Trends and Issues for Online Customers and Business - Essay Example

Identity Theft: Trends and Issues for Online Customers and Business Name Course Instructor Institution City/state Date Table of contents 1.0 Executive summary………………………………………………………………..3 2.0 Introduction…………………………………………………………………………3 3.0 .0Theory and concept………………………………………………………………4 3.1. 0 Identify theft typology and techniques……………………………………4 3.1.1 Identity theft control theory……………………………………………….5 3.1.2 Social system theory of Niklas Luhman……………………………….5-6 4.1.0 Trends in identity theft……………………………………………………………..6-7 5.1.0 How identity theft affects business and customers…………………………….7 6.1.0 Case study 1: Auction identity fraud in Romania……………………………….8-9 7. 1. 0 Recommendations………………………………………………………………..9 8.1.0 Conclusion…………………………………………………………………………..9 List of figures Figure 1: Types of attacks………………………………………………………………….5 Social system theory………………………………………………………………………5 4.0 Executive summary This essay strives explains certain aspects of identity theft. The work has first defined identity theft as basically the act of impersonating people so as to gain access to their financial statements. On the other hand, some theories and concepts explain the origin of certain behaviours and acts like identity theft. These theories include social systems theory and theft identity theory. There are trends in this type crime that are worth noting and UK is a good reference to this trend. The crime also has some effects on businesses and consumers that must also be put into consideration. Some case studies like Nigerian and Romanian examples have acted as points of references for identity crimes in the online business environment. Finally, the report has given certain recommendations on how to reduce the incidences of online identity theft. 2.0 Introduction Identity theft is the impersonating of an individual mainly for financial benefit. It results to a person loosing their personal data like passwords, banking information, user names and credit card information (Savirimuthu A & Savirimuthu J 2007). It is basically an online theft or crime. This type of theft has resulted because the modern business environment is online oriented where people leave their important personal information like name, address, cell number, phone number (OECD 2008). If a cyber thief is able to hack such information, then he or she can use it fraudulently. These thieves have been using social engineering or scams and making it possible to attack any business or a person’s profile. This crime put both businesses and customers at risk. Businesses incur financial losses from such theft than individuals since there are certain laws that protect individuals (Savirimuthu, A & Savirimuthu J 2007). Businesses are obliged to compensate customers under these laws. The most common information available in the internet include phone numbers, liens and taxes, property ownership, confidential contacts like current as well as previous addresses. This report therefore discusses some trends and issues of the online customers and businesses by using certain theories of identity theft and online or cyber crimes. However, certain theories and concepts explain the occurrence of certain behaviours like criminal acts. This essay has used Nicklas Luham’s social systems theory and identity theft theory to discuss trends and issues of online identity theft on consumers and businesses. 3.0Theory and concept 3.1.0 Identify theft typology and techniques Criminologists just recently recognized the need to focus on identity theft prompting scholars to find out the types and varieties of identity theft (Savirimuthu A & Savirimuthu J 2007). Since there has been a little research on the area, most existing studies talk about the types of identity theft rather than theoretical models of the crime (CIFAS 2014). The mostly stolen information includes SSN or Social Security Number. One typology of the crime is the misuse of accounts recently opened. For example when a person is getting a loan, new credit card or job application, he or she is revealing some identity information. The second typology is misuse of existing accounts like telephone number, bank account among other financial accounts. Thirdly, stealing of the credit cards also occurs where thieves misuse credit accounts that are in existence. Some of the techniques used by identity thieves include spamming, shoulder surfing, phishing, and dumpster diving (IC3 2014). Spamming involves sending of authorized e-mails that are advertising products and some get-rich quick schemes while phishers send emails to claim that a particular account has a problem. On the other hand, dumpsiters check on the trash cans of individuals thus getting access to copies of checks, bank statements, credit card among other records. Conversely, shoulder surfing simply still personal information and enter them into computers, phones and ATMs. However, these typologies are further subdivided to get identity theft categories like commercial or business identity theft, criminal identity theft, indentify cloning, financial identity theft and medical identity theft (CIFAS 2014). Figure 1: Types of attacks computer attacks (OECD 2008) 3.1. 1 Identity theft control theory This theory states that crimes and other unpleasant behaviours do not result from external forces (Savirimuthu A & Savirimuthu J 2007). This theory rather explains how crimes occur within certain forces. Crimes occur due exploitation of the available resources like identity that offers the offenders with the opportunity to satisfy their needs. The theory focuses on identity since criminologists and sociologists claim that it has become a convenient and easy target by fraudsters in the past decade. There is a considerate private information overflow into technological innovations and databases. Therefore, allowing access to such information creates room for identity theft. Theories of social learning claim that a criminal activity is always a learned behaviour thought they can be contrasted to control theories that focus on individual motivations forces (Savirimuthu A & Savirimuthu J 2007). This theory therefore, claims that criminal activities are driven by availability of certain resources that may be used by offenders to inflict loss on a vulnerable person or individual. 3.1.2 Social system theory of Niklas Luhman This theory explains how a system interacts with certain elements to bring a change in the organisation (Savirimuthu A & Savirimuthu J 2007). For instance, some factors have been found to increase susceptibility to identity theft. However, the theory also faults the ability of certain systems to make meanings from situations or events. The law systems or social legal systems were not able to indentify what is meant by identity theft. However, the modern legal systems have been able to identify what is meant by identity theft. Since machines can never be deceived, the situation creates room for identity theft since the person r thief cannot fake the details of the victims; they have to get the exact details. On the other hand, this theory states that legal systems cannot impose their risk knowledge on other systems forces (Savirimuthu A & Savirimuthu J 2007). Systems have processes and programmes that retain certain information though the systems are open environments. Social system theory (Savirimuthu A & Savirimuthu J 2007) 4.1.0Trends in identity theft The new trend for identity crime has been disturbing. In UK for instance a large population has fallen victims to online identity theft. These thefts have been mostly targeting check accounts (CIFAS 2014). One common trend is the sending of phony e-mails that request updates of banking information with fake links or websites. Criminologists argue that it is close to impossible for people to identify between fake and real website links. The other growing trend is the spyware or Trojan horse (Emerald 2014). The criminals send links to unsuspecting victims. When opened, victims unknowingly download the software which records every detail task they carry out, including their personal details like financial information. In UK for instance, the trend has been worrying. Fraud trends analysis in the region indicated that the crime was still high in the region, accounting for 60% of the identity crimes in the country (CIFAS 2014). Trends are brought about by the technological change that has seen identity crime targets also change. Though banks are the most targeted, the levels have been reducing in the country due to crack down on this menace. In the year 2013 for instance, around 125,000 cases of identity crimes were reported in UK though the number is expected to drop in the year 201(CIFAS 2014). Trends in online identity theft may also be explained using certain demographic and behavioural criteria (Emerald 2014). Certain studies have used state-level types or characteristics to explain the emerging trend in online theft identity behaviour. Such studies rely mostly on reports from trade commissions to find out how these attributes contribute to online identity theft. These studies have found out that countries and states that have a large number of males with high mobility of residents as well as entertainment establishments record the most online theft complaints (Emerald 2014). Age also plays a vital role in identity theft since countries with big middle aged population record high identity theft. 5.1.0 How identity theft affects business and customers Identity theft on businesses involves the posing of legitimate businesses on the internet to gain access to the business credit lines or in most cases, steal from the customers (OECD 2008). Business theft identity is receiving underreporting but is one of the major cyber crimes that affect multinational enterprises (Savirimuthu A & Savirimuthu J 2007). It takes various forms like posing look-alike businesses so as to lure customers. However, the major aim is gaining access to credit card information. The crime is thriving due the presence of online business environments. Dissolved corporations have been the easiest targets since people who ran the bases never pay attention after it has been dissolved. Thefts affect customers by denying them chances of securing their credits, pay for the goods and do business transactions (IC3 2014). It also affects productivity of the employees since may spend a lot of their time and resources in resolving these crimes; identity theft makes employees to loose morale in the business. On the other hand, the identity criminals may also gain access to the company’s data. The most affected area is human resource department. Any data breach impacts on employees, brand and the profits. 6.1.0 Case study 1: Auction identity fraud in Romania In Romania, auction fraud has been identified as the most prevalent crime in the country (IC3 2014). These criminals are at large in the internet and they offer every product on demand. These criminals have been flexible and hi-tech allowing them to extort half of the victim’s cash at the moment and other half being sent upon item arrival. They post these auctions to appear as if the person is located in the US and as an American citizen. The subject to this auction encourages unsuspecting victim to send money to associate, business partner, family member who is located in a European country . This money may be sent through wire transfers or other forms of online banking. Identity theft is also Rampant in Romanian banks where subjects hack victim accounts mostly in the United States and routes the money to Romania. On the other hand, these auctioneers also direct their victims to make payments under phony services. The criminals also compromise actual websites by creating sites that resemble these real websites. Upon completion of the money transfer, criminals discontinue their contacts. 6.1. 2 Case study 2: “419” OR Nigerian Letter This was named after the violation of Section 419 of Nigerian Criminal Code. This 419 scam has been rampant in the internet and it combines identify fraud with some advanced fee schemes where a victim receives a letter, fax or an email (IC3 2014). The people pose as Nigerian or other foreign government officials. The criminals promises to share a given amount of money by soliciting help on putting chunks of money to bank accounts overseas. They also promise to pay bribes and taxes to these government officials. The recipient is enticed into sending information to the email author that include account number and bank name, letterhead stationary and other vital information using some facsimile number in the letter. This scheme convinces the willing victims to send in instalments. This identity theft uses spamming as way of enticing unsuspecting victims who are duped large sums of money. 7. 1. 0 Recommendations It is recommended that appropriate measures must be taken to combat online identity theft. A collective responsibility should be taken by the business entities, online customers and legal authorities. Individuals must take measures to of protecting themselves from these crimes by making sure that their credit cards have fraud alerts as well as filling these reports to the relevant authorities. On the other hand, individual must recognize the importance of resolving such issues with the organizations from which the have been stolen from. Individuals must also understand that risk minimization is the first step towards fighting online identity theft. Therefore, government agencies encourage consumers to protect certain personal information. One way of ensuring security of such information is by reviewing private policies of the organizations. Besides, consumers must make sure that the websites’ data encryption is secure. Education and awareness can also reduce the incidences of identity theft. This involves the education of business, media, government officials and consumers that aims at sensitizing them on ID theft. Risk reduction will improve strengthen trust that consumers have on E-commerce. Since tackling the crime must involve all stakeholders, governments and businesses must make sure that they also take part in educating consumers on the need to reduce identity theft risks. Conclusion In summary, the online business environment has created room for various cyber crimes. One of these crimes is identity theft that involves impersonating an individual mainly to steal their finances. The are various methods and techniques that criminals use to gain access personal information like spamming, dump diving and use of other methods like Trojan horse. However, the occurrence of identity theft may be explained using certain theoretical models like identity theft control theory and social systems theory. Nonetheless, online theft has a considerate effect on both business and individuals though organizations bare the burden of compensating the victims. It may lead to lower productivity and bad corporate image for the company that reduces consumers’ trust on the organisation. The essay has also given two case studies of Nigeria and Romania that have high cases of identity theft. Finally, certain strategies like risk minimization and education awareness are the best recommended means of reducing online theft identity. References CIFAS 2014, Fraud trends 2013 fraud decrease serves as vindication and warning says CIFAS, viewed from http://www.cifas.org.uk/twentythirteen_fraudtrends Emerald 2014, Identity theft complaints: exploring the state-level correlates, Journal financial crime, vol.15, no. 3, viewed from http://www.emeraldinsight.com/journals.htm?articleid=1735037&show=pdf IC3 2014, internet crime schemes, viewed from http://www.ic3.gov/crimeschemes.aspx OECD 2008, ministerial meeting on the future of the internet economy, Seoul Korea 17-18 June 2008, viewed from http://www.oecd.org/sti/consumer/40879136.pdf Savirimuthu, A & Savirimuthu, J 2007 Identity theft and systems theory: the fraud Act 2006 in Perspective, Scripted Journal Of Law, Technology & Society, viewed from http://www2.law.ed.ac.uk/ahrc/script-ed/vol4-4/savirimuthu.asp Read More