By assuming other people's identities, fraudsters are now skimming off millions of euro from bank accounts. Karlin Lillington reports on a worrying new trend

Coming to a savings, current or businessaccount near you: identity theft. It's the fastest growing crime in Britain and the United States, and, with expert gangs operating in Ireland to dupe you out of your hard-earned cash, Irish authorities expectit to become an increasing problem here as well.

Identity theft is the misappropriation by one person of the identity of another in order to commit theft, fraud, or any other unlawful activity. It covers a range of illegal activities,from stealing PINs (personal identification numbers)to get money from ATMs, to siphoning cash from an accountby impersonating the account holder, to taking money from a corporate account by pretending to be a company director.

To create false identities thatare difficult for law enforcement agencies to trace, criminals pick up personal information on individuals from the Internet,forge passports and other forms of ID, and roam graveyards looking for tombstones from dead babies they can "resurrect" into living adults.

To get hold of your cash, they engage in "bin raiding" (digging through your rubbish), in search of your credit card counterfoils and old bills, they affix tiny cameras, recording devices, even false fronts to ATM machines to get your PIN, and pay restaurant and shop employees up to €50 for everyextra imprint of a credit card can they can sneak out, allowing them to counterfeit the card.

There has been a huge increase in identity theft in Europe, with 80 per cent of that taking place in Britain, says Una Dillon, of the Irish Payment Services Organisation (IPSO), the umbrella body for payment services for financial institutions in Ireland. She expects the crime to become more common here.

"We're very much aware of identity theft," says Det Insp Dave Dowling, of the Garda Bureau of Fraud. "Here, it's only just starting to appear."

But the problem is exploding in other countries.Annual fraud losses in 2002 to individuals through identity theft are estimated to be more than $12 billion worldwide, while American businesses have suffered losses of$47 billion, according to new US studies. The 2003 figures for incidence of the crime are up 33 per cent over 2002 in the US, and up 100 per cent in Britain.

And a recentreport by the US federal government estimates that one in four American households, and one in eight Americans, has been a victim of identity theft in the past five years,with the average loss to an individual pegged at $1,180 and to businesses,$10,200. The US government suspects the true level of fraud is much higher, as only a quarter of victims surveyed said they reported the crime.

But the trauma for victims doesn't stop with the costs incurred.Because someone else commits criminal activities using your name,their criminal record, damaged credit ratings,and blacklisting by banks and other institutions become your record. You will have to spend an average of 175 hours and $800 trying to clear your name, according to US estimates.

An American international banker, Michelle Brown,testified before the US Senate in 2000 on her nightmarish ID theft experience, which she told senators is "a devastation beyond any outsiders' comprehension". The saga began innocuously enough - the thief stole her rental application from a property managementoffice. But with those details,the thief, a woman, was able to get credit cards and a driver's licence in Brown's name.

She then bought a $32,000 truck, had $5,000 of liposuction,bought goods and rented properties. Eventually she was suspected and then, after six months as a fugitive,convicted oftrafficking 3,000 lbs of cannabis. But the arrest warrant and prison record went under the innocent Brown's name. The confusion took months to clarify, but not before Brown had been arrested at an airport and had other similar run-ins with authorities believing her to be "the other Michelle Brown".

One of the more bizarre techniques for creating a false identity causes a different kind of anguish for people. When criminals design a fake person based on information taken from the gravestones of dead children - a booming form of identity theft in Britain - it is the next of kin who eventually get sent the bills for purchases made in the name of their dead child."This is obviously extremely upsetting for the families," says Dillon.

Over 25,000 cases of ID theft from baby graves have been reported in Britain, with a huge leap from 5,000 cases in 2001 to 16,000 such incidents last year. In Ireland, this type of theft is rare, but it does happen, says Det Insp Dowling. Far more common is ATM and credit card fraud, mostly perpetrated by organised gangs of West Africans and Eastern Europeans, with some additional activity by Irish individuals and gangs.

ATM fraud is becoming increasingly technical and sophisticated, he says, with criminals using tiny card "skimmers" that record your account details from the magnetic strip of your card when you put it into a doctored ATM. In addition, criminals mount tiny cameras above the keypad to record your pin as you type it in, and have even placed false fronts onto ATMs, with fake keyboards that record your keystrokes - and your PIN. With this information, a fake card can be manufactured and used with your PIN.

Another scam is for a gang to place an employee in a shop or restaurant. The person does an extra imprint or two of your credit card when you make a purchase, enabling the gang to either manufacture a card or make purchases using the information.Dillon says there have beeninstances where gangs have paid existing employeesaround €50 per imprint- clearly a huge cash enticement for someone working on minimum wage, who could easily garner dozens of card imprints daily.

Mail can be intercepted to grab new credit and ATM cards when they are being delivered, or to steal bills that have detailed personal information contained inside. Perhaps surprisingly, the one area in which credit card fraud is extremely low is the one area in which there was much scaremongering in the past: online transactions."Fraud in online transactions is very low - so low that it really doesn't appear on our fraud radar," says Dillon.One US study says paying your bills and doing your banking online reduces the chance of fraud by up to 18 per cent.

Both Det Insp Dowling andDillon say there are many ways in which Irish people can reduce the likelihood of identity theft. Buy a shredder - now quite inexpensive - and shred bills, any documents with personal or financial information, credit card counterfoils, and any sensitive information that you aren't saving for tax records and would otherwise throw in the bin.

Check credit card and financial account bills carefully each month for unexpectedpurchases. When using an ATM, make sure no one is "shoulder surfing" behind you to get your PIN, and also use one hand to shield the other as you type in your number. Check the ATM for anything that looks odd - any extra bits that seem to be stuck on.

Unfortunately, the perpetrators of ID theft can be particularly hard to catch. "These are complex cases," says Det Insp Dowling. Often it is hard to establish jurisdiction for a case as a card stolen in one country is used to make purchases across the world, for example.When they are caught, they are sent to prison where they pass on techniques to other inmates, increasing the problem, says Dillon.

And how do gardaí go about apprehending ID thieves?"There are some effective ways, but I won't say," says Det Insp Dowling. "I'm sure the thieves read the papers as well."

How frequent is identity theft?

Mail order and telephone order fraud: 51 per cent

Stolen: Fraudulent transactions that take place on stolen cards - 17 per cent

Counterfeit: Fraudulent transactions that take place on cards that have been cloned - 10 per cent

Lost: Fraudulent transactions on cards that have been reported lost

- 8 per cent

Account fraud: Transactions that take place on cards that have been given to customers who have set up accounts fraudulently

- 6 per cent

Mail not received: when post is intercepted and cards, then used by the thief - 4 per cent

Account takeover: occurs when someone leaves the country and sells their account to a fraudster. This account is used for a short period as a basis for fraudulently acquiring cards and money from the banks. Account takeover is also when a criminal steals information from an account holder in order to change details on the account, which eventually enables the criminal to gain cards and cheque books - 3 per cent

Multiple imprint: this is when a genuine transaction takes place at a retail outlet, then further unauthorised transactions take place on the same day at the same place - 1 per cent

Source: Irish Payment Services Organisation Ltd, 2002

How it's done

Address fraud: using someone else's address to create false accounts, identification, etc

Fraudulent obtaining of credit files from credit reference agencies

Interception of post or redirection of post

Impersonation of the dead: stealing the identity of dead children

Using the identity of deceased children, taken from graveyards

UK reports show 5,000 cases in 2001; 16,000 cases in 2003

Impersonation using identity documents: creating a false identity to make purchases

Using forged or stolen identity documents

Using remote delivery channels for goods bought: phone, post or Internet

Account takeover: secretly using another person's account

Getting access information: obtaining Personal Identification Numbers (PINs), stealing cards, using convenience cheques, acting as a co-applicant or authorised user, and reporting lost/stolen cards and cheques to have them reissued

Company takeover and cloning: impersonating a company

Making fraudulent changes to company registrations/directors

Adopting the identity of a successful trading company to deceive clients/customers