Identity Fraud: It’s personal

By Bonnie Staring

A UNIVERSITY STUDENT in Edmonton was in shock when the call came. On the other end of the line was a rep from a phone company. They were demanding she pay her outstanding bill. “What bill?” she said. The one for $3,500, they replied. She was so floored by the amount that she hung up on the caller—she thought it was all a scam, intended to get her to pay money she didn’t owe.

But the company called back, threatening to involve a collection agency. They provided her with the details—more than 30 pages of charges. She was aghast after reading page after page of unknown numbers.

Eventually, she discovered someone had used her Social Insurance Number and her date of birth to open up an account, racking up thousands in charges. She filed a report with the police but it took a lot of time and effort before she was able to clear her good name.

This is one of the defining crimes of the digital age—and like that university student, we’re all at risk. The most important thing to know about identity fraud is that it can happen to you. Almost daily, we’re encouraged to offer up our personal details in exchange for products and services. We give our credit card numbers to cashiers and online retailers. We allow apps to access data on our smartphones. We share vital information with banks and government agencies.

In doing so, details about our lives are distributed to myriad files and data- bases, enabling an increasingly sophisticated type of criminal. Identity-related crimes, as Canada’s Department of Justice refers to them, include the theft and trafficking of personal information (a.k.a. identity theft), as well as the actual use of that information “to gain advantage, obtain property, disadvantage another person, avoid arrest or defeat or obstruct the course of justice” (a.k.a. identity fraud).

The Canadian Anti-Fraud Centre reveals that more than 20,000 victims reported a combined loss of nearly $10.5 million in 2014. Fortunately, the problem’s prevalence means it’s now in the spotlight. Public awareness has grown—you’re reading this article, after all—and sentences for those convicted of identity theft and fraud are also increasing. “Canadian courts are becoming more aware of the impact that these types of crimes are having on people,” says Edmonton detective, Bill Allen, of the city’s Economic Crimes Section.

The question is: How do you protect yourself from being defrauded in the first place?

Detective Allen emphasizes that criminals who commit identity fraud prize the holy trinity of ID: birth certificate, Social Insurance Number and driver’s licence. “Even Service Canada, which issues SIN cards, advises against carrying it on you,” he says. “Memorize the number instead because the card has few, if any, security features, and it can be used as secondary ID for a bank account.”

If a criminal comes into possession of your wallet, he or she is not just going to go on a spending spree. “The bad guy can then determine where you bank, go to a different branch and claim to have lost his debit card,” Allen explains. “The bank will ask for ID, so he hands over a [fake] driver’s licence and your SIN card. Since everything matches what they have on file, the bank employee issues a new debit card, asking the fraudster to input a new PIN.” The criminal has now taken over your identity.

In many cases, it doesn’t stop there. The fraudster can then go to other financial institutions to open new bank accounts, credit cards and even lines of credit. The next step is for the criminal to get the bank to think that he or she is a good customer by making some deposits. “They deposit empty envelopes or fake cheques, and then with- draw as much cash as possible,” Allen says. “When the bank looks up the account, it falls back onto the person who lost their wallet.”

Of course, rather than stealing directly from you, thieves can also target businesses to which you’ve volunteered personal details.

AN EDMONTON MAN is shopping for a new vehicle at a car dealership. After test-driving his ride of choice, he negotiates the price and offers up credit check information for leasing and purchase purposes—assuming that sensitive information is securely stored. Months later, he discovers he’s on the hook for three separate credit card bills in his name—none of which he applied for.

Allen points to this real case as yet another cautionary tale. “We discovered that the dealership kept customer [credit check] documents locked up,” he says, “but an employee stole some of them and sold them to an identity thief.”

Although the dealership employee was never apprehended, the business changed the way it stores client information. The employee’s accomplice, who committed the fraud, is serving a four-year jail sentence for that offence and a few other crimes.

There’s another way car shopping can open the door to identity theft. It’s common for dealerships to photocopy your driver’s licence before you take a test drive. That copy contains a wealth of personal details. After your test drive, insist that the copy be destroyed or returned to you.

In fact, you should make a habit of asking why your information is needed any time it’s requested—no matter where you are. Then ask how it’ll be stored, for exactly how long, and when and how it will be destroyed.

THE PHONE RINGS. A grandmother answers and it sounds like her grandson, but he’s frantic—he’s in trouble and needs bail money, begging her not to “tell mom and dad.” She hangs up, drives to the bank and withdraws the money he needs. But something gives her pause. She dials her grandson on his cell phone—he’s safe at home and definitely did not ask for money.

The telephone is an important part of the identity thief ’s toolkit. Fortunately, the woman had second thoughts and discovered the reality of the situation. “But she was so embarrassed,” Allen says, “she sent her husband to the bank to put the money back.” The emergency scam described above seems far-fetched, but it does happen.

A similar scam is intended to catch its victim off guard: The caller will claim to be from the Canada Revenue Agency (CRA), and demand the immediate payment of outstanding taxes. “This one plays on fear because we’re taught to never, ever owe the government,” the detective says. “What people need to remember is that the CRA doesn’t give discounts if you pay early, and you never have to send the cash to a person.”

Be cautious, too, with requests for personal information by email and anything that looks like a communication from your bank or credit card company. “If you receive what I call ‘unsolicited contact,’ as in they contacted you first, don’t reply or click on the link,” Allen advises. Instead, visit your bank branch with a printout of the email, or call your credit card company at the number on the back of your card.

Other mass-marketing fraud (a.k.a. phishing) scams include emails from strangers telling you that you’ve inherited a fortune or won the lottery—and the sender needs your banking information to arrange the transaction, or for you to pay a delivery charge. “Don’t take anything at face value,” Allen says.

The first step in guarding against identity fraud is being aware of how it can happen. Then, take a good look at everything in your wallet and determine if an item—such as your SIN card—really needs to be in there. You should also check your credit report to make sure it’s accurate and to see which lenders have accessed it. You’re entitled to one free check per year from companies such as Equifax and TransUnion, and you can also pay for ongoing credit monitoring to get alerts if your report changes.

Shredding items such as bills, receipts, RRSP statements and even more harmless documents like loyalty program statements (they can be used to initiate fraud) is another easy way to keep your personal info from getting out. Monthly bills, including credit cards or utilities, should be destroyed once they’ve been reconciled. For more details on what to shred and when, see ama.ab.ca/shredding.

And always trust your gut. If something doesn’t feel right, contact the company directly to make certain the message really came from them.
To protect your identity, the best thing you can do is limit other people’s access to it, whether in person, online or over the phone. Don’t provide information unless you know it’s necessary. Then make sure you learn how your details will be handled.

“I don’t want to scare people so much that they stop living,” Allen says, “but they have to be more cautious than they are now.”