Categories Of Theft
Many different types of theft may occur during one’s lifetime. For purposes of this guide we often refer to fraud and identity theft interchangeably, as essentially fraud is a form of identity theft.
In 1998 the federal government created the Identity Theft and Assumption Deterrence Act. This Act defines identity theft and makes it a federal offense for someone to knowingly use, transfer or otherwise use someone else’s identity or person without lawful authority or consent of the individual involved. Further, the act makes it unlawful for any person to aid or abet someone engaging in any form of identity theft. Any activities that involve the unlawful use of someone else’s personal identity or information are subject to arrest and conviction for a felony under state and local laws.
There are four main categories of identity theft:
Financial: Financial identity theft is the most common. Just using your stolen credit card details to buy things is the example we all know about and guard against. Your telephone bills may soar if a thief is able to use your telephone calling card or otherwise get access your telephone account. The identity theft criminal may get even bolder, and take out debts in your name, obtain a new credit card, sign up for a telephone or electricity account, lease a car, or take out an apartment lease. You could even find someone else has taken out a mortgage on your own home, and vanished with the money. It is not unknown (but rarer) for a person to find their home or other property has been put on the market, and even sold by an identity thief, though this is a more difficult deception for a thief to pull off.
Criminal: Some criminals will prepare for the risk of being caught by the authorities by having someone else’s identity ready. The most common example is in traffic violations. They may even carry a false driver’s licence in your name, bearing their photograph, just in case they get caught. The first you know is when you get the citation for not responding to the charge. Access to drinking establishments when under the minimum legal age is another common example. Another example is using your stolen licence plate to steal fuel in “drive offs” from service stations. It is your number plate that appears on the security cameras. Filing a fraudulent tax return under another person’s name is also a common form of identity theft, perhaps to preserve an income tested state benefit the thief receives. The possibilities of how criminals could use your identity to cover up their crimes can get more serious still.
Cloning: Occasionally criminals will take on someone else’s identity to get a passport or driver’s licence, or to access data, when they have their normal channels blocked. They may even steal an identity to start a totally new life, perhaps if they are wanted persons. Illegal immigrants, criminals, bankrupts and even abuse victims may use this approach to start a new life, as you. Their purpose may not be to hide behind your identity to commit a crime so much as to just conceal their true identity behind the respectable façade of your identity. You may not incur financial or other losses, but have the unnerving experience of having your reputation merged with that of a “clone”. You may notice nothing until, for example, your good credit record is unaccountably damaged.
Commercial: Businesses can also find themselves embroiled in identity theft problems. A tenant may sell off the landlord’s furniture, purporting to be the owner. A person may gain access to premises or data by falsely using an authorized person’s identity. At the other extreme, a company may have to deal with purchasers or creditors waving contracts signed by an identity thief who falsely claimed to have represented the company when entering into a large transaction. At this stage the identity thief has usually long vanished with the proceeds of the crime.
With so many ways for unscrupulous people to profitably steal your identity, you need to take precautions.
The FTC reported the top complaints among fraud victims during the most recent year included these categories:
Fake lottery scams by phone, mail or through the net.
Money offers or offers of free money, again by phone, through the net or by mail.
Shop at home sales fraud, where a customer buys an item online but never receives the item, and is not able to contact the person they bought the product from, and
Computer or Internet service provider complaints.
The Rise Of The Internet
Many of the complaints logged by the FTC relate to the Internet or use of the Internet. In fact, almost half of all complaints have some link to the Internet. This is just a confirmation that identity thieves and fraud criminals are using modern technology now, more so than ever before to commit crimes.
Crimes committed over the Net are often anonymous crimes, because the criminal can hide behind their computer screen without worry that someone will discover who they are or where they operate. A site can be put up just as easily as it can be taken down, in a matter of minutes.
The more people use their personal or even business computers, the more likely they are at risk for fraud or identity theft. Losses reported by consumers during 2005 accounted for roughly $600 million in lost dollars, and these statistics relate only to victims that classify their crime as “fraud” and not actual identity theft.
Most victims of identity theft or fraud report the initial contact occurs through email, or by the Internet, through phone contact or by mail. The FTC reports that the average loss occurring from misuse of one’s personal information to obtain credit cards or loans averages roughly $5,000 per person, and that does not include the costs associated with repairing the damage to one’s credit following an identity crime.
In 2003 the FTC reported the total number of hours individuals and businesses spent resolving problems related to identity theft topped more than 297 million hours. Imagine for a moment the expenses associated with such losses.
Most Common Types Of Fraud And Identity Theft
According to the Consumer Sentinel, working with the Federal Trade Commission to provide up-to-date information about identity theft and fraud, between January 1st and December 31st of 2006, the following categories claimed the top six spots among consumers.
Fraud related to prizes, sweepstakes or lotteries, which accounted for 8-20% of complaints in all 50 states in 2006.
Fraud involving Internet services or computer complaints, which accounted for 4-11% of complaints.
Shop-at-Home Fraud. These may involve schemes where people buy products from their home over the Net or over the telephone and pay by giving the individual offering the product their credit card number. The product either (1) never arrives (2) arrives damaged or not as described or (3) the consumer becomes a victim of identity theft as the agent uses their credit card information to buy other products or walk away with the consumer’s cash and personal information.
Advance-Fee Loan and Credit Protection/Repair Fraud. We’ll talk more about these later, but these schemes usually involve fake schemes offering loans or credit protection or assistance in exchange for an up-front fee. The customer learns too late that they will not receive the services paid for.
Internet auction fraud, where a consumer would purchase an item and never receive it, or receive an item of less value that the presenter stated. Alternately, an individual sends a fraudulent check that appears to clear, but ends up not clearing and costing the seller money.
Foreign job or money offers fraud, where an individual claiming to be a foreign national asks for money or offers money in exchange for some petty services, but never delivers.
It is important you understand what each of these categories mean so you know to protect yourself from them should an offer present itself to you. Let’s talk a little more in-depth about a couple of the more common types of fraud and identity theft that occur. We mentioned these categories already, but statistics show time and time again consumers fall victim to them. Perhaps out of their desire to earn some extra income, perhaps because they simply want to repair or protect their damaged credit.
Prize, Sweepstakes And Lottery
Prize, sweepstakes and lottery fraud is easy to detect. Generally a consumer receives an email or direct mail claiming they won a lottery, sweepstakes or prize they did not apply for. If an email, the sender will encourage the respondent to click a link directing them to an official looking site where they will ask for confidential information, including credit card information.
In direct mail, the consumer may need to call a number and is then prompted to provide personal details. The “winner” may need to pay a “fee” or a small transaction fee to process their winnings. Most times, these are schemes used by thieves to get your money or your credit card number.
Advance Fee Loan And Credit Protection And Repair
In an advanced fee loan or credit protection scam, a con artist poses as a legitimate bank or authority. They ask the potential candidate to pay a fee to guarantee their loan gets approved, no matter their credit history. Most scam artists offer “guarantees” to convince the consumer they are a legitimate business. Still others offer to repair one’s credit in exchange for a fee.
Here is a tip. No one can instantly repair your credit. Fixing bad credit takes time, so if someone offers you a guarantee that they can do it instantly, chances are they are scamming you out of your hard earned money. They may also collect personal information they may later use in an identity theft scam.
Internet Auctions And Foreign Money Offers
Internet auction fraud or scams are similar to shop-at-home scams, where a consumer pays for a product they do not receive. Alternately, the product they receive is not the product they thought they were getting. It may be of poor quality or contain missing parts.
Many times consumers receive requests for assistance from individuals posing as foreign nationals. This foreign money scam is one of the most well known, but still impacts victims today. Often referred to as the “Nigerian letter scam,” it involves individuals receiving a letter or email from a foreign representative stating they need help transferring money overseas.
The amount is usually very large, up to 30 million. The scam artist suggests they are a government official, and asks the victim to transfer the cash to a bank in the host country. Typically, the user is asking the individual to allow him to transfer money to the victim’s bank account, in exchange for a small percentage of the money.
If you then provide your banking details and personal information, you often receive fake statements and documents suggesting money is being wired to your bank, when in fact no money arrives. Instead, a scam artist or identity thief now has your personal information and can use it to take money from your bank or secure other accounts in your name.
Foreign Offers Of Employment
Illegitimate offers of employment are another way identity thieves are gaining information from innocent victims. In this case, a foreign company claims to offer you a job based on review of your resume. They may get your resume from online resume services or any number of other ways.
They will ask you to send them information including your social security number, ID number or other personal information so they can authorize payment to you and verify you are who you say you are.
Here is a tip. Never accept a job offer from someone you haven’t met or interviewed with personally. The chances are very high the situation is a scam and will result in identity theft. If the person claims to represent a nationally known company, ask for the director of the Human Resource Department’s name and number, then call that number to verify whether the offer is legitimate. You can also look the company up online (most legitimate companies are listed online) and find the number you are looking for their. Doing this is probably more reliable then depending on information given to you by the person who calls you unexpectedly.
Remember, it’s your job to protect yourself. Identity thieves and con artists come up with new ways every day to trick their victims and steal their hard earned money. Don’t let an identity thief or con artist walk away with your money. Do what you have to do to protect your identity.
Still not sure what to do about identity theft? Don’t worry… in the next chapter we’ll provide you with all the information you need to protect yourself from identity theft. You will learn subtle and not so subtle ways of deciding whether an offer is from a legitimate company or person or whether you may be the next victim of an identity thief. We’ll also provide you with valuable resources you can use to verify information in the event someone poses an offer to you that may be false. You’ll even find out how to report cases of fraud before they happen, as you learn to recognize false offers as they happen
