IDENTITY THEFT

PART 2 - What Is Identity Theft?
By Elaine Currie, BA (Hons)

Identity fraud (also commonly known as identity theft) in the UK costs the country an estimated £1.3 billion a year. A quarter of UK adults know someone who has been the victim of identity theft or have themselves suffered as a result of having their identity stolen and misused. Identity theft is a crime which exists both offline and on the Internet. The menace of identity theft is growing but a recent survey show that 33% of adults in the UK take no precautions to protect themselves against this crime.

In Part 1 of this series we looked at the meaning of "identity" when used in the context of identity theft. In Part 2 we will look at the different types of identity theft.

What is identity theft?

When we think about identity theft, we usually imagine the situation where a fraudster poses as another person by taking over his whole identity. In this type of identity theft the fraudster will use the innocent party's birth date etc as "proof" of who he is. There are, however, different types of identity fraud. Identity theft can be divided into three distinct categories: account takeover, application fraud and, the most frightening of all, assumption of identity.

Account takeover is where an identity thief obtains sufficient information to access an existing account such as bank or credit card account. On the Internet, this type of theft can also include taking over email accounts. Account takeover is the most common type of identity theft. Account takeover is the riskiest form of identity theft from the fraudster's point of view because he has no way of knowing when the victim has discovered the fraud. If the fraud includes visiting banks to withdraw funds, there is a danger that the fraudster could be caught. Account takeover is usually the shortest lived form of identity theft as it can be discovered as soon as the victim receives his next account statement.

Application fraud is where the identity thief obtains a sufficient amount of details about you to succeed in "proving" that he is you. He then opens new credit accounts in your name. Application fraud can be carried out successfully in cases where the identity thief obtains even the bare minimum of information about your identity. Using a copy of your birth certificate and a stolen or forged utility bill, the identity thief can open up credit accounts in your name. If the thief arranges for the account statements to be sent to a different address, huge bills can be run up in your name without your knowledge. The identity fraudster can use these accounts until they fall so far into arrears that the companies close the line of credit.

Assumption of identity is where the identity thief completely takes over your identity. This is the rarest form of identity theft (most identity fraud relates to finance only) but it is the most difficult to resolve. It will include obtaining documents bearing your name but photograph and signature will be those of the thief. Assumption of identity is the most frightening form of identity theft. If an identity thief takes over your identity and commits crimes, you can find yourself under arrest while the thief is free to continue his activities. It is a simple matter for an identity thief to obtain a copy of your birth certificate, apply for a driving licence which will bear your name, the thief's photograph and the thief's signature (ie your name signed by the thief). As nothing tangible has been stolen from you, there will be nothing to warn you that your identity has been stolen and the thief can, at his leisure, build up a whole profile of you at addresses you know nothing about.

Case Study

In February 2003 a 72 year old retired charity worker, Derek Bond from Bristol, England arrived in South Africa with his wife for a holiday. He was promptly arrested at gunpoint and thrown into jail. Mr Bond was innocent of any crime but his identity had been assumed by a criminal named Derek Sykes. Mr Sykes, who was wanted in connection with a multi-million dollar fraud had, since 1989, been using Mr Bond's name, date of birth and passport number. Mr Bond was finally released after spending almost three weeks in jail even though he had committed no crime. The identity thief was only caught and jailed through an anonymous tip-off, he was living in Las Vegas under the name Robert Grant.

Part three of this series looks at the different methods of committing identity fraud.

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