Invasion of the Identity Snatchers, Part Two

By John Langione, CFE, CIA, CLU;Dr. Craig Ehlen, CFE, CPA;Dr. Robert E. Holtfreter;Dr. Thomas Buckhoff, CFE, CPA;Amy Southwood

Though identify theft is growing precipitously, the problem isn't untenable. Fraud examiners need to know current statistics and methods so they can fight this insidious crime. 

(Editor's note: This article is derived from a paper prepared under the auspices of the Association's Research Committee. The members of that committee, chaired by David S. Partridge, CFE, CFSSP, were: Dr. Thomas Buckhoff, CFE, CPA; Dr. Craig R. Ehlen, CFE, CPA; Marikay Hines-Corcoran, Esq., CFE; Michael J. Flores, CFE, IIA, ISACA; Dr. Robert E. Holtfretter; John Langione, CFE, CIA, CLU; Scott B. Moritz; Kent Smalley, J.D., CFE, CCP; Donna Ingram, CFE, CPA; and Dr. Debra E. Ross.)

After reviewing identity theft statistics in the July/August issue of The White Paper, we'll
now further study how thieves worm their ways into unsuspecting lives.

From the Postal System 

  • Thieves steal bank and credit card statements, pre-approved credit offers, telephone calling cards, and tax information from mailboxes.
  • Thieves submit false change-of-address forms to divert mail to locations of their choices.
  • When mail is delivered to places where others have ready access to it, criminals simply intercept and redirect the mail to other locations.
  • Postal employees or others steal mail from mail processing areas.
  • Thieves steal envelopes containing bills and checks from mailboxes.

From Purchase of ID Information 

From people with access:

Criminals buy personal information from "inside" sources. For example, identity thieves may pay store employees for information that appears on applications for goods, services, or credit.

In March 2001, the U.S. Attorney's Office in the Southern District of Texas announced the sentencing of two former employees of the Houston Office of the Social Security Admin- istration (SSA) after their convictions for conspiring to defraud the SSA between January 1998 and May 1999. During their plea agreement, the perpetrators admitted entering personal information from social security applications into the SSA computer database that caused social security cards to be issued to more than 200 individuals who weren't authorized to receive the cards. The fraudsters also admitted to obtaining personal background information from the SSA computers and providing that information to others to help them commit credit card and immigration fraud.1

From thieves:

Thieves steal personal information from purses and wallets and sell it to accomplices who use the information to purchase merchandise and services.

From credit bureaus:

Crooked proprietors of Web sites sell social security numbers (SSNs) and accompanying information from SSN applications. Credit reporting agencies sell this information, as part of "credit headers," to information brokers. Credit headers include names and name variations, current and former addresses, telephone numbers (including unlisted numbers), years and months of births, and SSNs.

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