Identity fraud takes new twists: academic

STEALING YOU: New research says identity theft is on the increase using a number of new techniques many of us may have never heard of.

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A leading academic says identity theft is on the increase using a number of new techniques many of us may have never heard of.

What is "dumpster diving", for example, or "vishing". What about "pharming"?

John Farrar, of Australia's Bond University and professor of corporate governance at Auckland University, says people using a false identity to commit a crime is of growing concern, not only to victims, but also to governments and financial institutions.

The cost of identity fraud in Australia has been conservatively estimated at A$1.1 billion ($1.35 billion).

"Only 38 per cent was identified as direct loss. The majority of costs related to resources to combat identity crime," Professor Farrar said.

The cost in Britain is also grim at a reported £1.2 billion ($2.63 billion).

Other research showed that in the United States, identity fraud was described as growing at 30 per cent a year, with losses of US$8 billion ($11.54 billion) by 2005, he said.

Figures in New Zealand, according to credit reporting agency Veda Advantage, show that for the year 2008-09 there were more than 7000 incidents of fraud and false pretences using credit and bank cards and credit by fraud. The company, which sells identity theft insurance, says an identity is stolen every two seconds in the US.

Most people will have heard of skimming, where the victim's card details are stolen, usually doing something legitimate. Phishing involves bogus emails purporting to be from banks or credit card companies.

Vishing (voice/phishing) uses a phone or VoIP to steal identities.

Dumpster diving involves searching other people's rubbish for personal or commercial documents.

Pharming is similar to phishing but rather than dangling for one or two victims, it aims at harvesting greater numbers via a hacking attack online redirecting victims to bogus websites.

Spear phishing is where a specific victim is tracked and trapped with a personalised approach.

A 2003 study on serious fraud by the Australian Institute of Criminology and PricewaterhouseCoopers gave general characteristics of the serious fraudster, revealing a mean age in the early 40s.

One fifth were female. Two-thirds were born in New Zealand and Australia and most had finished secondary education or had an undergraduate tertiary degree.

A majority were top-level management or stood in a professional relationship with their victim. A number had a previous criminal record (44 per cent) while more than a quarter had fraud offences.

And the motivation? Greed (40 per cent); gambling (23 per cent); financial strain – personal (21 per cent), and financial strain – business (19 per cent).

- © Fairfax NZ News