The new crime wave
IDENTITY THEFT is currently one of the fastest growing crimes, with a whopping 10m victims in the United States and losses totalling around US$10bn last year alone. That’s according to Justin Yurek, president of US-based start-up ID Watchdog. Yurek was in South Africa as part of the run-up to the company listing on the Toronto Stock Exchange.
Yurek says although the US is the current epicentre of identity theft, it’s not confined to that country. “In the US there are five pieces of information required to open a bank account: address, date of birth, phone number and social security number. However, because the address and phone number are variable details, it’s possible for an identity thief to redirect information to a different address and mask the fraud from the victim,” he says.
The fraudster would take use of the name, social security number and date of birth and open a new credit card or bank account in his name but with a different address and phone number. He’d then run up the credit card and when the account was handed over to a collection agency, it would trace it back to the identity theft victim. “Because the victim is unaware of what’s happening, it typically takes 12 months before the deception is detected and by then the damage is done.”
Yurek says in SA the incidence of social grant fraud is a good example of where identity theft is rife. In 2006 it was estimated that 400 000 people were claiming social grants they weren’t entitled to. Some of that occurs when fraudsters use fake identity documents to claim pension payouts.
Even when the fraud is identified in the US, there’s a very low conviction rate – less than one in 700.
Yurek says while most of the attention is focused on the financial aspect of identity theft, the same principles could be applied to accessing medical treatment or even when being arrested for criminal activity.
Finweek
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