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Source: Halton Crime Stoppers

Posted on March 16, 2004

      This past summer identity thieves did a number on a Toronto man we'll call Joe, in a devious and brazen fraud that ultimately cost about $20,000.

      They signed Joe up for new credit cards that he never applied for, then scammed their way into his on-line bank account to divert money to themselves. At one point, they intercepted a credit card mailed to Joe and used it to go on a shopping spree.

      "It's a violation," says Joe, who asked that his real name not be used. "There's this stress of wondering what possibilities there could be of other things happening. You keep thinking, where else are they going to get access to my personal life?"

      Identity theft is the latest trend in consumer fraud. PhoneBusters, an anti-fraud group set up by the Ontario Provincial Police, says there have been about 8,817 reporter incidents of identity theft across the country in 2003, up from 8,178 for all of 2002. The value of these thefts has risen to $14.1-million so far this year from $8.8-million last year.

      Mind you, these are just the incidents that came to the attention of police. There are countless other small credit card frauds that are never reported.

      There's no standard modus operandi for identity theft, but the starting point is always the same in that it involves someone acquiring private information such as a credit card number, a social insurance number or driver's licence number.

      Some identity crimes are as simple as someone at a store copying down your credit card number and expiry date, then using the information to buy things.

      Other cases involve a web of frauds that permit your financial assets to be drained through phony credit cards and bogus financial transactions.

      Joe's not sure how his personal information was taken. But he does know he was dealing with professionals who patiently executed an ever-expanding master plan.

      Stage One was signing Joe up for various credit cards. The thieves had enough of Joe's necessary personal information to satisfy some banks, while others rejected the fraudulent applications.

      One summer Monday, Joe's bank contacted him to talk about a large transfer of money from one of his credit cards into his chequing account, then subsequent transactions where about $17,000 was paid from the chequing account into several credit cards belonging to other people.

      Stage Two came a week or so later, when Joe's bank called to discuss what appeared to be a major weekend shopping spree on a newly issued credit card. Joe said he ordered this card as a replacement for one he had cancelled when it became obvious he was a victim of identity theft. "The guy went to a couple of movies, bought $3,000 worth of some type of equipment and then got declined at a LCBO [Liquor Control Board of Ontario] store," Joe recalled.

      He isn't sure how the card got into the wrong hands -- it was either plucked out of his mailbox or the thieves managed to divert it, possibly with a fraudulent change of address submitted to Canada Post. Joe eventually fought his identity thief to a standstill by changing all his bank accounts and credit cards, and by having his mail rerouted to a post office box.

      Fortunately, there was no financial cost to him. His banks ate the entire cost of the fraud. In fact, both Visa and MasterCard have what they call zero-liability policies for victims of identity theft and other frauds.

      "If consumers notice charges on their statement that they didn't authorize, then they will not be liable for them," said Gord Jamieson, director of risk and security for Visa Canada.

      About 80 per cent of identity frauds involve credit cards, said OPP Detective Staff Sergeant Barry Elliott, the co-ordinator of PhoneBusters. The other 20 per cent are what he calls "account takeovers" -- full-bore frauds such as Joe's where the thieves get access to your financial accounts.

      Det. Staff-Sgt. Elliott said account takeovers can go even further than Joe's did -- even to the point where the thieves take out a mortgage on your house. "There's really no limit to the damage they can do," he said.

      Preventing identity theft is a matter of doing your utmost to keep your private information private. Unfortunately, this is sometimes out of your hands.

      Det. Staff-Sgt. Elliott said most identity thefts start with data stolen or obtained through corrupt insiders at a company or office with access to private information. Ever heard about computer disks or hard drives being stolen from an office? It may be all about identity theft.

      If you're a victim of an identity crime, report the crime to your bank and/or credit card issuer, and to the country's two big credit bureaus, Equifax and TransUnion (both are listed in the white pages telephone directory).

      Equifax Canada president Rick Cleary said his company will put a flag on your credit file advising companies that you've been a victim of identity theft. Ideally, this would prevent credit cards and loans being issued to someone masquerading as you. Equifax will also work with you to clean up your file.

      Mr. Cleary estimated that Equifax flagged about 20,000 files in 2003, up from 12,000 in 2001. "Identity theft used to be a fairly rare occurrence, and now we've got 10 or so full-time staff that work on this," he said.

      To protect yourself, never provide your credit card number or social insurance number (SIN) over the telephone or in an e-mail unless you are absolutely confident that they are legitimate and responsibly run.

      "Your biggest risk is the video store down the corner," said Det. Staff-Sgt. Elliott. "Usually, they get quite a bit of info in order to rent a movie -- credit card numbers, SIN numbers, copies of their driver's licences. What security features do these little places have? Usually, none."

      If you're using a bank machine or debit terminal, keep prying eyes away from your personal identification number. Also, be careful what documents you put in your recycling bin. Thieves have been known to scoop banking documents from blue boxes and dumpsters. You can also inquire about monthly bills or statements that don't arrive on time. It may be a case of identity thieves diverting your mail.

      Another step is to request a copy of your credit file from Equifax or TransUnion every year. Your file will tell you if credit cards have been fraudulently issued in your name, or if credit-granters have been accessing your file as part of a phony request for a loan or card.

      Some people have shied away from banking or buying things over the Internet because they fear a security breach that could lead to lead to fraud. But Staff-Sgt. Elliott doesn't see the Internet as a particular danger. "There's nothing that's risk-free, but I'm not concerned about it," he said.

      Often, it's unauthorized transactions appearing on a monthly credit card or chequing account statement that tip you off to identity fraud. If you're the victim of a fraud where a false address has been used, you may not know there are bogus credit cards with your name on them until the unpaid accounts are referred to a collection agency. Eventually, a bill collector will follow the false information trail and back to you.

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