Skimming, phishing, pharming

Card fraud could get worse

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A leading academic says identity theft is on the increase using a number of new techniques.

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

According to credit reporting agency Veda Advantage, for the year 2008-2009 there were more than 7000 incidents of fraud and false pretences using credit and bank cards as well as credit by fraud. The company, which sells identity theft insurance, says an identity is stolen every two seconds in the United States.

"The subject raises interesting conceptual questions as well as the practical problems of legislating, investigating and prosecuting these types of offences," Farrar said.

"The techniques of identity crime are well known, yet surprisingly little work has been done on profiling this type of fraudster, although there is general agreement identity crime is now being perpetrated by organised crime, which is operating on an international basis."

Most people will have heard of skimming, where the victim's credit card details are stolen, usually doing something legitimate. Another common method of identity theft, phishing, involves bogus emails purporting to be from banks or credit card companies. Vishing (voice/phishing) uses a phone or VoIP to steal identities.

Another method, dumpster diving, involves searching people's rubbish for personal or commercial documents. "Of particular concern recently has been crime syndicates getting access to documents relating to accounts of superannuation fund members and initiating fund rollovers to fake self-managed superannuation funds," he says.

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.

Part of the solution is understanding the sort of people behind these types of crimes. The only work he knows on this in Australasia is a 2003 study on serious fraud by the Australian Institute of Criminology and PricewaterhouseCoopers.

General characteristics of the serious fraudster revealed 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 convictions.

- © Fairfax NZ News