Public issues

Identity theft

Updated: 02 Mar 2007

Introduction

March is Fraud Awareness Month. We look at the most insidious form of fraud - identity theft - and find that government agencies could be doing more to protect us.

Plus, we explain how the identity thieves get your details, and provide some simple steps you can take to protect yourself.

The cost of fraud

Nobody knows the total cost of fraud in New Zealand. While there are many fraud cases reported, experts say much is unreported. Victims are notoriously reluctant to stand up, for obvious reasons.

Some are embarrassed, some want to protect their professional reputation. And some blind optimists genuinely believe that a bank in Nigeria really will pay them $25 million one day.

In a well-publicised case late last year an anonymous Manawatu mother and son squandered more than $200,000 in a typical Nigerian scam. The 71-year-old woman lost her $70,000 retirement savings and her son went into debt to pay the "Central Bank of Nigeria". They also took out a reverse mortgage on their home. Payments included $10,000 to investigate the scam itself. The pair remained adamant that the offer was legitimate.

Experts say cases costing hundreds of thousands of dollars are reported a couple of times a month, and smaller cases are more common.

Police statistics show most reported fraud cases remain unsolved. Through the decade 1996-2005 the clearance rate hovered between 43 percent and 49 percent. Even if you report a fraud that is investigated, you're still unlikely to get your case solved and even less likely to get your money back.

That's why prevention is essential. Once you have let yourself be defrauded, it's probably too late. Don't let it happen.

Consumer is one of the best sources for fraud prevention advice. See Our advice.

Fraud Awareness Month

Fraud Awareness Month is an annual campaign, from the Australasian Consumer Fraud Taskforce, to raise awareness of scams and other mass-marketed consumer frauds.

The campaign's tagline is, "Scams target you, protect yourself" and this year's campaign is on steps consumers can take to reduce or eliminate their chances of becoming victims of scams.

The Australasian Consumer Fraud Taskforce is made up of 18 Australian and New Zealand government agencies. The local agencies are the Ministry of Consumer Affairs and the Commerce Commission.

What is identity theft?

Identity theft occurs when someone gathers your personal information without your knowledge or permission.

Unlike other scams, it can strike without warning. By the time you've found out it's happened to you it can be too late.

According to Neighbourhood Support New Zealand: "Theft of your personal information takes many forms, from stealing your wallet to intercepting your mail. Once the thief has successfully assumed your identity there are many things they can do with it, from buying and using a mobile phone to writing cheques and opening a credit card account in your name."

An American lobby group, the Identity Theft Resource Center (ITRC), calls identity theft the US's fastest growing crime. It estimates 10 million people become victims every year in the States alone - that's 19 new victims every minute. The ITRC believes the rate of identity theft is increasing and says the US Justice Department rates it as the number one crime in the nation, ahead of drug trafficking.

How it works

A typical identity theft case works like this - someone pretends to be you and borrows money in your name. They don't pay it back. Then it's up to you to prove you didn't have the money and that you are who you say you are. It taints your good reputation and credit rating.

In the US there have been cases where it has made people homeless - with a poor credit rating you may not be able to get a mortgage, and if you end up with a criminal record you may not be able to rent. Victims can experience increased insurance fees, inability to find a job, and battles with collection agencies that refuse to correct records.

The ITRC says the effects of identity theft can last for more than ten years after the crime has stopped. Identity theft victims show the same symptoms as victims of violent crimes including rape, violent assault and repeated battering.

Here in New Zealand, police say victims can have ongoing problems trying to restore their reputation. According to the police's brochure 'When bad things happen to your good name': "Many victims need to expend large amounts of time and resources convincing banks, financial institutions and other agencies that they were not responsible for the fraudulent activity that occurred in their name. Many victims have also found difficulty in restoring their credit rating to what it was prior to the theft of their name."

Some protection

New Zealanders are given some protection by the Credit Reporting Privacy Code. This gives us certain rights when data are gathered and held in this country. The code:

limits the type of information that can be recorded about you
limits the people who can access your file and their reasons for looking
requires you to consent before a credit check can be made (in most situations)
gives you access to all your credit files
gives you the right to dispute inaccurate information and to make a complaint.

How they get your details

Slack procedures

Institute of Professional Investigators president Trevor Morley (pictured right) knows more than most about how people go about stealing identities. He believes slack procedures in government departments help identity thieves.

"I can go to Births Deaths and Marriages and get your birth certificate, and with that birth certificate I can go and get a driver's licence in your name. Now you've got a piece of plastic that 99 percent of New Zealanders will accept as your identification."

Trevor says passport applications are checked against death records but drivers' licence applications are not. "So you've got a problem that whilst you can do certain things to protect your identity, you've got government departments issuing documents in your name without your knowledge and there's nothing you can do about it."

Getting a copy of an Australian birth certificate is much more difficult than getting one here. In New South Wales, birth certificates are only available to the person named on the certificate, their parents or an authorised representative. Applicants also show three forms of identification. In Victoria the birth records are unrestricted after 75 years, but not if the person is still living.

Here it's a doddle. Anyone can purchase a certificate by providing a few details identifying the person and paying $26. No identification is needed and you can do it by mail order, phone, e-mail or fax. It's the same for marriage, civil union and death certificates - for less than $100 you can collect the set.

Marguerite Fahy, senior communications advisor for the Department of Internal Affairs' Identity Services, says birth certificates are not intended to be used as a form of identification.

But Land Transport New Zealand accepts them as primary identification for a driver's licence, and only requires some addressed mail as secondary ID.

This is a clear case of one government organisation contradicting another, and shows that both organisations need to tighten their rules and do it quickly.

The Births, Deaths, Marriages and Relationships Amendment Bill is currently before Parliament. It proposes restricting access to your records.

Morley also believes car ownership details are too easy to obtain in New Zealand.

"You see a pretty lady in a car and wonder who she is, so you note the registration number. You can go down to the Post Shop, pay your money and get her full name and address. Now is that right? I don't think it is."

Neither do we. This might have been OK once, but today it's dangerous and unacceptable. We believe access to vehicle registrations and to birth, death and marriage certificates must be restricted urgently.

Other sources of personal information

Your rubbish is a traditional source of information for identity thieves. Bank statements and bills are obvious sources of personal information, but Neighbourhood Support says you should be careful with any card or document carrying personal details.

Another, cleaner, source of personal information is your laptop or PDA. If yours fell into the wrong hands, what would it say about you? Storing personal or business accounts, tax numbers and correspondence on a computer is common and can provide a concentrated and portable information source for the identity thief.

Our advice

If you think you're a victim

The first thing to do is contact the police. Then contact every financial institution you use, as well as utility companies. Get a credit check done by a credit agency and compare it with your records or your most recent credit check. You may be able to get help from Victim Support.

Staying safe

Make a habit of running a credit check on yourself once a year. You can also request a copy of your records from loyalty schemes, banks, government departments and anyone else who is gathering information about you. Most sources recommend checking your records at the same time each year. Look for transactions you don't recognise or remember.
Never throw out bank statements, tax statements, bills or anything else with your name, account number or customer numbers on them. Shred or burn them, or keep them filed.
Don't have your name on the letterbox - have a "No junk mail" sign instead. A full letterbox invites people to look through it and also sends the message you're not at home. Put a lock on your letterbox if you're worried about the security of your mail.
Be careful about giving personal details to anyone over the phone, internet or e-mail, especially if they have come to you.
Keep personal information off your computer by storing it on CD or memory stick instead.

We say

It's ridiculous that some government organisations accept birth certificates as evidence of identity. Given the ease of getting any New Zealand birth certificate, we don't think any organisation should accept them as ID evidence.

More help

From consumer.org.nz

Other useful resources

Report by Martin Craig.