National Fraud Center: Net Driving Identity Theft

SAN FRANCISCO (03/16/2000) - For all its promise, Internet commerce is also fostering a boom in the number of criminals using false identification to perpetrate a smorgasbord of crimes, according to a report released today by the National Fraud Center.

"The Internet takes the shadowy form of the identity thief and provides him or her (with) the shelter of its anonymity, and the speed of its electronic transmissions," the report said. "The potential harm caused by an identity thief using the Internet is exponential."

The "faceless" world of the Internet allows thieves to make unlimited transactions and gives them legal and illegal access to databases containing dates of birth, social security numbers, mothers' maiden names and much more, Daniel Brooker, executive vice president of the fraud center said today in a telephone interview. The fraud center provides research, consulting and investigative services for private industry.

Incidences of identity fraud are expanding as fast as Internet usage, the report said.

"Arrests for identity fraud increased from 8,806 in 1995 to 9,455 in 1997, while financial losses grew from US$442 million to $745 million over the same period, the report said, citing figures from the U.S. General Accounting Office (GAO). Consumer inquiries to the fraud victim assistance department of Trans Union, a national credit rating bureau, rose from 35,235 in 1992 to 522,922 in 1997, the report said.

Entitled "Identity Theft: Authentication as a Solution," the report advocates an increased use of digital certificates and digital signatures, as well as biometrics -- the scanning of body parts such as fingerprints or retinas -- as verification tactics to thwart would-be criminalsHowever, the report said both these measures are subject to abuse because criminals can still apply for and receive such verification measures using false identification.

The report advocates higher standards for identity verification, including greater access to personal information by private industry and by private investigative agencies like the fraud center itself.

"Presently, authentication is occurring to a limited degree in both the in-person and e-commerce customer acquisition scenarios," the report said. "However, identity theft perpetrators have mastered many of the limited authentication processes that are used. Clearly, there is a compelling need for a higher level of authentication."

Paradoxically, the increased authentication might come from the sharing of private information. "We need industry, banking, securities, insurance companies -- the credit guarantors -- to give us access to information to make sure that the information being provided by a person is true," Brooker said.

"Don't just give the applicant the credit card right away. Do the background check."

In Horsham, Pennsylvania, the National Fraud Center can be reached at +1-215-657-0800, or at

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