Identity theft has been described by US law enforcement agencies as the "crime of the century" because it is pervasive, if not well reported in this country. ICT is increasingly being used to abet fraudsters, but can also be used to combat such fraud.
According to a recent US Federal Trace Commission survey, about 9.9 million Americans fell victim to identity theft in 2002. Losses from such crimes totalled $48 billion, and consumers reported $5 billion in out-of-pocket expenses. The survey also found that fraudsters opened new charge accounts using other names, and that 6.5 million victims reported misuse of credit card accounts.
While personal identity document theft and misuse is a long established problem in SA, the exact number of such cases is unknown, according to Mario Fazekas, head of Ernst & Young`s forensic services in this country.
However, it is clear that fraud is increasingly involving the use of PCs and the Internet, although experts point out that ICT can also be harnessed to help reduce identity fraud - if used correctly.
"There have been more and more prominent cases of identity theft involving criminals posing as their victims," Fazekas says. "There has also been a rise in corporate identity theft that includes the spoofing of Web sites."
A recent case of identity theft occurred at an Absa branch in Durban, when criminals posing as the account-holder emptied an account. They opened a new Internet banking account linked to the existing account and then transferred money out of the original account.
Louis Blom, head of Internet banking at Standard Bank, says the continued education of clients is possibly the best and first line of defence against such crime.
"We continually educate our clients in what to look for that could be suspicious, especially the receiving of false e-mails and how to verify they are on the real Standard Bank site," he says.
In the US and UK, the main way for fraudsters to perpetrate this kind of identity theft is to obtain the victim`s banking details, either through intercepting post or by sending out a false e-mail proclaiming to be from a bank and saying it needs to update its records.
"A way to avoid that kind of identity theft has been the recommendation by US experts to use Internet banking and the electronic mailing of statements," Blom says.
International research firm Gartner recommends that banks and other financial institutions should conduct checks for identity theft fraud before issuing a loan. It says banks should consider reclassifying all loans in which a payment date is missed as identity theft fraud, because such an action will raise creditors` appreciation of identity theft fraud, while reducing their loan and credit losses. Banks should also invest in solutions that prevent identity theft fraud, says Gartner.
Fazekas also recommends a solution being implemented by Australian banks that awards points for every item of documentation, until the required number of points are accumulated in order to open an account.
Share
