It is estimated identity theft costs Australia $1 billion per year.* When identity theft damages the victim’s credit rating – it is because the fraudster has been able to overtake credit accounts, or has gained access to enough personally identifiable information from the victim to forge new identity documents. This gives the fraudster access to credit cards, loans, even mortgages which allows them to extract significant amounts of money from the victim without them realising it straight away.
If credit accounts are not repaid – after 60 days the credit file holder is issued with written notification of non-payment and the intention for the creditor to list a default on the person’s credit file. It is at this moment that some people who were previously unaware of any problems find out they have been victims of this more sophisticated type of identity theft. But often the credit file holder has also had their contact details changed – and this means it is not until they apply for credit in their own right and are refused that they find out about the identity fraud. This can be a significant time after the initial crime.
Over the past year there have been reports in Western Australia of an elaborate property scam, in which overseas-based owners had their homes sold from under them by identity thieves. One property had been sold and settled months before the owner had any knowledge.
“It is clear it was a sophisticated outfit that scammed the owner, the real estate agent, the settlement agent, the banks, and more importantly and critically, the Department of Land Administration (DOLA),” Real Estate Institute of Western Australia (REIWA) spokesperson Brian Greig told ZD Net when the story broke in September 2010.
For identity theft victims who have had their credit rating affected, loss of money is just the beginning of their trouble. They lose the ability to borrow money. Dreams can be put on hold. Families and businesses can be put under immense stress. They can’t even get a mobile phone plan – and they are looking at a 5 year term for a default.
Recovery is difficult. It is up to the identity theft victim to prove to creditors they did not initiate the credit in the first place. The victim is required to produce Police reports, bank statements and other documentation to prove their case. Their whole life is turned upside down in a desperate attempt to recover their good name. They often need professional help from a credit rating repairer as well as Police and Courts.
The production and verification of key identification documents in Australia plays a crucial role in ensuring better security for individuals against this type of identity crime.
Clearly the Government agrees there is a great need for a strong, unified identification system, but have they been effective in making this happen?
In 2005 the Attorney-General’s department began plans to launch a Documentation Verification Service (DVS) as part of its National Identification Security Strategy (NISS). The DVS is intended to provide an electronic validation platform that allows authorised government agencies to cross-check identity documents to identify their clients and prevent identity theft or fraud.
“It helps protect people’s identity and their privacy by allowing documents commonly used as evidence of identity to be checked electronically, quickly and directly by the document’s issuing authority,” Attorney-General Robert McClelland said recently in a media release.
“Through the DVS it is possible to verify the validity of Australian-issued passports, visas, as well as birth, marriage and change-of-name certificates and driver licenses from States and Territories.”
But the road to implementation of this system has been neither cheap (costing $25 million by 2010), or easy, with many reports of agencies failing to implement the system.
Technology and security publication, CSO criticised the slow take-up of the service in its article ‘Australia crawls towards its answer to identity fraud’.
The story features the Australian National Audit Office’s report on the program’s implementation. The Report slammed the program’s sluggish roll out last April, noting that the “rarely used” system was unlikely to strengthen Australia’s personal identification process in the near future.
It says the main problem was that many of the identity issuer and user agencies, such as Centrelink, the Department of Immigration, and state road authorities and birth and death registries, were not connected to DVS. Verification using the system also took longer than 20 seconds in a quarter of transactions, eroding its promised efficiency gains and convenience.
This week the Attorney-General’s department announced 200,000 documents had been verified using the system. It says with the full commitment of state and territory governments now in place the value of the system is being demonstrated, with a number of Commonwealth and state agencies using it for processes that require identity verification.
It is not clear on the volume of agencies who have committed to adopting the DVS as part of their client registration process. The AG says there are a “wide range” of agencies, which include revenue, superannuation, electoral, land title and service delivery agencies.
Australians are facing an ever increasing number of threats against their identity. According to an identity theft survey commissioned by the Attorney-General himself, 1 in 6 people in Australia have been or know someone who has had their identity misused in some way in the past 6 months.
With this knowledge, it would seem all agencies should be implored to take up this service or perhaps we should look again at why some agencies are failing to use it. Surely a streamlined approach to document verification is essential protection for Australians.
One thing is certain, if identity theft really is the emerging crime with the magnitude and scope that is reported, people need to know the fundamentals that make up their identity – their passports, their licences and their birth certificates are bullet-proof from attack.
* OECD Committee on Consumer Policy, Online Identity Theft, February 2009, p. 37
Contact MyCRA Credit Repairs for further help with identity theft, or to repair a credit rating on 1300 667 218.