What is Identity Fraud

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What is Identity Fraud

Identity fraud is exactly what it sounds like. Identity
fraud is defined as access to another person's personal
account information that leads to fraud.

Identity fraud is the crime that most people fear. If you
do not know much about identity fraud and identity theft,
you should make sure you read and learn about this type of
criminal activity. You cannot protect yourself, if you do
not understand the crime!

Around the world people are beginning to acknowledge that
albeit a comparatively new form of criminal activity the
instances of identify fraud are on the increase. Every year
there are more cases of identity fraud.

According to the Federal Bureau of Intelligence (FBI) and
the Federal Trade Commission (FTC) identity fraud is among
the fastest growing crimes in the USA and is also receiving
increasing media attention. This type of criminal activity
affected over 27 million victims and the loss of billions
of dollars to businesses and financial institutions from
1998 to 2006.

Identity Fraud is growing at an alarming rate in the UK and
it is predicted to get much worse. Identity fraud has been
identified as costing the UK billions of pounds a year, and
is one of Britain's fastest growing crimes, yet people are
still not doing enough to protect themselves.

Not just in the USA and the UK is identity fraud causing
concern but in every major country around the world.
Identity fraud is a growth industry and as fast as law
enforcement agencies, government departments and financial
institutions move to plug gaps and loopholes, the criminals
find new ways to exploit a fundamentally flawed system
based on old-fashioned paper and cumbersome, slow-moving
bureaucracies.

The term identity fraud has become very popular over the
last 10 years. There are many explanations on what identity
fraud is but I believe it is most accurately described as
the crime committed when someone's good name and identity
is stolen and used for illegal purposes.

Identity fraud is a far wider problem than the popular
understanding that criminals assume another person's
identity to obtain cash, property or services.
Unfortunately, thieves can steal your information very
easily and use it any amount of different ways. Some of the
possibilities include:

- By going through your household rubbish in an attempt to
find important personal details (receipts, bank statements,
personal mail). You would be amazed what people put in
their rubbish.

- By simply obtaining a credit card number or the actual
credit card can allow criminals to make unauthorised
charges to your account. Credit card numbers are on any
receipts you receive for purchases made. Also on your
monthly statements you receive in the mail. If you lose a
credit card for some reason your number is on it and can
be used fraudulently. Credit card fraud can occur at a
merchant or over the telephone or the Internet where you
do not need to be present to purchase goods. Who knows what
is happening at the other end – we tend to trust people
too much.

- By Skimming – this is form of credit card fraud that
occurs in the course of a normal, legitimate transaction
and involves copying the magnetic stripe from a genuine
payment card and transferring the information to a
substitute counterfeit card.

- Hacking into personal computers and databases. With the
technology that is available today even criminals with the
basic technology skills can hack into computer systems.

- By gaining the trust of the unsuspecting victim to elicit
their personal information from them. This is commonly
known as Social Engineering or Pretexting. These are
illegal practices were your information is gained by false
pretences.

- By obtaining false documentation (birth certificates,
passports, drivers licenses etc).

Identity fraud is not exclusive to one particular type of
criminal activity. Identity fraud is now becoming big
business and it encompasses most of the major criminal
sectors in some form or other, including, illegal
immigration, drug trafficking, money laundering, vehicle
theft and fraud against the public and private sector.

Identity fraud is becoming a clear and growing threat to
all forms of our society. Everywhere you look, identity
fraud is making news these days.

Though commonly referred to as a "privacy" problem,
identity fraud can be more accurately described as a
financial crime. The fact is, bank and credit card identity
fraud is big business these days and you can get caught out
in several different ways.

One of the biggest problems in the battle against identity
fraud is the growing sophistication of the methods being
used, which in most cases stay ahead of detection methods.
Especially with the introduction of Chip and PIN to combat
credit card fraud, fraudsters are turning to new scams and
identity fraud is proving particularly lucrative.

While "true name identity theft" is a very real problem,
the reality is that consumers never report the majority of
identity fraud because consumers are never directly
victimised. Unfortunately, in many areas identity fraud is
not acknowledged and is not as a crime and is rarely
prosecuted.

One of the strongest ways of stopping identity fraud is
education, and education comes in the form of knowledge.
The best defence most people have against identity fraud is
early detection.

Preventing identity fraud requires a conscience change in
behaviour that makes you alert and aware of the way you
manage your personal information on a daily basis.
Prevention is always better than the cure, as it can take
many frustrating phone calls to deal with banks, credit
card companies and other lenders if you have been a victim
to identity fraud.

One theory of reducing the potential for identity fraud is
to introduce national identity card schemes throughout the
major countries of the world. An International/National
Identity Register, using biometric technology to crack down
on multiple identities and secure personal data on behalf
of the individual, would back these.

The problem with that kind of system is its implementation
on a global scale also in some quarters it is "Big Brother"
gathering all your information and being able to keep a
watch on your every move.

The scary thing about identity fraud is how easy it really
is to get the needed information, YOUR information.

About the Author:

Jim Moore comes from a background in engineering and
financial services software. Jim has spent the last 20
years as a professional writer working for some of the
world's largest engineering and financial companies.
Jim's personal goal is to pass on what knowledge he has
gained throughout his career to help as many people as
possible.
http://www.mooreti.com