Accounting, Banking and Financial Systems

The last decade saw the surge of a new and a sophisticated variety of crime called ‘identity theft’. An identity thief operates by obtaining some piece of sensitive information and uses it without the owner’s consent or knowledge to commit fraud or theft. This report seeks to address the ongoing ‘battle’ between the various identity thefts in day to day life the ‘militant’ hackers who wish to ‘conquer’ program writers. This report takes a look at different kinds of identity thefts known, listing its effects, characteristics and problems.

After defining Identity Theft and its types to detail in the first chapter, the second chapter entails the problems confronting the Corporate Sector, the third chapter discusses the merits and demerits of the fraud prevention techniques, whereas the fourth chapter elaborates on the efficacy and efficiency of the laws governing data privacy. A qualitative approach has been employed in carrying out this research, as existing data has been collected from various sources and has been critically analysed and reviewed in carrying out this study.

Acknowledgements With a bottomless feeling of gratefulness I take this occasion to express my genuine admiration to all who in one way or another helped me reach this point when I was finally able to complete this demanding assignment. After being humbly grateful to the Almighty, I would like to convey my honest thankfulness to my parents and other family members in Pakistan for their continuous support and encouragement. Furthermore, I would like to express my gratitude to my supervisor, David Chadwick, for supervising me.

Finally, a big "Thank you" and a token of appreciation to all those who share their wealth of information via the various articles on the web. Methodology A qualitative research method has been employed in carrying out this study; qualitative research involves an in-depth understanding of the subject and the reasons that govern the implications and limitations of the subject. Unlike quantitative research, qualitative research relies on reasons behind various aspects of the subject. To provide an inclusive and to the point representation, material from a vast variety of sources was analysed.

This involved researching and adapting material from sources such as books, magazines, journals, internet sources and through direct contacts to the organisations that design and implement the fraud technologies. First hand data was gathered from different organisations to see their views and responses to usage of their plastic cards and how they feel about using their payment options with the technological advances over the years in fraud prevention technology. This study focuses more on the why and how of  ‘Identity Theft’, as compared to what, where, and when.

Hence, smaller but focused samples have been employed rather than large and random samples. The 1990’s saw the rise of a new variety of crime called identity theft. An identity thief operates by obtaining some piece of sensitive information and uses it without the owner’s consent or knowledge to commit fraud or theft. Identity theft is a serious offense. If a person’s identity is stolen, he/she can be made to spend ages and a fortune cleaning up the mess the thieves make of his/her reputation and/or credit history. Some victims lose job opportunities, get loans refused, or even get arrested for crimes they didn’t commit.

According to a report published by CIFAS (The UK’s Fraud Prevention Service) in 2002, identity theft costs the British Economy ? 1. 3 billion per year, he report further says, cases of identity theft for financial gain have doubled to 75,000 in two years. CIFAS also estimated that the reported cases have cost the victims ? 62. 5 million per annum Types of Identity Theft Identity theft absorbs the use of an individual and/or an organization’s identity information to open bank accounts, attain payments or credit, deceptively obtain social security (or any other) benefits.

The means by which an impostor does this can fluctuate widely. Application Fraud An impostor may merely apply for credit cards or open bank accounts by the name of a different person using bits of personal and/or financial information for e. g. old utility bills belonging to the victim. This type of identity fraud is referred to as ‘Application Fraud’ According to Experian Scorex, a global consulting firm, application fraud is not limited to the UK/US alone but is rather a global and a growing issue. In its annual report of 2006, Experian Scorex states that over ?

4 billion is lost to credit application fraud in the UK each year, it further states that application fraud alone cost the UK economy ? 1. 7 billion in 2005. The report categorizes application fraud into three broad categories: Soft Fraud Application fraud carried out by people who are credit hungry and have an unrealistic ability to pay it back. Such people have usually been declined for credit elsewhere and manipulate application details to enhance status. According to the report by Experian Scorex, such applications if approved