If Corporal Louis Robertson of the RCMP's anti-fraud call centre needs further proof that identity theft is among the fastest-growing crimes in Canada, he need look no further than his own wallet.
Last year, Cpl. Robertson noticed a strange charge on his American Express statement originating in Ottawa at a time when he was in Washington. The man who knows more about identity theft than almost anyone in Canada has never found out who got his credit card information, or how.
“[Identity theft] is the fastest criminal market right now,” Cpl. Robertson said. “There's no risk, and that's the beauty of it – if you are smart, you will disappear.”
Between 1998 and 2003, identity-theft reports in Canada soared 500 per cent, according to Vanessa Giuliani, a fraud specialist with the credit information and reporting agency, Equifax Canada Inc. Ms. Giuliani was one of several representatives of credit-related business in Ottawa earlier this month, urging passage of Bill S-4, which would create several new Criminal Code offences related to identity theft.
Businesses have traditionally walked a fine line when trying to combat identity theft. If they subject people to overly intense scrutiny, they risk invading people's privacy and upsetting their best customers, while too many regulations and checks can hinder the flow of commerce. Do too little, and criminals thrive.
Cpl. Robertson estimates the financial impact of identity theft in Canada at about $500-million a year. It's impossible to get a precise figure, given the nature of the crime and the fact that many companies are reluctant to release their fraud statistics. Identity theft has become so common that it is called traditional identity theft to differentiate it from an even more damaging variation that has grown significantly in the past couple of years: fictitious identity theft. In this scenario, a criminal uses a real piece of identification as a basis to create a fake person who they use to apply for all the credit cards and loans a real person could. At the end of the scam, the culprit takes the money and runs, and there's nothing left to chase. Equifax estimates the average loss in an instance of successful fictitious identity theft at about $250,000.
Such cases are often traced to organized crime, Cpl. Robertson said, adding that the RCMP has tracked identity-theft rings to everything from West African criminal groups to local biker gangs.
Identity thefts can often start with one or two low-level company employees who have access to personal information databases. Given how valuable that kind of information can be to a criminal organization, employees who leave sometimes take it with them. Cpl. Robertson said companies have consulted him on what to do after discovering that anywhere from two million to 40 million identities may have been compromised.
“My first answer,” he said, “is get a lawyer.”
Because identity theft is usually the work of organized rings, when uncovered, it tends to be on a large scale. Two years ago, Toronto police officers conducting a traffic stop found 15 credit reports in the back seat of a car. An investigation by Equifax and the police traced those reports to three employees at three different companies. Between them, the three had created 500 fictitious identities.
“You tend to see foot soldiers working in concert with organized groups,” Ms. Giuliani said. “They don't always actualize identities, but when they do get it, the average loss to the industry is about $250,000 per identity.”
Recently, firms have become aware of the risks of appearing to blow the identity-theft issue out of proportion. Earlier this year, a senior executive at AT&T Inc. told a U.S. Senate committee that worldwide revenues from all cyber crime stand at $1-trillion, making it more lucrative than the drug trade. His assertion has drawn criticism from those who call that number impossibly big.
But for Cpl. Robertson, the biggest concern isn't the size of the identity-theft industry, but the speed with which someone's identity can be stolen and exploited.
“Your personal identity can easily be sent to a black market in Bulgaria, and that's it,” he said. “It's all about speed.”
The list of precautions Canadians can take to avoid being the victim of identity theft includes simple things such as not letting your credit card out of your sight. Ms. Giuliani urged people to keep an eye out for mail that should be arriving, but isn't, and mail that shouldn't be arriving, but is.
Cpl. Robertson adds that many people keep documents such as their SIN cards – particularly popular with criminals – in their wallets. With that kind of information, a simple street theft can be the beginning of a much bigger problem.
“Many Canadians are still walking around with their lives in their pockets,” Cpl. Robertson said.
