An Approach to Managing Identity Fraud

An Approach to Managing Identity Fraud

Rodger Jamieson (The University of New South Wales, Australia), Stephen Smith (The University of New South Wales, Australia), Greg Stephens (The University of New South Wales, Australia) and Donald Winchester (The University of New South Wales, Australia)
DOI: 10.4018/978-1-60566-326-5.ch011
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This chapter outlines components of a strategy for government and a conceptual identity fraud enterprise management framework for organizations to manage identity crime occurring via cyberspace. Identity crime, related cybercrimes and information systems security breaches are insidious motivators for governments and organizations to protect and secure their systems, databases and other assets against intrusion and loss. Managing identity crime is a critical step in cyber security and global information assurance. Strategy components and conceptual model elements are constructed through analysis and synthesis of models from academic literature, and reports by industry and government professionals. A comprehensive government strategy with a legislative component reinforces organizational policies to combat identity crimes. Model components used to develop our identity fraud organizational framework were selected from cost of identity fraud, identity risk management, identity fraud profiling, and fraud risk management literature. Our framework is organized into anticipatory, reactionary and remediation phases.
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Identity crime and related crimes, cybercrime and information systems security breaches are insidious motivators for governments and organizations to protect and secure their systems, databases and other assets against intrusion and loss. The economic cost to society and more directly to enterprises provides significant impetus for a comprehensive framework for organizations to prevent and combat the growth of identity and related crimes. Table 1 shows the estimated economic impact of identity crime and related crime costs. For example, the accumulated losses caused by identity crime and related crimes, such as money laundering, terrorism, trafficking – drugs, people, weapons, illicit material, etc., globally were estimated at US$221 billion by the end of 2003 and up to US$2 trillion by the end of 2005 (Hurley & Veytsel, 2003). Approximately half of the estimated global cost could be attributed to money laundering alone (see KPMG, 2007).

Table 1.
Summary of identity crime costs (figures are in billions in stated currency)
Country (or Region)YearEconomic Impact of Identity Crime (billions)Source
Global2005US$2,000.0Hurley & Veytsel, 2003, p.1
2003US$221.0Hurley & Veytsel, 2003, p.1
United States2008US$45.3Kim 2008, p.21*
2007US$51.0Kim 2008, p.21*
2006US$57.7Kim 2008, p.21*
2005US$57.4Kim 2008, p.21
2003US$56.0Kim 2008, p.21
2002US$48.0Foley & Foley 2003, p.27
United Kingdom2006£1.7UK Home Office 2006, p.4
2002£1.3The Fraud Advisory Panel, 2003, p.1
Canada2002C$5.0Brown & Kourakos 2003, p.12
Australia2007A$1.0+Australian Bureau of Statistics 2008, p.1
2002A$1.1Cuganesan & Lacey 2003, p.55
South Africa2007Rand1.0#Joseph 2008, p.1
The Netherlands2006Euro5.0Model Criminal Law Officers’ Committee 2008, p.13

# Estimate based on first 3 months of 2008 figure of 276 million Rand by Alexander Forbes Insurance.

* Three-year moving average - original amounts are US$40 (2008), $36 (2007), and $60 (2006) billion.

+ This amount also aggregates costs from lotteries, pyramid schemes, financial advice, and other scams.

Note there may be gaps in years between estimates gathered for some countries.

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Editorial Advisory Board
Table of Contents
Merrill Warkentin
Kenneth J. Knapp
Kenneth J. Knapp
Chapter 1
Jaziar Radianti, Jose J. Gonzalez
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An Autocorrelation Methodology for the Assessment of Security Assurance
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Data Smog, Techno Creep and the Hobbling of the Cognitive Dimension
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Human Factors in Security: The Role of Information Security Professionals within Organizations
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Chapter 11
Rodger Jamieson, Stephen Smith, Greg Stephens, Donald Winchester
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An Approach to Managing Identity Fraud
Chapter 12
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