
  11. ^ Government Bodies Must Play Their Part in Securing Against Identity Theft
  12. ^ http://www.ftc.gov/os/statutes/itada/itadact.htm Public Law 105-318, 112 Stat. 3007 (Oct. 30, 1998)
  13. ^ http://www.ftc.gov/os/1998/05/identhef.htm Prepared Statement of the Federal Trade Commission on "Identity Theft" May 20, 1998
  14. ^ Federal Trade Commission, retrieved June 30,2006
  15. ^ 72 Fed. Reg. 70944 http://www.ftc.gov/os/fedreg/2007/december/071213factafurnisheraccuracy.pdf Retrieved 2008-01-29.
  16. ^ Recent Surveys and Studies, Privacy Clearing House, retrieved June 30,2006
  17. ^ Verbal Testimony by Michelle Brown, July 2000, U.S. Senate Committee Hearing on the Judiciary Subcommittee on Technology, Terrorism and Government Information -- "Identity Theft: How to Protect and Restore Your Good Name"
  18. ^ Identity Crime Research and Coordination, Australasian Center for Policing Research, retrieved June 30,2006
  19. ^ What is Identity theft?,Home Office,retrieved June 30,2006
  20. ^ Identity Theft Over-Reported,Bruce Schneier, retrieved June 30,2006
  21. ^ IMDb: Identity Theft: The Michelle Brown Story (2004)
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