How Can Using the Internet Help You Fight ID Fraud?

Identity theft – also known as ID theft, identity fraud and ID fraud – refers to an increasingly common type of fraud where a criminal steals someone else’s identity in order to profit illegally. It is one of the most rapidly increasing types of fraud in many developed countries.

In the UK identity theft is increasing at the rate of 500% each year and, according to Which Magazine, 25% of the population have either suffered from identity theft or know someone who has.

In the USA, a report issued by the Better Business Bureau revealed that, in 2004, over 9 million Americans became victims of one of the many different types of identity theft with the total sum defrauded being $52.6 billion.

With figures like this, it’s unsurprising that there is a great deal of concern surrounding computer and internet security. After all, the internet is basically a mechanism for exchanging information and the possibility that some of the information exchanged may be more than intended is never far from many internet user’s minds.

It’s easy to imagine international criminal masterminds using the internet to hack into computers so that they can access information with which to advance their illegal schemes. However, as revealed in the report, the facts of the matter are a little more down to earth and the internet, far from making you more at risk to identity theft, can help to significantly cut your losses if you do fall victim this form of fraud.

According to the Better Business Bureau’s research the main methods by which criminals gain access to information used for identity theft fraud are as below:

1. Lost or stolen wallet, chequebook or credit card. 28.8%
2. Accessed as part of a transaction. 12.9%*
3. Accessed by friend, acquaintance or relative. 11.4%
4. Don’t know, refused, no answer. 11.1%
5. Information accessed by corrupt employee. 8.7%
6. Stolen paper mail or fraudulent change of address. 8.0%
7. Obtained some other way. 7.4%
8. Computer spyware. 5.2%
9. Information stolen from garbage. 2.6%
10. Computer viruses and/or hackers. 2.2%
11. Emails sent by criminals posing as legitimate business. 1.7%

* 12.9% resulting from transactions – 10.4% offline transactions, 2.5% online transactions.

In total, when the instances where information was accessed during transactions are subdivided into online and offline transactions, only 11.6% of the information used to perpetrate identity fraud was stolen from computers.

Of this more than fifty percent was obtained by the use of viruses, spyware or hacking – the risk of which can be significantly lowered by the installation of the appropriate protection software and by ensuring that this is kept up to date.

Not only did the study reveal that the internet was not a major source of illegally sourced confidential information, but it was also found that those victims who monitored their financial transactions using the internet, ATM machines or other electronic methods suffered losses which were, on average, one eighth of those of victims who relied upon old fashioned paper statements to check their account activity. This significant reduction was attributed to the fact that the fraud was discovered more quickly thanks to “real time” monitoring.

Of course, that’s not to say that you shouldn’t exercise caution when using the internet or take care to protect the personal information which you may have stored on your PC. However, as long as you take sensible precautions - install virus, firewall and spyware protection, and keep updated the internet could actually help you to avoid identity fraud.