Identity Theft and Fraud : Evaluating and Managing Risk

Junlian Xiang, Ken Guo, Yufei Yuan, Susan Sproule, Norm Archer

Description

Personal data is increasingly being exchanged and stored by electronic means, making businesses, organizations and individuals more vulnerable than ever to identity theft and fraud. This book provides a practical and accessible guide to identity theft and fraud using a risk management approach. It outlines various strategies that can be easily implemented to help prevent identity theft and fraud. It addresses technical issues in a clear and uncomplicated way to help decision-makers at all levels understand the steps their businesses and organizations can take to mitigate identity theft and fraud risks. And it highlights the risks individuals face in this digital age. This book can help anyone – businesses and organizations of all sizes, as well as individuals – develop an identity theft and fraud prevention strategy that will reduce their risk and protect their identity assets.



To date, little has been written on identity theft and fraud with a Canadian audience in mind. This book fills that gap, helping Canadians minimize their identity theft and fraud risks.

Sujets

• Ebooks
• Ressources professionnelles
• Gestion et management
• Risk Assessment
• Gestion et management
• Insurance
• Economics
• Business
• Management

Informations

• Publié par: University of Ottawa Press
• Date de parution: 30 juin 2012
• Nombre de lectures: 0
• EAN13: 9780776619910
• Langue: English

Extrait

Identity Theft and Fraud
Evaluating and Managing Risk



Identity Theft and Fraud
Evaluating and Managing Risk
Norm Archer, Susan Sproule, Yufei Yuan, Ken Guo and Junlian Xiang
UNIVERSITY OF OTTAWA PRESS OTTAWA



University of Ottawa Press
542 King Edward Avenue
Ottawa, ON K1N 6N5
www.press.uottawa.ca

The University of Ottawa Press acknowledges with gratitude the support extended by Heritage Canada through its Book Publishing Industry Development Program, by the Canada Council for the Arts, by the Canadian Federation for the Humanities and Social Sciences through its Award to Scholarly Publications Program, by the EC Innovations company, by the Social Sciences and Humanities Research Council, and by the University of Ottawa.
eBook development by Wild Element www.wildelement.ca
ePUB ISBN : 978-0-7766-1991-0
© University of Ottawa Press 2012
LIBRARY AND ARCHIVES CANADA CATALOGUING IN PUBLICATION
Identity theft and fraud : evaluating and managing risk / Norm
Archer ... [et al.].
(Critical issues in risk management)
Includes bibliographical references and index.
Electronic monograph issued in multiple formats.
Also issued in print format.
ISBN 978-0-7766-1992-7 (PDF).--ISBN 978-0-7766-1991-0 (HTML)
1. Identity theft--Canada. 2. Identity theft--Risk assessment--Canada.
I. Archer, Norman P. II. Series: Critical issues in risk management (Online)
HV6685.C3I34 2012 --- 364.16’330971 --- C2012-903071-6



Contents
Chapter 1
Introduction
Chapter 2
Understanding Identity Theft and Fraud
Chapter 3
Risk and Trust
Chapter 4
Information Sources for IDTF
Chapter 5
The Nature and Scope of IDTF
Chapter 6
Measuring IDTF
Chapter 7
Managing the Risks of Data Theft, Identity Theft and Fraud
Chapter 8
A Lifecycle Approach to Identity Asset Protection
Chapter 9
Employee Responsibility for Risks to Identity Assets
Chapter 10
Consumer and Business Perspectives
Chapter 11
Technical Perspectives on Security
Chapter 12
Evaluating and Managing Organizational Readiness for Security and IDTF Risks
Chapter 13
A Research Agenda for Identity Theft and Fraud Risks
Chapter 14
Monitoring Trends: Indexes of Identity Theft and Fraud
Chapter 15
Overview of the Book and a Glimpse of the Future
Glossary
Index



Chapter 1 Introduction
“I don’t need to worry about identity theft because no one wants to be me.”
—Jay London
The information age has brought many benefits to consumers, organizations and government agencies. We have ready access over the Internet to a huge range of information that can satisfy just about anyone’s needs, we can communicate with people and organizations in ways unheard of even a decade ago, and consumers, businesses and governments can transact business over the Internet. But along with the speed and convenience of all these innovations has come an enormous increase in the incidence of related risks, such as identity theft, fraud and cyber-extortion by criminals. These criminals can work in anonymity from any country around the world, shielded from unsuspecting citizens and organizations by sophisticated techniques that continue to evolve constantly. The rapidly expanding availability of information and communications technology (ICT) has vastly increased the amount of confidential information at risk, exacerbating the potential for financial and reputational loss to firms and consumers alike through identity theft and fraud.
Identity theft and fraud (IDTF), whereby criminals use another person’s personal identity and other relevant information in unauthorized ways, have become a significant and growing problem throughout the world. There is much public confusion about the definition of identity theft. Because of this, we differentiate between identity theft and identity fraud in this book; the differences are explained in detail in Chapter 2. Briefly, identity theft involves the collection of identity information, like birth certificates and credit card identifiers, from the owners of that information. This is not always illegal, so legal systems have only recently started to recognize criminal forms of identity theft. Identity information may also be generated illegally (using fictitious IDs or manipulating one’s own ID). This is not identity theft, but it is a criminal activity. The actual use of stolen or bogus identities to commit fraud is defined as identity fraud , which is, and has been for many years, a criminal offense.
In the United States and Canada, identity theft and related forms of fraud have reached the level where they affect more than 4% of the population each year. As new methods of IDTF continue to appear, this rate may grow. A major reason for the rise in IDTF cases is the increased use of credit and debit cards, and commercial Internet applications, because of which identity information is more widely used and available in online databases and thus an easy target for criminals. These types of criminal activity have been dramatic and stunningly persistent (Anonymous 2007). Although consumers are entitled to free credit reports annually, credit file errors remain undetected and credit repair scams are growing in number. For many successive years, IDTF has ranked first in fraud complaints filed with the United States Federal Trade Commission (FTC). In 2009, these frauds accounted for 21% of the 721,418 complaints received by this agency. Similar concerns and results have been reported by Canada and other Western nations.
Although IDTF has become one of the top business, consumer and legal concerns of the information age, a more dangerous aspect than fraud is the possibility of physical danger, where terrorists can use identity theft to breach national security. Combating IDTF and thus protecting consumers and society as a whole is of urgent importance in maintaining a healthy economy and a stable social environment. Attacking this problem in an organized and focused manner requires a detailed understanding of the relative risks and costs arising from the many facets of IDTF.
IDTF is far from a new phenomenon, as the impersonation of officials and other individuals for the purpose of committing criminal fraud has plagued society for centuries. Over the ages, smugglers, pirates and other criminals have used aliases to hide their true identities in order to commit crime. For example, in the urban society of seventeenth-century London, England, when there was no photo identification and little by way of documented identification for commoners, people looked at dress, demeanour and symbols of office to determine identity, which gave an advantage to impostors of the day (Hurl-Eamon 2005). That environment eventually gave way to a society where, beginning with the upper classes, everyone had some form of identification available, such as birth certificates or passports. The first forms of identity theft merely involved stealing a person’s identity papers. Before the widespread use of consumer credit cards in the 1950s, this usually meant stealing passports, social security cards or other identification.
Credit Cards
Credit cards, reportedly first used in Europe for inter-business transactions in the 1890s, soon spread to other Western nations and were made available by banks to some of their credit-worthy business customers in the 1930s (Bellis 2008). Credit cards are a way to extend automatic credit to customers. In a modern economy, sellers offer goods and services to strangers in exchange for a promise to pay, based on systems that link the buyer to a specific account or credit history. While credit cards do not contain all of an individual’s identity information, they do provide access to the owner’s credit account, which makes them a frequent target of thieves. Like other entrepreneurs, thieves follow the money. Identity thieves acquire data about another person that enables them to counterfeit the person’s identification, so they can access goods and services by fraudulently charging someone else’s account. With the increasingly widespread use, by the 1900s, of credit, banking and utility accounts, various types of account fraud followed. Initially, credit cards could only be obtained by applying in person with photographic identification or by being vouched for by a bank manager. This made identity theft infrequent, but obtaining credit was cumbersome (IDTF History 2008).
Credit cards did not become a common source of personal financial information until the early 1980s in the United States, when the Fair Isaacs Organization developed the FICO system of credit scoring (FICO 2009). This system of rating a person’s reliability was often supplied in the form of a report that contained other sensitive and private personal and financial information. If an identity thief could gain access to such a credit report, it was a simple matter to access bank and credit card accounts.
During recent decades, credit cards have become easier to obtain. They are often, in fact, mass-mailed to consumers, with college students being a prime target. This has helped fraudsters to avail themselves of credit transactions on the Internet, as well as reap the bounty of automatic teller machines (ATMs). Ironically, a credit card is considered a superior form of identification, for both the legitimate owner and the thief. Hence, if another person has one in his or her possession and can display it to