Identity Crime

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The ability to hide true identity is critical to the successful operation of organised crime groups. Identity theft is one of the fastest growing crimes in Australia.

Nature of Identity Crime

Identity crime encompasses the theft of identity information and related financial information, the assumption of another identity for fraudulent purposes, and the production of false identities and financial documents to commit crimes.

While stealing someone’s identity is a crime in itself, identity theft also provides a foundation for other serious crime. Fraudulent identities may be used for money laundering, tax evasion, to obtain personal loans, enter into credit agreements, deal in stolen motor cars, or to protect the true identities of organised crime members.

Identity crime is not new. However evolving technology continues to be adapted to traditional identity crime methodologies. New technologies already provide improved opportunities for transfer of personal and financial data. The storage and exchange of this information through the use of computers and mobile phones has allowed criminals to increase their crime rates and the number of their victims.

The anonymity of the Internet makes it an ideal channel and instrument for many organised crime activities.

As a result, identity crime has become one of the fastest growing crimes in Australia.¹

Extent

Data on identity crime from private sector businesses is sometimes difficult to come by. Businesses are often reticent to disclose losses from fraud as they may be seen as management failures that may ultimately transfer to loss of stock values, litigation or the removal of executives or boards.

However, Australian Government agencies have provided an indication of the scope of identity crime. While the extent and severity of identity theft and fraud in Australia are difficult to pinpoint, a 2003 study commissioned by the Australian Transactions and Reports Analysis Centre (AUSTRAC) suggested identity fraud costs the Australian economy $1 billion every year.² A 2007 survey conducted by the Australian Bureau of Statistics also revealed that identity fraud accounted for almost 500,000 victims over the 12 months prior to the survey.³

A number of Government agencies report on identity crime and their response measures. Centrelink, for example, reported $19.7 million was recovered in 2007–08 as a result of identity fraud investigations which led to prosecutions. It also reported that in 2008-09 it carried out 3873 identity-related fraud investigations resulting in $15.1 million in debts and savings.

Impact

Identity crime causes financial damage to consumers, lending institutions, retail establishments and the economy as a whole. Among its other impacts, identity crime:

• fuels other criminal activity
• erodes trust in service providers
• causes emotional distress for victims
• increases investment in time and resources by law enforcement
• increases business investment in methods of securing customers’ private information
• causes business/individual financial losses that are never recovered
• can threaten the safety of people who may have data exposed
• can lead to innocent people being refused employment, denied credit, receiving bills for items not purchased by them or even arrested for crimes they did not commit.

How Identity Criminals Work

Organised criminal groups capitalise on every opportunity to exploit new technology to commit identity crime. They will use professionals or facilitators to help them commit their crimes. They may use information technology specialists, people who specialise in identity theft or someone to steal the credit card numbers and then hand it off to someone who makes fake cards.⁴

Identity thieves use a wide range of methods:

• Stealing a wallet or purse—to gain access to identity documents such as drivers licences, bank cards and membership cards.
• Riffling through rubbish—looking for bank and credit card statements, pre-approved credit offers and tax information, even old gas and electricity bills that can contain personal information. Criminals have also realised that dumped or resold computers may contain files and data that can be used for financial gain.
• Mail forwarding—filling out a change of address form to redirect mail to them to gain information.
• unsolicited contact—phone calls claiming to be from banks asking to update personal information, or criminals posing as market researchers.
• Card skimming—when someone at a commercial business copies information from the magnetic strip on your credit card as a purchase is made. They often then sell the information to professional criminal gangs. This may also take place at an automatic teller machine (ATM) where an electronic device attached to the machine ‘copies’ the data from the cards and the personal identification number (PIN) that is entered is observed via a hidden camera.
• Internet sites—sharing personal information to gain access to websites and buy goods. Criminals can take the personal information to fraudulently obtain credit. Social networking sites also present opportunities. While people don’t present personal information to strangers in the street, they will build online profiles that include detailed personal information such as their birthday and age, residential suburb, relationships and life stories.
• Phishing—sending an email to a user that falsely claims to be from an established legitimate business in an attempt to trick them into revealing private information so the criminal can obtain money from accounts.
• SMiShing—Phishing via short message service (SMS).
• Corporate identity theft—by accessing publicly available company records, criminals can change names of company principals and registered addresses. They can then trade off the back of the real company’s good name and obtain goods and services on credit from suppliers, lodge tax returns and gain tax refunds, or even take money from company bank accounts.
• Impersonating a deceased person— criminals may note the age, date of birth and address of deceased people from announcements relating to the death or funeral and use those identities to commit crimes.
• Shoulder surfing—thieves observe people at ATMs while they are keying in their PINs or listening in while a person provides credit card numbers to a person at the other end of their mobile phone.
• Hacking—unsolicited access into a financial institution’s website to obtain e-banking details of customers or using keylogger programs to target online chatrooms and instant messaging systems and gain personal information.
• Lottery—a scam where a person is advised that they have won a lottery they have not entered. They are then asked to provide personal information to prove their identity and/or send a fee or bank account details in order to collect the prize.

Links to Serious Organised Crime

Identity crime is often a common element of other organised crime including:

• large scale organised theft
• dealing in stolen vehicles
• illegal immigration
• fraud
• money laundering
• terrorism
• illicit drug trafficking.

Identity crime can also be used to obtain telephones, vehicles, premises and travel documents to avoid law enforcement detection.

Government Response

The Australian Government launched the Organised Crime Strategic Framework in November 2009 to ensure Commonwealth agencies are working together to prevent, disrupt, investigate and prosecute organised crime. As part of the Framework, the ACC has produced two biennial classified Organised Crime Threat Assessments (OCTAs) which identify the highest organised crime threats to the Australian community. The OCTA informed the development of the Government’s inaugural Commonwealth Organised Crime Response Plan (OCRP) in 2010 to help prioritise Commonwealth agencies resources against these threats.

Recognising that organised crime is a national issue that requires a nationally coordinated response, the Commonwealth and the States and Territories agreed to the National OCRP 2010-13 in 2010 to strengthen multijurisdictional approaches, coordination, information sharing and joint activities to combat the national threat of serious and organised crime. Preventative partnerships with industry and the community are part of the strategies to respond to organised crime. These organised crime fact sheets describe the breadth and impact of organised crime activities and provide an insight into how industry and the community can help combat organised crime.

Further information on the Organised Crime Strategic Framework and the OCRP can be found here <http://www.ag.gov.au/CrimeAndCorruption/OrganisedCrime/Pages/default.aspx>.

This fact sheet was developed in collaboration with Attorney-General's Department, Australian Customs and Border Protection Service, Australian Taxation Office, Australian Transaction Reports and Analysis Centre, Australian Federal Police..

Endnotes

1. Australian Bureau of Statistics 2008, Personal Fraud Survey, Australia 4528.0, 27 June.
2. Cuganesan, S & Lacey, D 2003, Identity Fraud in Australia: an evaluation of its nature, cost and extent, a report by Standards Australia International Ltd (SIRCA), commissioned by AUSTRAC.
3. Australian Bureau of Statistics 2008, Personal Fraud Survey, Australia 4528.0, 27 June.
4. McAfee 2007, Virtual Criminology Report: Cybercrime: The Next Wave.