The Raising Concern of Identity Theft

The Raising Concern of Identity Theft

12 Mar, 2023

The Raising Concern of Identity Theft

Author – Jaya Mahaty Mandalaparthy, Student at Alliance University

ABSTRACT

What started as a physical crime escalated into one of the most common crimes of the current century, identity theft, closely related to identity fraud, is stealing another’s identity. Though it was not for economic gain initially, identity theft is known for drowning a person in debt without their knowledge. Experts say that every 22 seconds, someone falls prey to identity theft. Identity fraud is using stolen information to commit crimes in their name. From killing the person to defrauding them over call, a civilization evolved in various industries, and so did the ways to mount another’s debt. The Reserve Bank of India declared that digital fraud was a significant challenge in 2021, with the wave of UPI and digital currency COVID-19 brought in. With the mounting problem at hand, it is paramount for governments across the world to protect their people from these scams. Millions of families suffer each year and incur such a huge loss that it takes their entire lifetime to repay. Though the Information Technology Act of 2000 covers this, it raises the question of whether it covers most, if not all, types of theft that can be committed. This article aims to inform the readers about identity theft and identity fraud, the ways through which it was, and continues to be, perpetrated. We also discuss the relief and protection provided by the Indian government and the precautions one can take personally.

Key words: identity theft, crime, loss, protection, scam.

INTRODUCTION

Identity theft, often overlooked as a good joke in a TV show, is in fact a major crime. According to Oxford University, identity theft is the fraudulent practice of using another person’s name and personal information in order to obtain credit, loans, etc. The United States Department of Justice defines identity theft and identity fraud as “terms that refer to all types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain.” In a survey conducted by The Economic Times, it was found that found that “61 percent of respondents feel well-protected against ID theft but 63 percent would have no idea what to do in case of an identity theft, and more than three-quarters (79 percent ) wish they had more information on what to do if it were to happen.” [1] This begs the question: despite such a large number of reported cases, why is most of the population ignorant about this issue?

Types of Identity Theft

It is very had for one to group types of identity theft and fraud into clusters per se. However, it has been divided into three major groups: medical, financial and online identity theft. In my opinion, it is more profitable to simplify these ideas in layman terms to help spread awareness of these scams and preventive measures. Hence, mentioned below are easier groupings of most types of identity theft and fraud. It is to be noted, however, that identity theft and fraud are different.

Starting off with financial identity theft, it is the use of another’s personal details for economic gain. It includes a variety of frauds, ranging from account takeover to online shopping. An identity thief who gains control of your accounts, one or more, is known to have committed account takeover fraud. According to Marianne Hayes, a freelance finance writer, the thief then uses this account to create or gain access to additional accounts, transfer money, etc. Debit or credit card fraud occurs when someone uses your card without your knowledge. In today’s majorly digital world, the criminal doesn’t need to carry this out physically. With access to your card number, pin and security code, making unauthorized transactions is pretty easy. This is a blow to one’s credit score, which curtails one’s ability to apply for loans among other issues. Tax identity theft involves using personal information to file tax returns and get a refund that is rightfully yours.

Home title fraud, another type in this exhaustive list, is when one gains control of your assets by stealing your identity and changing the ownership to their name. They then use this property for access to loans and lines of credit. If a thief takes out a second mortgage or a home equity line of credit, which is used for large costs as an alternate to credit cards, he is committing mortgage fraud. This also includes omission of vital information by the buyer, seller or lender of an asset that leads to mortgage loan, which if initially informed, would prevent the applicant from showing interest. [2]

Stealing of one’s personal documents or IDs: A lost or stolen passport is yet another medium through which fraud is committed. In the dark web, valid passports are sold at exorbitantly high prices as it helps criminals in falsifying travel document. Losing your driver’s licenseis probably the least concern you have when your wallet or handbag is stolen. This gives leeway to thieves to gain your information such as your address from it and furthermore use the ID when committing crimes to falsely implicate you. Biometric identity theft is stealing or spoofing one’s physical traits to unlock a device, as in face or voice recognition. This is a goldmine for hackers who take this opportunity to tap into the user’s other devices.

Age of the victim: The elderly are an easy target for fraudsters and are often called under the guise of a government body to gain trust and collect personal information. People above the age of 60 are reportedly the most common victims of identity theft. Children are subject to this crime too, usually by their own family. Their birthdays, addresses, and social security number in the case of USA, are used to pen fraudulent account and take out loans in their name. When the child grows up, he is forced to deal with a mountain load of credit, which he isn’t sure how he racked up. Medical identity theft is carried out to obtain free medical under another person’s name, and the elderly are usually the party harmed. According to the Identity Theft Research Center, the health care sector had the second highest number of data breaches. [3]

Medium through which the scam is carried out: Mail identity theft and online shopping fraud are examples. While some con artists steal checks out of mailboxes and misappropriate the funds, others intercept cards and max them out. In online shopping fraud, on the other hand, the scammer obtains one’s saved card information in online shopping portals and make unapproved purchases. The Reserve Bank of India declared that digital fraud was a significant challenge in 2021, with the wave of UPI and digital currency COVID-19 brought in. With the mounting problem at hand, it is paramount for governments across the world to protect their people from these scams. There is also ‘shoulder surfing’, where [4]

Employment identity theft, as its name suggests, is using another’s identity to secure a job title. Synthetic identity theft, according to McKinsey & Company, is the fastest growing in the U.S. this type of fraud is quite creative, various people’s information is compiled and used to create a new person, who does not even exist in reality. Showing the good credit score of this ‘person’, criminals are able to apply for loans, credit, etc. [5]

Although all the aforementioned acts ae criminal in natural, criminal identity theft is specifically when an arrested individual gives someone else’s details instead of their own. This often goes unnoticed until these petty arrests stack up to the arrest of the victim.[6]

Which time period does this crime date back to?

As to its origins, identity theft started as a violent crime. Criminals killed their victims before stealing their identities. After disposing of the body in a safe manner, the criminal would just steal the victim’s name, social security number, and other private data. The motivation was typically more about acquiring a new identity than it was about making money.

As technology advanced, so did the methods to defraud people. Using monetary rewards as an incentive, they would ask for personal details for ‘verification.’ Since news of such scams hadn’t spread to the general public yet, they happily handed over their privy details to the identity thieves on a silver platter. Instead of a huge check in their bank account, they ended up with ruined credit and a lifetime of misery.

When telephone fraud became known to one and all, fraudsters looked for new ways to steal identities. They began going through the trash in hopes of stumbling upon credit card and bank statements. The unsuspecting public of the 80s did not even know trash would be their downfall. We could say that one man’s trash is, in this case, another man’s gold. This era of identity theft faced a strong opponent: the paper shredder. When news of this type of fraud spread, people began investing in paper shredders to keep their bank accounts safe.

With a boom in the internet and technology, online receipts and online banking, going through the trash wasn’t a viable option for thieves. Now, they had a new and more extensive source to steal people’s identities. Often referred to as ‘The Internet Age’, this is the current chapter of identity theft. Even though identity theft has evolved massively, the ultimate goal remains to steal personal details for money. A report by FTC states that over 62% of all identity, frauds occur over the internet. Now, the criminal doesn’t have to see or speak to you to profit from you. Identity theft evolved from ‘a crime of proximity to a crime of remoteness.’ Now that scams, especially those via email, have been reportedly experienced by most internet users, it is time that we perceive identity theft as a threat.

In 2022, Netflix released a documentary titled The Tinder Swindler, revealing the scams carried out using a dating app. Shimon Hayut, a 32-year-old Israeli man who posed as a wealthy businessman on Tinder to lure in unsuspecting women. He would spoil them with expensive gifts and fly them around the world like a perfect boyfriend. A few months into the relationship, he would tell his then-victim that he was getting targeted by his ‘business rivals’ and emotionally manipulate the woman into taking out large amounts under their name. He made three women incur a loss of nearly $10 million. They are now under crippling credit card debt. While cases like The Tinder Swindler are evidently present in society, it is astonishing as to how many people are unaware of its existence, let alone reporting and recovering from it. [7]

Statutes in India against identity theft and fraud [8]

The Indian Penal Code provide protection to victims of identity theft and fraud through the following statutes:

  1. Section 464- fraudulent alteration or cancellation of a document in any manner
  2. Section 465- if a person commits the fraudulent act, he shall be liable to pay fine and/or serve jail time for up to two years.
  3. Section 468- if a person uses a forged document for cheating another party via a fraudulent act, he can be sentenced to up to seven years in jail along with a fine.
  4. Section 469- if a person falsifies a document and then uses it to damage another’s reputation, they could receive a jail sentence which may extend up to three years, as well as a fine.
  5. Section 471- if a person forges a document with the goal to portray it as legitimate, they will be penalized.
  6. Section 474- if a person is in possession of a forged document, is aware of its unauthenticity and intends to use it under the veil of a genuine one would face a fine and a prison sentence of up to seven years.

The Information Technology Act under Sections 43, 66, 66B, 66C and 66D prosecutes identity thieves. They state that any person committing forgery,

What can I do?

At this point you might be asking yourself: ‘what personal precautions can I take to reduce my chances of fraud, if not eliminate them?” It is, indeed, better to be safe than sorry. Here are a few basic guidelines that are suggested to be followed to defend yourself from identity thieves and con artists:

  1. Regularly review charges on your card and insurance. If any discrepancies are found, report it to your bank, Card Company, or insurance company immediately.
  2. Never give out personal information to unknown sources who are trying to contact you via email, call, message, etc.
  3. Constantly check your credit report along with your close family’s, such as your parents or children.
  4. Shred paper documents containing your details before disposal.
  5. Use strong or unique passwords for your accounts. Ensure not to repeat passwords as once a scammer knows your login information he would use it for other websites as well.
  6. With respect to a mortgage, ensure that you collect information to confirm wire instructions and confirm the receiving party’s account details before transfer. Verify the transaction after completion for complete safety. [9]
  7. File a police report for identity theft at your nearest police station or the cyber-crime unit.

Conclusion

When a party with a major motive to cause loss or steal assets from another party seeks to steal their private information, it is known as identity theft. Using this unlawfully gained material to cause the actual act of harm or loss is called identity fraud.

Every year, 1 in 20 Americans has their identity stolen and one in three Indians have faced identity fraud, according to a recent cybercrime report. Bengaluru, now named India’s identity-theft capital, has accounted for a whopping 72% of all identity theft cases registered across 19 metropolitan cities of India.

 Identity theft not only causes financial harm but also emotional, physical and social distress to the victim. In a 2016 survey by ITRC, victims of identity theft showed evident signs of physical and emotional turmoil. They developed anxiety, fear associated to their personal and familial financial safety and even a slim margin felt suicidal. It is high time that identity theft and fraud be taken seriously by the general public. Just because you haven’t been affected by it yet neither ensures your safety nor does it give you immunity. Hence, taking proper precautions as well as staying up to date in regards to cases in the same regard would prove beneficial in the long run.

REFERENCES

  1. Identity Theft / Identity Fraud, Justia (Apr. 25, 2018), https://www.justia.com/consumer/docs/identity-theft/.
  2. ET Bureau, 4 in 10 Indians have experienced identity theft: Report, The Economic Times (Apr. 7, 2020), https://economictimes.indiatimes.com/tech/internet/4-in-10-indians-have-experienced-identity-theft-report/articleshow/75029916.cms.
  3. The Most Unbelievable Identity Theft Stories of All Time, Aura https://www.aura.com/learn/identity-theft-stories-cases.
  4. https://www.justice.gov/criminal-fraud/identity-theft/identity-theft-and-identity-fraud
  5. Full Bio, What Is Identity Theft? Definition, Types, and Examples, (Sept. 21, 2022), https://www.investopedia.com/terms/i/identitytheft.asp.
  6. Marianne Hayes, The Many Different Forms of Identity Theft, Experian (Sept. 29, 2020), https://www.experian.com/blogs/ask-experian/20-types-of-identity-theft-and-fraud/.
  7. Identity Theft Resource Center®’s Annual End-of-Year Data Breach Report Reveals 17 Percent Increase in Breaches over 2018, ITRC https://www.idtheftcenter.org/post/identity-theft-resource-centers-annual-end-of-year-data-breach-report-reveals-17-percent-increase-in-breaches-over-2018/.  
  8. Matt Tatham, What Is Home Title Fraud?, Experian (Feb. 21, 2019), https://www.experian.com/blogs/ask-experian/what-is-home-title-fraud/.
  9. Identity Theft, https://www.legalserviceindia.com/legal/article-3064-identity-theft.html.
  10. Eugene Bekker, What Are The Odds Of Your Identity Being Stolen? | IdentityForce® | IdentityForce®, We Aren’t Just Protecting You From Identity Theft. (Apr. 15, 2021), https://www.identityforce.com/blog/identity-theft-odds-identity-theft-statistics.
  11. Rakesh Prakash, Bengaluru is identity-theft capital of India: NCRB, Times of India (Aug. 30, 2022), https://timesofindia.indiatimes.com/city/bengaluru/bengaluru-is-identity-theft-capital-of-india-ncrb/articleshow/93865835.cms.
  12. Attention Required!, Cloudflare https://www.tribuneindia.com/news/jalandhar/jalandhar-resident-becomes-a-victim-of-identity-theft-405393.

[1]https://economictimes.indiatimes.com/tech/internet/4-in-10-indians-have-experienced-identity-theft-report/articleshow/75029916.cms 

[2] https://www.experian.com/blogs/ask-experian/what-is-home-title-fraud/

[3] https://www.idtheftcenter.org/post/identity-theft-resource-centers-annual-end-of-year-data-breach-report-reveals-17-percent-increase-in-breaches-over-2018/

[4] https://www.justice.gov/criminal-fraud/identity-theft/identity-theft-and-identity-fraud

[5] https://www.experian.com/blogs/ask-experian/20-types-of-identity-theft-and-fraud/#s10

[6] https://www.investopedia.com/terms/i/identitytheft.asp

[7] https://www.aura.com/learn/identity-theft-stories-cases#1.-The-%E2%80%9CTinder-Swindler%E2%80%9D-who-scammed-lonely-lovers-out-of-millions

[8] https://www.legalserviceindia.com/legal/article-3064-identity-theft.html

[9] https://www.experian.com/blogs/ask-experian/how-to-avoid-mortgage-wire-fraud/#s3