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By L. Burke Files
Identity theft is a growing concern. It is a growing concern because it is a growing crime. It is growing in dollar amount per transaction, dollar amount lost per identity theft and the sheer number of ID’s being assumed.
This form of crime is also growing because
1. There is money in it
2. The likelihood of prosecution is low – almost zero, in fact.
3. Technology has made it easier to gather the information necessary to assume the ID
4. Fewer people are tied over the long term to a community and thus live a semi – nomadic life following job opportunities and spouses.
5. Merchants and banks err on the side of customer convenience as a matter of customer service.
6. Few merchants and banks train their employees to• be able to recognize counterfeit identification or. access device (credit, debit, etc… cards) documents.
7. The technology to produce fraudulent ID cards is so advanced that even those with training have a hard time telling the difference between real documents and computer generated documents.
What is Identity Theft?
Identity theft or identity fraud (true name fraud) is the taking of the victim’s identity to obtain credit, obtain credit cards from banks and retailers, steal money from the victim’s existing accounts, apply for loans, establish accounts with utility companies, make insurance claims, rent an apartment, file bankruptcy, obtain a job…all using the victim’s name.
The Impersonator steals thousands of dollars in the victim’s name without the victim ever knowing about it – for months or even years. Criminals have even recently used the victim’s identity during a traffic stop, to run for public office or to commit a felony.
How Does the Impostor Steal an Identity?
Unfortunately, it is all too easy. The only information necessary is a social security number, a birth date and other identifying information such as the address and phone number and whatever else they can find out. With this information, and a false driver’s license (so easily produced with modern computer technology) with the crook’s own picture, he can begin the crime of identity theft.
He may apply in person for instant credit or through the mail by posing as his victim. He often provide an address over which he has control. The recent legislation requiring identifiers on Mail Box Addresses has hardly slowed the serious crook down. Now he will simply rent an entire apartment — often in a less-than-desireable neighborhood where postal workers do not care to spend one second more than is absolutely required. Suddenly the victim has allegedly moved from 123 Ritzy Way to 456 Ghetto Center Drive.
Negligent credit grantors, in their rush to issue credit, do not verify information or addresses. So once the impostor opens the first account, usually an easy feat, he may use that first account along with the other identifiers to add to his credibility. This facilitaes the proliferation of the fraud. Now the theif is well on his way to getting rich and ruining his victim’s credit and good name.
Where Does the Impersonator Obtain Information About the Victim?
Lots of places. It might happened at the office of the victim’s doctor, lawyer, accountant, dentist, school, place of work, mortgage company, health insurance carrier, etc. The list is endless and the opportunities for fraud are many. Companies that do not dispose of such information with a shredder, offer a veritable pot of gold for a “dumpster-diver.” From dumpster to Sak’s can be less than an hour trip. The victim does not need to lose his wallet or have anything tangible stolen from him — an identity can be stolen without the victim and thief ever coming into physical contact with one another.
Some victims have only themselves to blame. A person who does not shred his confidential information, utility bills, credit card slips and other documents, can also fall prey to a dumpster diver. While a victim who exercises caution is less of a target … it can still happen to even the most careful person. Much of his personal information is readily available on the Internet, at courts, and readily accessible from public documents. Additionally, if a crook obtains his victim’s credit report illegally, he has all the information necessary to become his victim.
In a recent experiment, two investigators recently went dumpster diving right in front of a bank, at 12:30 in the afternoon, with ten or more patrons standing around. The investigators took the garbage from the trash can right in front of the bank’s entrance. From the material in the trash, they were able to establish the identities of four people, all with banking relations at that bank. To establish the identify of a person, it is necessary to have a full name, social security number, date of birth and residential information. From one bag of garbage, the investigators had four people’s mail and all of their bank account information, too.
Furthering the experiment, the investigators next contacted each of these potential victims and told them what had transpired One of the four consented to an interview and made a very interesting statement. “We spend all of our time locking our front doors and our cars to keep our
Possession from being stolen, and we pay little or no attention to having ourselves stolen.”
Solving the Problem
There is no easy solution, but there are some things that can be done. At the very top is education. How difficult is it to send the occasional mailing insert to our clients and policyholders? Some of the following information could go a long way toward putting the skids on this crime.
Trash – do not discard receipts anywhere except into a shredder. Dropping personal information into ANY OTHER TRASH CAN may result in an identity theft. Ribbon shredder’s are okay, but confetti shredders are better.
Mail – mail in mail boxes in front of a house or in gang boxes is vulnerable. Those wishing to avoid becoming victims should collect their mail promptly and/or rent a mail box with the Post Office — and have all sensitive bills and correspondence sent to the PO Box.
Vehicle theft – Crooks have found that the glove box is a treasure chest of information. Several people have suffered an ID theft that began after having documents stolen out of vehicles or having the full vehicles stolen with all of the documents contained in the vehicle. Think about how much personal information there is in a glove box! For those interested in minimizing their personal risk, the glove box should be cleaned out (to the bare minimum) and then securely locked.
Theft of a wallet of purse – There is not much that an individual can do about having her/his purse/wallet stolen. The key here is to act FAST. Crooks do not waste time, so neither should the victim of such a theft. A serious pickpocket has “connections,” and credit cards are quickly passed on. Crooks know that Ilse faster they act, the more damages (read: MONEY) they can cause.
Other things to instruct a client/policyholder:
Obtain a driver’s record and credit report copy every six months — at most every year — and review it for inaccuracies.
Avoid giving out so much information. If it is required, demand that the information be protected.
Keep Informed.
Stories From the Field:
1. For four long years, Richard Robertson couldn’t figure out why no one wanted to hire him. He handed department store managers across southern California a resume full of sales experience, but he was rejected hundreds of times. On the rare occasion he did get hired, he’d be fired within days. Along the way, Robertson filed for bankruptcy, lost his apartment and turned homeless. “For years, as this went on, I blamed myself — for not being hired for employment and for the conditions I went through,” Robertson says.
But Robertson’s self-blame turned to anger when he finally learned the cause of much of his trouble: A man had given Robertson’s identity to authorities when arrested for shoplifting and automobile insurance fraud, and the tainted profile found its way onto a range of computer databases used in employee background checks.
Robertson’s plight illuminates the growing threats to privacy in an age of ever- easier computer access to public information. An inaccurate black mark left on a person’s profile can be duplicated again and again without the victim’s knowledge. The personal details are easily and cheaply obtainable — and open to abuse by crooks trying to dodge the law or make a buck.
It used to be that to get background information, a trek had to be made down to a courthouse, the clerk had to asked for directions to the proper records and musty files had to be thumbed through. For another type of information, it was necessary to visit yet another government agency.
Today more and more information vendors have signed deals with governments and businesses for computer access that enables them to compile virtual dossiers on Americans — from Social Security numbers to shopping preferences — in a matter of minutes.
Crooks no longer have to look for crumpled credit card carbons to steal a person’s account number. Now, for nominal fees, personal details (such as Social Security numbers) can be found over the Internet and used to create a whole new identity. Joe Dishonest can be carrying Fred Honest’s full picture ID in a matter of sheer minutes. And he can be charging stereos, TV’s, diamond rings and more almost immediately.
Consumers Union in San Francisco found that half of credit-bureau reports surveyed in 1991 contained errors, and about 20 percent of which were big enough to prevent an individual from buying a home or a car.
“The information age permits the exchange of data so quickly and with so few safeguards, that you really become a victim before you know it,” says Edward Howard, head of the Los Angeles-based Center for Law in the Public Interest. “Not only do you become a victim, you’re constantly behind the curve when you’re trying to clean it up.”
(Richard Robertson, now 33, hardly foresaw the cyber-nightmare that would grow from what seemed an old-fashioned wallet-snatching in May 1990. He reported to police his wallet only contained $4 — along with his driver’s license, Social Security card and military ID for the Air Force base in southern California where he served as a reservist. BUT SEVEN MONTHS later, Robertson, a salesman in the Robinson-May department store in Riverside, was ushered into the ‘personnel director’s office and told he’d been caught shoplifting by security guards in another Robinson’s location. Robertson produced a letter from his commanding Air Force officer saying he was on duty when the crime occurred, but he was ultimately fired any way. He says he was equally confounded by the blur of job rejections that followed, usually with no explanation.
For two years he held on — Robertson’s work as a mechanic at the local Air Force base earned him about $700 a month. But in June 1993, the six-year reserve stint was up. With no job in sight, Robertson filed for bankruptcy to stave off bill collectors. He was evicted from his apartment in Amarillo grand jurors charged Jerome Joseph Griesmer with two counts each of false statements in a bankruptcy proceeding, false representation of a Social sec another person’s social security number. He was also indicted on one count each of making a false oath in a bankruptcy proceeding, dishonorably discharged in possession of a firearm and identity theft. Griesmer, 64, is accused of stealing the identity of Richard John Pachol of Dunkirk, NY, which he allegedly used from 1964 until his arrest last month. Federal lawmen began investigating Griesmer after he submitted a bankruptcy petition with Pachol’s name and social security number last year. Pachol charges that his credit was ruined by Griesmer for much of the past 20 years. The firearms charge seems to confirm investigators suspicions that Griesmer assumed another identity to avoid detection of a dishonorable discharge.
3. William O’Donnel lost his identity in 1994 in a Hollywood used-car dealership in which he had never set foot. That year, authorities told him,someone at the dealership probably dialed into the Equifax credit reporting bureau and rifled through electronic credit reports, looking for a. good target. The thief settled on O’Donnel, an aerospace engineer for Houston NASA. He copied .O’Donnel’s private information and sold it to an organized Nigerian crime ring. ‘They got my social security number, and they were off to the races,” O’Donnel said. Over the next four years, the personal data for O’Donnel and his wife was used to obtain 42
credit cards. The ghost O’Donnels racked up charges totaling $35,000 throughout south Florida. They bought everything from gas to groceries, leaving bill collectors to hound the real O’Donnels.
The ordeal came to an end only this year, O’Donnel said, after the couple filed suit against more than 20 creditors for negligence in issuing the cards. “People don’t believe you. That was the worst part,” O’Donnel said. “They treated you like you were some sort of real, slick crook.”
4. Jon Williamson is in his office, returning a phone call to Wells Fargo Bank. He figures it’s probably a question about a tax return he’s worked on. For a tax preparer and accountant, it’s just one more small item to be taken care of in a busy day, and the Saratoga resident doesn’t think much of it. He soon will.
The bank representative has bad news. She tells Williamson that his Wells Fargo credit card has run up $8,500 in charges, the payments are well overdue, and Williamson needs to put a check in the mail immediately Williamson is puzzled. “That can’t be,” he says. “I don’t have a Wells
Fargo credit card. I don’t even bank with Wells Fargo.” The representative takes a second to check her computer screen. The problem is with Williamson’s wife, Lori. She’s the one who opened up the credit card account, though she used Jon’s name and Social Security number and his job at H&R Block as references. Williamson is patient. He’s dealt with financial institutions for a long time. He’s accustomed to mistakes showing up in., computer files. He tells the Wells Fargo representative that he doesn’t have a wife named Lorie. He doesn’t have a wife at all. He’s been divorced since 1979, he says.
As he’s explaining all of this, Jon Williamson’s face bears the quizzical, slightly befuddled expression of a man who cannot quite believe his sudden run of bad fortune. Soon, the 48-year-old Williamson will have need of the disheveled detective’s considerable deductive skills.
On the phone with Wells Fargo, Williamson continues to insist that the whole thing is a mistake and the credit charges are not his. The Wells Fargo representative tell him that he will not be responsible; for the charges if a fraud has taken place, but he must sign an affidavit. She promises to send it in the mail. Before the affidavit arrives, Williamson gets another jolt of bad news: a notice that he has been denied credit from an application he made a few weeks before. Apparently, Wells Fargo has had a bad notice put on his credit card report.
Williamson immediately sends for copies of his files from the three big credit card reporting agencies: Equifax (formerly TRW), Experian and Trans Union. Williamson gets a terrible sinking feeling when the reports come back. “Lorie Williamson” has been having a ball as Williamson’s “wife.” She has run up charges at Nordstrom and the Outback and several local establishments. She’s flown to Reno on the Well Fargo card, tapping the cash-advance ATM a couple of times for good measure. She has opened up a charge account at Sears as Williamson’s wife, running up a $5,000 bill on that card. She has also gotten a Macy’s account, though she never gets around to charging anything. She’s applied for six other credit accounts, all of which have turned her down for one reason or another. Straightening all this up is clearly going to be a huge mess.
Williamson seeks religious guidance. His church pastor suggests that he might get assistance from the police department in Campbell, where Williamson lived at the time. Williamson eventually talks to a Detective who promises to look into the situation. But there the matter stalls. The Detective contacts Wells Fargo in early September. He is told that the bank has no knowledge of the matter and will get back to him. It never happens.
The Detective cannot talk about the matter to the press, but his supervisor confirms that under the rules of credit card fraud, Jon Williamson is not considered the victim — Wells Fargo is. Until Wells Fargo decides to act, the Campbell Police Department will not even investigate the case.
5. Gary Treadway was a Scottsdale, Arizona activist and decided to run for city counsel. It was in the middle of the race when he was asked a few questions by a Tribune reporter … about why his background didn’t check out. He couldn’t answer them. He than removed himself from the race for a city counsel seat citing – health reasons. The other paper in town broke the real story behind Gary Treadway. The Arizona Republic found out that his real name was Michael Mechanic and had he been convicted of a federal felony and had skipped out on bail while awaiting sentencing. Gary Treadway, the real Gary Treadway, was a victim of identity theft.
6. Mary Cavell (a/k/a Bloody Mary) was a pleasant and efficient figure in a property management office. She accepted, on behalf of her employer, over 30 applications a day for the rental of apartments and homes in the Phoenix area. Her job was to “screen” the prospective tenants before allowing them to rent. She had at her finger tips all of the information she needed — the rental applications included full names, social security numbers, dates of birth, current and past places of residence, job histories, etc..—plus the added bonus of a copy of the applicant’s credit report pulled as part of the process of screening the tenants. For those that passed the pre-tenant screen, they had to have good credit, no convictions and stable employment. Those very same qualities of the prospective tenants is what made them an excellent target for identity theft.
Mary spent the evening copying the applications and credit reports on these applicants and than went home and retyped them — so they would not be traceable to her. She than sold each of the sets of identity information to an organized crime ring for $50.00 each. She estimated that she was making over $1,000 per day — all of it in cash — culling and qualifying identifications for theft.
What did the crime rings do with the IDs? Everything conceivable! Some of the stolen IDs were used in auto insurance fraud. The same person would get into accidents two or three times a day and have a new ID each time he was rolled away in an ambulance. Chances were excellent that these purloined IDs would not show up in the AISG index system and a single use for a bogus claim did not set off any red flag indicators. So the crook sought medical treatment and was supplied with walkers, canes and wheelchairs from Medical Supply houses. And, of course, some of the information found its way into the hands of the fraud rings that specialized in credit card fraud and was used for shopping sprees.
Mary was not caught per se. She saw some officers visit the property management company and she beat a path out the back door. Her intuition was good. The cops only lead was that almost all of those who had a problem had a past credit inquiry from the property management company.
Mary went to Brazil with her money and did call her former employer to apologize, thank her for the work and explain that the money for selling IDs was just too good to pass up. Further investigation, much afterthe-fact, revealed that Mary Cavell did have two prior arrests and convictions for theft by deception. The property management company did not perform a background check on her prior to her hiring.
L. Burke Files is a financial investigator from Phoenix, Arizona. He can be reached at (480) 838-1728.
© 2000 John Cooke Fraud Report