How to Identity Theft - Essay Example

Introduction: Over the past few decades technology has grown to great heights and is still improving. Technology is shaping our world. It has become a part of everyone’s lives and it rules almost every action of ours. However, every new development has some merits and demerits. In this essay we focus on how technological developments have helped the growth of fraudulent activities like Identity theft. To do so we firstly need to understand the different types of frauds. Then we focus on what is identity theft, its growth using computers, and the possible precautions. Also the legal responses have been touched upon briefly. To understand the seriousness of identity theft we firstly need to know the different types of electronic frauds. The next section helps us understand the different electronic frauds Types of Electronic Frauds: With the increased usage of computers and the Internet, there is a lot of movement data and personal information. This is one of the biggest causes for the increase of electronic crime. E crime is treated very seriously and is every country has its own laws relating to the Internet usage. A few activities that are treated as crimes everywhere are: Manipulations of computer records for fraudulent activities Unauthorised access to information Modification of data by software cracking or hacking Piracy of software Spreading viruses Service attacks being denied hence causing website slowing down or crash of the website and Identity theft, which is mainly for the cause of fraudulent transactions (Computer Crime Research Centre, 2005). What is Identity Theft: Identity theft is when personal identification information is stolen for the illegal use of opening bank accounts, stealing money, pension payouts or to gain any other benefits. Here the accused generally pretends to be someone else for his own benefit at the cost of his victim. For instance in US the personal information such as name, address, date of birth, phone number and social security number are the most essential and are required for opening bank accounts. Thus loss of any one of these pieces of information could open a chance for id theft. Identity theft could seem to be a simple problem but the consequences could be drastic depending on the kind of fraud done by the thief. It could lead the victim to have a bad credit report, or even lead to arresting the victim for any other drastic crime. Identifying an identity theft is a very long process and can take even as long as twelve months by the time very large damages can have been made (Kelly, 2008). There are numerous sources from where identity theft those take place. The average amount of money the average victims loose due to identity theft is nearly $6,000. It is very essential to understand the various kinds of Identity theft. The more these are understood better the safer individuals can be against identity theft. A few of the different possible identity thefts are discussed below. Medical Identity theft, here the thief would generally get the details of the victim and can inflict considerable damages for the victim. Once the thief does have the identity of the victim, this could be used to receive medical benefits, like visits to the doctors, discounted medicines, and treatments. Also fraudulent claims is possible which would leave the victim with a lot of unpaid bills, number of calls from collectors, bad credit ratings and most important of all a completely wrong medical record. There are however more forms of identity thefts that are further discussed below. Driver’s license identity theft, here the thief would take up the identity of the victim and again a lot of damages can be made with this kind of identity theft. This could again be misused in numerous ways, like possession of number of identification cards, making false statements in driver’s license applications, etc. Credit card identity theft is one of the most common and can have drastic affects on the victim’s financial standing and credit report. These kinds of thefts can completely spoil the victim’s credit history and can cause damages from rejection of loans to criminal offence against the victim. There are various other thefts like financial identity theft, banking identity theft and social security identity theft these again can cause a drastic damage to the victims credit rating and some other damages which would be considerable difficult to repair. Identity Theft – Facts and Figures: The Federal Trade Commission (FTC), conducted a survey to get attain information on the sources of identity theft. The report of the survey in 2003 showed that 27.3 million Americans had been victims of theft between 1998 and 2003. The report showed that almost 14% of the thieves were from within the own family or workplace, 13% were people who obtained information during transactions, 4% received information through stolen mail and 14 % got information from stolen wallets, chequebooks or credit cards. (Federal Trade Commission, 2003) In a more recent study conducted by the Federal Trade Commission in 2007, the victims of identity theft were interviewed to analyse if there was any relationship between the victim and the thief and the source of information used by the thief. The report stated that out of 559 people who were interviewed, 84% of the victims did not know the thief personally, 6% were family members, 2% were co-workers and 8% were friends, neighbours, and in home employees. It was also reported that almost 56% of the victims were unaware of how their information had been stolen, 16% knew the thief personally, 7% was through other transaction or purchases, 5% was from their wallets, 5% was from the companies that held the information, 2% from mail, 2% from phishing and hacking, and 7% in other ways. It was also noticed that information was most likely taken from transactions that were made via electronic means. The consequences of identity theft are many for the victims. They most likely face problems like harassment by collectors, credit problems, loans rejections, criminal investigations, civil suits filled against their names, etc. (Federal Trade Commission 2007). Growth of Id Theft: Identity theft is one of the largest and fasting growing crimes. Over 10 million victims are affected by this every year and cause a loss of almost $221 billion a year (estimated by Aberdeen group). Identity theft can be done via a lot a mediums, it can be by the medium using the Internet, or even the postal mail. A lot of people receive pre-approved credit cards via mail, which they are meant to destroy if they are not interested in using. However if these cards are not correctly destroyed identity thieves can still use this to take the victims identity and make it their own. Some people send out cheques for bill payments through post, these contain the persons routing number and checking account number hence making it easier for Identity thieves to misuse the accounts. Other means through which identity thieves find personal information is directly from the victim itself. There is a high possibility for thieves to call the victim under the disguise of a credit card company, or the doctors office, or even the victims bank, and as a part of verification can obtain the key personal information from the victim. Often people don’t realise that their wallets or handbags can be one of the easiest mediums to get their key information since they carry credit cards, membership cards, drivers licence, health insurance cards, etc. may carry any of the key personal information. Also people carry a lot of information on their Personal Digital Assistants this is another very easy source of personal information for identity thieves. One of the other very common reasons for identity theft is when individuals share their bank account passwords or other personal information like social security numbers with people close to them like family members, friends, or even possibly business associates. Even though it seems to be a very disturbing and almost unlikely to happen, this is also one of the sources of information breach. These sources have led to the crime of identity theft; however one of the biggest sources of identity theft is the increase of the usage of computers and Internet. Computers and Growth of Identity Theft: It has been noted that the usage of internet has increased a lot over the last few years and the use of the different facilities like the online bill payment; money transfers, online banking, etc have also seen a rise. All these benefits have helped a lot in speeding up processes; however it has opened up a pathway for risk of identity theft. The Internet identity theft differs from the normal form of identity theft in a number of ways. This form of theft is much worse since the victim of the theft is not aware of the sensitive information being stolen, and by the time they do realise the theft, it is too late. Every transaction we make over the Internet leaves behind a trail with one or another of our personal information. This is one of the easiest paths used by thieves to get our personal information. When payments are made online, the merchants contact our credit card company for authorisation; here again information can be easily leaked out. Marketing companies that create data basis with all our information can also have leaks, like a malicious employee who has easy access to the database could be bribed to get out personal information. Also a computer infection called spy ware can be created on the victims systems by individuals, and this can collect all our personal information, spending habits, internet usage, passwords, etc, and send it to the individual for his own benefit or for selling to other for a price (Spam Laws, 2008). The one source used to acquire personal information by most identity thieves is from transactions on unsecured sites. Other example of stealing information are through the phishing mails, which are sent out from sites that look legitimate like EBay etc., to get information from the customers. The high importance given to computers in our lives has opened up many more ways to steal information. On a daily basis people receive high number of emails referring them to some account which requires attention, and requires to log in to resolve the issue, these mails are traps which have some sort of key loggers or something set up to capture all the personal information. The emails that are sent out normally contain messages that have a sense of urgency in them and are very tactfully written. These mails generally require the receiver to click on some link which would redirect the browser to another unsecured website, which might ask for information like credit card details etc. The messages generally received are from spammers who use names like pay pal, E-bay etc. to catch the attention of the receiver and try to get their information (Chad, 2004). Another very famous case of spam was that of Chase Bank, a rather famous financial institute. The spam worked through emails, where mails were sent warning recipients that their accounts were at risk of foreign internet source trying to access their account. The email included a link that the recipient needed to follow to rectify the problem. The thieves tried to convince the customer to fill in personal information to rectify the problem (Spam Laws 2008). There are thousands of people who have access to the credit card details of an individual over a year with the numerous transactions made over the year. Also the chances of employees working at banks or other places, where they have access to personal information pose a great threat to personal identity. Over the years there have been several cases of identity theft from internal resources. There has also been a case where a computer help-desk employee who had access to sensitive information, like passwords to bank accounts and credit companies information, stole all the sensitive information and sold it to a spammer for a fee of $60 per name. This continued for several years since changing passwords was not very common then. This again can be classified as a computer crime and it did impact the economy (Cobb & Cobb, 2003). Another very common and one of the biggest types of computer fraud are cloning of credit/ debit cards. This has been one of the biggest and simplest forms of identity theft. The process of cloning cards is extremely simple. When a card is swiped for a transaction, dishonest staff could misuse your card information by downloading all the details onto a computer and making a duplicate of your card. The victim of this kind of fraud will not be aware of this until they have received their next statement, by which time the thief would have spent it all. One of the most common places for cards to be cloned is at restaurants, where the card is taken away from the tables to be swiped (BBC, 2003). Computers have also facilitated many other forms of thefts like cloning of ATM cards. With the increased technological developments, the latest development and newest device that is used to track all key strokes at an ATM. This device is a transparent sheet that is placed over the keypad of the ATM, which tracks all the identification codes that are entered. To correspond to this there is another transparent device in the card slot that captures all the card information and the information is sent to a computer that records all the data that is necessary to clone cards (Christian Science Monitor, 2003). Examples - Major Identity Theft: The past has seen some major identity theft cases, some of which are discussed here. It is to be noted that these cases have all had one common issue due to which the identity theft was possible – Computers! The year 2005 saw three very high profile incidents of compromise of Personal Identifiable Information. Three very large organisations were involved in three very large cases where there had been a breach in personal information being let out opening up avenues for identity theft. The year 2005 first saw the incident of Choice Point, who are data brokers. Choice Point’s systems were not hacked but the criminals has opened up accounts with Choice point and accessed customer data as customers. Choice Point had disclosed personal information of almost 145,000 Americans by this time. It was in 2004 that an employee of Choice Point got suspicious and the Los Angeles police was brought in, and one arrest of the fraudulent account was made. It was later discovered that all the 50 accounts that were opened were based on illegitimate documents, and this was a major security breach for the company. This however was not the first time Choice Point was faced with this problem, a very similar incident has happened in the past in the year 2000. February 2005, also saw the big disaster faced by Bank of America. The bank announced that it had lost five of its backup data file in December 2004. These backup files contained personal information of 1.2 million federal employees and some members of the senate as well. The data was contained in files which were being moved to a storage facility, when it was lost. Official however confirmed that none of the data that was lost had been misused. Another one of the incidents was that of Lexis Nexis. The company had disclosed that they had identified a number of fraudulent cases where the customers IDs and passwords had been compromised to access a database of Seisint – a company that was recently acquired by Lexis Nexis (Smith, 2005). Possible precautions to avoid Computer fraud: An identity is stolen every two seconds. With the increased growth of computer fraud, it is essential that individuals do their best to avoid becoming the next victim of identity theft. There are a few precautionary measures that an individual can take up to ensure safety of identity and personal data. Some very simple precautions that could help be safe would be like assigning passwords to all the credit card, bank and phone accounts and changing the passwords at regular intervals. It is essential to supply social security numbers very sparingly. If at any given point in time it is necessary to give out the social security number, it is the individuals duty to check if it completely safe. It is then at the discretion of the individual if they want to disclose their social security number. Even at workplaces, before providing the personal information individuals should ensure that they check for the security of personal information and access to personal information and disposal of unnecessary records. Other small aspects which need to be kept in mind are, not to leave a laptop or desktop unattended at anytime, if ensure the system is locked before leaving from the place. Also disabling cookies is a good option since it will not save any personal information like credit card details or log – in onto the hard drive. Also the caches and temporary folders need to be deleted at regular intervals, since these do store sensitive data that can be misused very easily. Such small details need to be given importance to, to ensure that there is no scope for anyone to steal identities. With the growing technologies and in today’s Internet savvy world, it is essential that individuals try to keep themselves updated with the different sources that hackers use to gain personal information and financial information. It is essential that one understands about phishing attacks, spyware software, key-logging techniques, spam mails, etc. to ensure complete safety of their information. Also keeping an out for any suspicious websites would be very useful. It is essential that people doing online business give a close look to the privacy policies, and if anything looks suspicious or cannot be understood, it would be the wisest ides to avoid doing business with the company. Individuals need to make sure they take a few precautionary measures while disposing off laptops and computers. It is essential that individuals ensure that the hard drive is completely emptied and that there is not data of any sort stored on the computer. It is also very essential that the usage of the Internet is monitored, i.e. if the Internet is not in use, it is always better to disconnect the Internet. This is very important since a hacker will not able to gain access to a computer or any sort of control to a computer that is offline A very important point to be kept in mind is to ensure that no personal information is given out on the Internet, unless initiated by the customer and the customer is aware of who they are dealing with. Storing of Personal Identifiable Information on the computer is not very secure. Hence if doing so the individual needs to ensure that the computer that has any of this information is safeguarded by a virus protection software, which is regularly updated. It is always safer to avoid opening mails, or click on links from unknown people. Also using a firewall is very beneficial and can help safe guard the system to a great extent. The choice of browser used is also very important; it is essential that a secure browser be used that uses software that encrypt any information sent over the Internet. With the very famous saying precaution is better than cure, it is best to avoid saving any personal information, especially financial information on a computer. The government always encourages people to check their credit reports on a regular basis. The credit reporting agencies like Trans Union, Equifax, and Experian, are obligated to provide the customers upon request with one free report every twelve months (Smith, 2005). Identity Theft – Solution: With the increasing cyber crime, and cyber criminals being able to steal within a matter of seconds, there is only one solution to prevent theft. Backed by Goldman Sachs, Kleiner Perkins Caufield and Byers and also one of the leading venture capitalist in the world, Bessemer Venture Capitalist, LifeLock is one of the best and most relied on solution to prevention of identity theft. LifeLock is a company that was started to help customers prevent identity theft. The company is head by some very professional, best, and most experienced people. George Reyes, CFO Google, has recently become agreed to be a part of LifeLock Board of Directors. They provided this service for a charge of $10 per month. They specialize in preventing fraud and ensure that no personal information of the customer is secure. They ensure that if there is any sort of activity on a customers account, the customer is called to confirm that they are aware of the activity. LifeLock solutions are an ISO certified service and is the best rated service for prevention of identity theft. The company guarantees that identity theft would not be an issue if an individual is registered with them, however in the unlikely circumstance of an identity theft, the company ensures they would do all that it takes to recover the victim’s good name and they are willing to spend up to $1,000,000 to do so (LifeLock, 2008). Conclusion: From the above research it is quite evident that almost only 11.6% of the crimes happen over the Internet, however whooping 68% thefts happen from paper sources. The computer crimes do not only involve the Internet, but may also be caused due to breach in data security or computer security. Thus to conclude the essay, looking at the different and many risks that an individual faces in regards to their personal information it is essential that steps be taken to ensure the safety of their data. The government has come up with a lot of help for victims of identity theft and is trying to ensure that this is eradicated completely. The truth is that until individuals are proactive and serious steps are taken to reduce the crime, by physical means or by cyber attacks, the crime of identity theft will still be prevalent. The risks involved are numerous and it is in the hands of individuals to ensure their data is well protected. A little carelessness could cost the individual a lot, it could even mean that they be charged for criminal activities. As discussed in the essay, victims of identity theft are normally people who lack enough knowledge about the Internet. It is essential that individuals are informed and are always in the process of learning about and prevention methods of identity crime. It is essential that individuals take up the responsibility of securing their information to help the government’s efforts to remove this crime completely. It is seen that the crime rate has increased a lot over the years and there are very simple steps that can be taken to protect one self. Despite the technological growth and advancement banks and other institutions are trying their best to ensure complete safety against identity theft. It is important that each one of us understands the seriousness of this crime and ensures our safety. Together with them and the government and a little diligence from the customers end, it would be quite possible to completely remove this crime from society. We need to ensure that technological developments are used in productive ways rather destructive. References BBC, 2003, ‘Credit Card Cloning’, Inside Out, 7 July 2003, Accessed on 28 August 2008, Retrieved from http://www.bbc.co.uk/insideout/east/series3/credit_card_cloning.shtml Chad, 2004, ‘Tip #1309 – Phishing Spams’, World Start Inc., 2004, Accessed on 29 August 2008, Retrieved from http://www.worldstart.com/tips/tips-pr.php/1309 Christian Science Monitor, 2003, ‘The Basics New Reasons to Guard Your ATM Card’, 2003, Accessed on 30 August 2008, Retrieved from http://moneycentral.msn.com/content/Banking/P57803.asp Cobb, S. & Cobb, C., 2003 ‘Computers Make Identity Theft Easier’, 2003, Accessed on 29 August 2008, Retrieved from http://www.cheycobb.com/computer_id_theft.html Computer Crime Research Centre, 2005, ‘Types of Computer Crimes’, 26 November 2005, Accessed on 30 August 2008, Retrieved from http://www.crime-research.org/news/26.11.2005/1661/ Federal Trade Commission, 2003, ‘Identity Theft Survey Report’, September 2003, p27- p31, Accessed on 30 August 2008, Retrieved from http://www.ftc.gov/os/2003/09/synovatereport.pdf Federal Trade Commission, 2007, ‘2006 - Identity Theft Survey Report’, November 2007, p28- p30, Accessed on 30 August 2008, Retrieved from http://www.ftc.gov/os/2007/11/SynovateFinalReportIDTheft2006.pdf Kelly, B., 2008, ‘The new Crime Wave’, Finweek, 10 July 2008, p51 LifeLock, 2008, ‘How LifeLock works’, 2008, Accessed on 4 September 2008, Retrieved from http://www.lifelock.com/lifelock-for-people Smith, M., 2005, ‘Identity Theft – The Internet Connection’, CRS Report, 16 March 2005, Accessed on 31 August 2008, Retrieved from http://italy.usembassy.gov/pdf/other/RS22082.pdf Spam Laws, 2008, ‘All About Identity Theft’, 2008, Accessed on 29 August 2008, Retrieved from http://www.spamlaws.com/identity-theft.html Read More