Identity Theft

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The Unique Alternative to the Big Four
Identity Theft Michael Vian, Senior
Manager Forensic Services Group
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Overview

• Introduction
• What is Identity Theft/Fraud?
• How can your identity be stolen?
• How can your information be used?
• Federal Government Response
• Prevention
• Case Examples
• Questions

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Introduction

• 1995 The Net starring Sandra Bullock
• Software Engineer
• Entire life is on the web, few friends, rarely
  leaves the house
• Given a weird program to de-bug which shuts
  down her systems
• Friend is killed mysteriously and she is being
  pursued
• All records and references to her character are
  erased
• Given a new identity, complete with a police
  record and outstanding warrants

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Introduction

• Statistics
• According to the FBI Identity Theft is the
  fastest growing crime in the US
• Federal Trade Commission fastest growing
  category of consumer complaints
• In 2005, the FTC reported Identity Theft was the
  1 consumer complaint (37) for the fifth year in
  a row
• In 2006
• Number of victims of Identity Theft went down to
  8.9 million
• Loss attributed to Identity Theft went up to
  56.6 billion
• Average loss per victim went up to 6,383
  (includes business victims)
• Average resolution time per victim went up to 40
  hours

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Introduction

• 25 of Identity Theft victims know or are related
  to the thief
• 70 of all Identity Theft cases are an inside
  job perpetuated by a co-worker or employee of
  a business you frequent
• Surprise!!! In a large number of the above
  cases, stolen identities were not done by an
  employee, but by the business owner!
• In 2005 Illinois was ranked 10 in states that
  have the highest number of Identity Theft-related
  cases (87.3 per 100,000 residents)
• Identity Theft is estimated to be the cause of up
  to 25 of all credit card fraud losses
• Most credit card firms decline to prosecute
  offenders too expensive
• Consider this to be a cost of doing business
  losses pushed to merchants

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What is Identity Theft/Fraud?

• Identity Theft refers to crimes in which
  someone wrongfully obtains and uses another
  persons personal data (name, date of birth,
  social security number, credit or debit card,
  etc) in some way that involves fraud or
  deception, typically for economic gain.
• Most victims of Identity Theft dont know their
  identity has been stolen until up to a year or
  more has passed

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How can your identity be stolen?

• Business Record Theft A thief can get your
  information from businesses or institutions by
  stealing or copying files out of offices. You
  can be a customer, employee, patient or even a
  student. Some information was found to be
  obtained by bribing an employee. Lately, news
  reports indicate hacking of computer systems or
  employees losing computers or storage devices
  containing sensitive information
• Shoulder Surfing A thief can memorize your
  checking account information while you write a
  check in a check-out lane, watch you punch in a
  phone card or credit card number, or listen as
  you give this number over the phone to obtain a
  hotel room or rental car

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How can your identity be stolen?

• Dumpster Diving A thief will rummage through
  your trash, a business trash, and a landfill for
  personal data
• Keylogging A high tech thief will download a
  keylogging program embedded in a video or audio
  download and watch everything you type while on
  the internet
• Phishing Usually an e-mail from a former
  government official offering to give you a cut
  of profits for assistance in moving a large sum
  of money through your bank account, or an e-mail
  disguised as coming from a legitimate company
  (eBay, PayPal, Bank of America) requiring you to
  log into your account through a link in the
  e-mail and provide confidential information or
  risk the account being closed

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How can your identity be stolen?

• Old fashioned ways
• Stealing a wallet or purse containing
  identification and bank/credit cards
• Stealing mail, including bank and credit card
  statements, pre-approved credit offers, new
  checks, and tax information
• Completing a change-of-address form to divert
  your mail to another mailing address
• Breaking into your home and stealing personal
  information

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How can your information be used?

• Spending Spree A thief takes your debit and
  credit card numbers and purchases big ticket
  items like computers that can easily be resold
• New Credit A thief takes your information
  (name, date of birth, social security number) and
  opens new credit card accounts in your name,
  charges the accounts to their max, and does not
  pay the bill
• New Car A thief takes your information and
  applies for an auto loan in your name and buys a
  car
• New Phone A thief takes your information and
  establishes a phone line or wireless service in
  your name and calls phone sex numbers all day
  long

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How can your information be used?

• New Bank Account A thief takes your personal
  information and opens new bank accounts in your
  name and passes bad checks on the account
• Bankruptcy A thief running out of time files
  bankruptcy in your name to avoid paying debts
  they have incurred under your name or to avoid
  eviction
• Arrest A thief gives your personal information
  to a police officer during an arrest. If they
  dont show up for a court hearing, an arrest
  warrant is issued in your name!

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Federal Government Response

• Identity Theft and Assumption Deterrence Act of
  2003 amended US Code, Section 1028 Fraud
  related to activity in connection with
  identification documents, authentication
  features, and information. The section now
  makes possession of any means of identification
  to knowingly transfer, possess, or use without
  lawful authority a federal crime, in addition to
  unlawful possession of identification documents.
• Fair and Accurate Credit Transactions Act of 2003
  - added new sections to the federal Fair Credit
  Reporting Act (15 U.S.C. 1681), intended
  primarily to help consumers fight the growing
  crime of identity theft. Accuracy, privacy,
  limits on information sharing, and new consumer
  rights to disclosure are included.

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Prevention

• Check your credit report at least once per year,
  correct any errors, and question anything you
  dont feel is correct dont wait!
• Secure personal information (safe, locked file
  cabinet) in your home, especially if you employ
  outside help or are having work done in your home
• Be aware of your surroundings and anyone nearby
  when using your PIN. Never throw away an ATM
  receipt in a wastebasket
• Carefully dispose of papers containing personal
  information by tearing up or shredding charge
  receipts, bank statements, expired credit cards
  and offers of credit

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Prevention

• Do not carry all of your credit and/or debit
  cards with you at all times
• Do not carry your Social Security Card, birth
  certificate or passport with you unless you need
  it
• Do not give out your credit card or bank account
  number over the phone or the internet unless you
  confirm you are dealing with an actual
  representative of a legitimate business
• If you are denied credit, find out why!

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Case Examples

• Paris, France In 2002, two individuals were
  arrested possessing 30 French passports, 60
  revenue stamps and 60 laminated films bearing the
  initials of the French Republic.
• These items are used to create proper French
  passports
• The investigation uncovered ties to a radical
  Islamist faction
• The documents were intended to be given to groups
  training for military formations in Afghanistan
  and Pakistan
• In 2005, Bill applied for a new car loan and
  was turned down. When he asked why, the dealer
  told him his debt was too high. Bills credit
  report showed the following
• 29,000 spent on appliances and furniture in the
  past month
• 4,000 spent on clothing in the past month
• An open equity line of credit on his house used
  to purchase an expensive, international vacation

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Case Examples

• New York, NY In 2003, an identity theft ring
  was charged with the largest identity theft scam
  in US history.
• The criminals operated the scheme for nearly
  three years
• They used information from the credit histories
  of more than 30,000 victims
• They charged large amounts to credit cards,
  emptied bank accounts, and obtained credit and
  personal loans
• The victims lost more than 2.7 million
• California and Oregon In 2006, Dollar Tree
  Stores customers began complaining about
  unauthorized debit transactions
• More than 800 accounts were accessed
• Losses totaled more than 700,000
• Information loss at point of sale

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Case Examples

• Michelle Brown Was alerted to identity theft
  when a Bank of America representative called her
  about missing the first payment on a new truck.
  She went on to find out
• Her rental application was stolen from the
  landlords office in January 1998
• The thief set up cellular telephone accounts,
  phone and utility services
• The thief applied for department store credit
  cards
• The thief applied for timeshare financing
• The thief purchased a 32,000 truck
• The thief received 5,000 of liposuction services
  from a surgeon on credit
• The thief rented apartment properties

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Case Examples

• The thief received a drivers license in the name
  of Michelle Brown
• The thief presented the drivers license and
  identified herself as Michelle Brown when
  arrested by the DEA and before a Federal Judge
  when caught trafficking 3,000 pounds of
  marijuana.
• The thief did not make a court appearance and a
  Federal arrest warrant was issued. The thief was
  a fugitive for six months.
• The real Michelle Brown was detained (three
  months after the fugitive was caught) by Customs
  at LAX because her passport was flagged as a
  fugitive. She was released a few hours later.

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Questions and Answers

• Michael Vian
• Senior Manager,
• Forensic Services Group
• mvian_at_crowechizek.com
• Telephone [phone]