Who Commits Identity Theft?

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One of the many disturbing facts that make identity theft such a nightmare for everyone involved is that it seems anyone and everyone is in on the act.

And perhaps most disturbing, a report containing national statistics for identity theft by the Federal Trade Commission found that more than half the victims of identity theft reported that the culprits were people they know — co-workers, friends, employees, neighbors, and even family members.

And I've even come across cases of children stealing their parents' identities for quick cash in the genuine belief that there's no victim and that their parents won't suffer. But they do suffer, and often greatly. Apart from the fact that there are real victims of identity theft, you can imagine how distraught a parent must feel knowing that the crime that changed their life forever was committed by their own child.

Identity Theft Is Committed By A Variety of Criminals

Many identity thefts are committed by opportunists or petty criminals, and organized crime gangs worldwide are also becoming increasingly involved. Organized crime is believed to be behind many of the large-scale cases of credit fraud and identity theft that involve hacking into major online databases. In Moscow, for example, there are an estimated 6,000 criminal gangs, and most are believed to be involved in identity theft at some level.

Many of these gangs are exploiting very bright computer students and graduates who are easily tempted by the high pay and relatively low risk, especially in a country where a teacher can often earn less than $1,000 a year. Organized crime has been linked to identity theft in Bulgaria, Romania and Albania, as well as the United States.

Employees are also a major threat, especially in smaller businesses, and most of the recent high-profile identity theft cases have involved trusted employees. One of the most costly identity theft cases happened at a small New York software business and is believed to have cost more than $100 million. According to investigators, over a two-year period, the former employee used an uncancelled password to steal the credit reports of thousands of consumers, and then sold the information to accomplices for around $30 a report.

And just to give you an idea of the potential return on identity theft fraud — if the culprit in that case had been more careful and determined, and maximized the potential profit on each stolen identity, his theft could have netted him closer to $500 million. And I've seen businesses large and small across the country hit with major losses because of identity theft by employees, whether it's stealing the identity of a co-worker, or stealing and selling customer files on a large scale.

And, of course, most petty criminals now recognize the potential upside in fraud and identity theft, whether it's simply selling a piece of information like a Social Security number for a few hundred dollars, or learning the basic skills to turn that small piece of information into a much bigger payoff.

Which is why we can also expect to see burglars, pickpockets, car thieves and all sorts of lower-level scam artists — including those who engage in dumpster diving — focus more on identity theft and get better at it.

Media Coverage May Increase the Incidence of Identity Theft

Perhaps one of the downsides of the extensive media coverage of identity theft is the fact that it will drive more opportunists to the crime, with a growing number of stories about people who stole information on an impulse, having read the headlines and hoping that they'd be able to make some money with the information.

For example, one recent case involved a waiter at a restaurant who would steal and sell copies of customer credit card receipts if that customer did not pay a good tip. Apparently he didn't consider it a crime, just a way to get the tip he believed he earned. That's why it's so important, and perhaps unfortunate, that you don't automatically trust just anyone with access to your personal financial information.

Employers have also been known to steal the identities of their employees, and there have also been a number of cases involving lawyers stealing the identities of their clients.

The bottom line? Don't assume that your identity is only vulnerable to hackers or professional criminals. The best way to protect yourself is to be just a little paranoid and assume that anyone with access to your personal information, whether friend, family, co-worker or anyone else, just might be tempted to do the wrong thing and commit identity theft.

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