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The Low-Tech Reality of Identity Theft

Stop worrying so much about that vaguely Eastern European computer hacker and start worrying about that clerk at the DMV.
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The U.S. Census Bureau estimates a little more than one-third of households will refuse to mail out their census forms next year because of fear that sharing personal data could make them susceptible to identity theft.

This is no idle concern — almost 10 million people were victims of identity theft in 2008, a 22 percent rise from the year before. And despite the popular image of some Serbian teenager with superior computing skills hacking into a major mainframe and stealing thousands of pieces of sensitive personal data, then using them to buy flat panel TVs and Blackberries, the majority of identity theft — a whopping 43 percent — comes from such low-tech means as stolen wallets and documents. Only about 1-in-10 thefts are computer-originated.

Those final two figures, in fact, tend to confirm the findings of "Understanding Identity Theft: Offenders' Accounts of Their Lives and Crimes," a study published earlier this year in Criminal Justice Review. Conducted by Lynne M. Vieraitis of the University of Texas at Dallas, and Heith Copes of the University of Alabama at Birmingham, the study is based on interviews with 59 identity thieves incarcerated in federal prisons. The goal of the study was to determine the demographic characteristics of these criminals and how they commit their crimes.

"One of the things we found most surprising is it seems to be very democratic in terms of who's committing [identity crimes]," says Vieraitis. "There are people who are more like street offenders and those closer to the white-collar-type fraudster."

"What motivates all these offenders is money," adds Copes, "and that's where you see the distinction between street life and those living a middle-class lifestyle. The street-life types, these are the hardcore offenders. They live this life of the party, drugs, going out — this hedonistic lifestyle. And they use the money to support that lifestyle. It's a cash-intensive lifestyle. It encourages them to commit more crime, and the cycle continues. The middle class is trying to portray a middle-class lifestyle; they're trying to pay off houses and cars they can't afford."

In either case, the means of obtaining the information needed to pull off their crimes is decidedly low tech — as low tech as, in some cases, Dumpster diving. But the most common method of getting information is to buy it from someone, generally a person who works for a mortgage company, bank, car dealership or state agencies like law enforcement and the Department of Motor Vehicles.

"The most common method was getting it through legitimate access," says Copes. "Either that person worked at the place that had that information or they paid the person to get it. They use what's known as 'larceny sense' — a lot of them could just recognize people they could buy off."

Other methods included stealing mail from apartment houses or businesses like insurance companies — even stealing trash cans from banks. One thief put ads in newspapers seeking employees for a new company, had jobseekers fill out applications that included Social Security numbers, then used those to create false identities.

In all cases, offenders parlayed stolen IDs into cash by applying for credit cards (the most common method), opening bank accounts and depositing counterfeit checks, withdrawing money from existing accounts, applying for loans and public assistance.

One thief would apply for credit cards at places like Lowes or Home Depot, receive instant credit in a specific amount and then max out the card immediately. This felon would even take orders from people beforehand and discovered that gift cards were especially popular: "Gift cards were like money on the streets," she told the researchers. "People were buying them off me like hotcakes."

Yet if all this suggests identity thieves are necessarily smarter than the average felon — you know, like that brilliantly twisted teen Serb hacker — forget it.

"You don't have to have a high IQ," says Copes. "One of the skills is just good social skills. You may pose as someone and pull all their money out of an account, so you need to be able to interact with people, know which teller to talk to and know when a conversation is not going the right way."

So if identity theft isn't primarily a trade for brainiacs, how come it's the sophisticated computer types who seem to define the crime?

"The media has put out this image that it's Russian organized crime or groups using computers hacking into databases," says Vieraitis. "Those are the ones we hear about. I think it makes for a better story. Maybe we just don't focus enough resources on the mundane identity theft. I also think banks and credit card companies have gotten better at helping people out. And most of it is credit card fraud."

"It is a relatively unsophisticated type of crime," Copes adds.

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