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26 October 2003

DIDW: Identity theft

The Guardian published a UK-focussed account of identity theft this weekend:

In this modern commodity world, your most valuable commodity is not your posh car, sharp computer or show-off mobile phone. It's you. Your ID. Because the modern commodity world works not on currency, but on trust in individual identity. Trade takes place on the basis of looking at your identity and deciding how safe you are to deal with. So, if someone is able to steal your trustworthy ID, a booty-store of cash, goods and services, procured in your name and without your knowledge, is laid wide open to them.

The Guardian article is very good at recognising the personal aggravation caused by identity crime:

Such aggravation is the result of it being down to you, the one whose ID is stolen, to clear your name with each organisation with which the identity thief gets you involved - and not just with the one credit reference agency. In this sense, you could be said to be doing the job of the credit reference agency for them.

and also the greater risk:

As trust breaks down between consumers and organisations, more and more groups will fall into a high-risk category and become disenfranchised. The young, recent migrants, expats, anyone without a credit history will find it impossible to obtain the goods and services that we have all come to expect as a basic right.

Digital ID World had a talk on identity crime from Bob Bond, of the US Secret Service. I particularly enjoyed Bob’s unabashed usage of phrases like ‘bad guys’ and ‘take them down’ but also appreciated his clear and concise ID theft primer. My notes follow…

Bob Bond (US Secret Service), Identity Crime

Identity crime is the theft or misuse of personal or financial identifiers, in order to gain something of value and/or facilitate other crimes.

Identity theft is usually associated with other crimes (e.g. narcotics trafficking, mortgage fraud, terrorism) and used as a facilitator – financing or anonymity – for these activities.

We’ve seen a proliferation of financially-motivated identity crimes because the:

Start-up costs are so low:

  • Information on different schemes is readily available on the internet and in books, newspapers and movies
  • The required equipment can be bought or leased, often with ‘no money down’

    Profit potential is high

  • Gains higher
  • Businesses are willing to absorb ‘acceptable levels’ of fraud loss
  • Proceeds easier to launder and conceal

    Risk of successful investigation and prosecution is low

  • Detected well after they’re committed, often go unreported and often never investigated
  • Declinations are frequent, sentences tend to be light
  • Victims don’t suffer a ‘personal injury’

    USSS position on identity crimes:

  • Increasingly trans-national organised criminal enterprises
  • Increasingly diversifying into more serious offences, e.g. narcotics trafficking, extortion…
  • Compromise US and global economic infrastructures
  • Reduce corporate productivity and lead to higher costs for consumers
  • Create an atmosphere of suspicion

    Identity theft – ‘how to’

  • Stealing a victim’s trash ('dumpster diving')
  • Stealing a wallet
  • Shoulder surfing or eavesdropping
  • Obtaining information through a ruse such as a phone scam or internet scheme
  • Stealing information from a victim’s home or car
  • Stealing from your mail or from mail in transit (‘steal me’ flags)

    Additionally, ‘breeder documents’ can be downloaded from the internet and used to acquire legitimate documents like drivers’ licenses. (Seven of the 10 terrorists responsible for September 11th used this method.)

    These criminals can obtain personal identifiers of individuals with good credit by:

  • Recruiting individuals who have access to other people’s personal information in the course of their employment
  • Stealing documents from businesses that contain personal information (e.g. rental contracts, loan applications, personnel records, medical records)

    This information is then used to obtain credit in victim’s name. The information can also be used for an account takeover, by filing a change of address and requesting the issuance of convenience cheques.

    The victim is usually oblivious to the fraud until they have a loan or credit application denied, or they’re contacted by a bank or collection agency.

    Also see:

  • The US Federal Trade Commission's Identity theft resource (including their recent report (pdf), which contains very interesting stats - e.g. ‘Only 9% of victims knew that they had lost their personal information because they had lost a wallet or were victims of theft’)

    Posted at 09:49 PM in Identity | Permalink

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