KEY POINTS:
Manager of Deloitte's forensic practice, Sam Labone, has never seen so
many cases of identity theft for financial gain as he has this year.
His forensics team has tackled six cases, which Labone says is an indication that the art of stealing identities - the number one case
of fraud in the United States - is now catching up in New Zealand.
"People learn how to do it from other people and it was just a matter of time before it came here," says partner of forensic practice at Deloitte, Barry Jordan.
Identity crimes come in two forms: identity fraud is when someone creates a false identity that doesn't exist - for example Wayne
Patterson, who created 120 identities and defrauded the Ministry of Social Development in 2006.
Identity theft, which is just beginning to raise its head in New Zealand, is when someone steals the identity of another person and uses it to take out loans, or for other financial gains.
Most fraudsters gain access to information through their role in a
workplace.
They can use it to request loans from second and third-tier lending
institutions. The money is put into the criminal's bank account while the identity theft victim is hit with the debt.
Labone says stealing an identity is relatively easy because information is readily available.
The rise of online systems like Facebook and Bebo has increased the
availability of this information.
Very often, the criminal will target the identity of someone they know or someone who is of a similar age, ethnicity and gender, as this makes it easier to answer questions necessary to pass credit checks.
The reason they get away with it is that many organisations simply rely
on the forms being filled in correctly. If the driver licence number lines up and a credit check comes back with similar matches, organisations will "take it at face value and lend on it", Jordan says.
Many workers have access to detailed personal information, but whether or not they use it to commit fraud comes down to having the motivation.
Then they have to have the opportunity to steal the personal information.
But whether or not they step across the line of actually committing
identity theft comes down to what Jordan calls "rationalisation" - how the fraudster is able to justify their actions. Sometimes it's because they need the money, sometimes it's some sort of revenge.
Labone says the fraud varies - he has seen cases where people have used the stolen identity to sign up to a newspaper delivery or for a new wheelie bin, while others have bought whiteware or cars on hire
purchase.
The Deloitte team's role is to clean up the mess and ensure no other identities are affected.
Victims are not only those who have had their identity and credit-rating
compromised, but also the lenders, who are unlikely to see that money again. They often have to write it off as a cost of doing business,
Jordan says.
While there is not much people can do to avoid having personal details put on databases, Jordan urges the public to be cautious when asked to give information and to make sure they know how it is to be used.
It's also important not to leave personal documents lying around, to shred documents, install security systems on the computer and lock the letterbox.
If found, identity fraudsters can be charged with false pretensions,
deception, false documentation and forgery, but by the time victims
have caught on to what is happening, it is often too late, Jordan says.
Clarification: Last week the Herald on Sunday incorrectly referred to
Deloitte tax partner Mike Shaw as Mark Shaw.
