Danger in your dustbin

One of the easiest ways for fraudsters to get details to conduct ID fraud is by rummaging through documents that a company does not dispose of properly, says GIANMARCO LORENZI.

Businesses that fail to effectively dispose of documents containing personal details of customers and employees are placing these stakeholders at an increased risk of identity theft.

This is according to Gianmarco Lorenzi, Managing Director of Cleardata – who says that one of the easiest ways for fraudsters to obtain the necessary details to conduct ID fraud is by going through the rubbish bins of businesses. “Businesses often fail to realise the importance of effectively destroying documents containing client and employee personal information”.

The number of identity theft cases reported to the Southern African Fraud Prevention Service (SAFPS) by end April 2014 had increased by 16% year-on-year to 1370 and could exceed 4000 by the end of the year if the trend continues.

Lorenzi says the latest trends in ID theft involves fraudsters taking out credit in someone else’s name by using their identity information. “Consumers are often only aware that they have become a victim of ID theft when the company contacts them to pay the debt”.

He says fraudsters trawl through the rubbish bins outside of businesses in search of personal details which they use to access credit reports. “Once they have the credit report details they can access every account and bank number and use this to create new credit in the name of the victim”.

Lorenzi highlights that consumers are also facing an increasing risk of becoming a victim of corporate ID theft. “This typically occurs when a consumer receives communication, which appears to be official as it contains the company letterheads, stating that the account details for their monthly instalments have changed and giving instructions for the consumer to make payments into new account details. The consumer, thinking this is an authentic business letter, then makes payments into the fraudulent account. The scam comes to light when the business contacts the customer to establish why payments are not being made, instigating reputational, legal or financial damage for the business as the customer wonders how their details were obtained by the fraudster in the first place”.

Technology has played a role in making it easier for fraudsters as they simply use desktop publishing tools to scan and duplicate a variety of corporate documents – such as purchase orders, invoices, bank statements, cash and credit card receipts or even stock certificates – containing company logos, he says. “It is vital that these documents are properly destroyed by shredding them and not carelessly throwing them away in exposed bins”.

He says small businesses, especially those located in rural areas, may be at more risk, as they are often under the misperception that only larger organisations situated in urban areas are targets for corporate identity theft. “This is actually not the case. Businesses of all sizes and in all locations can be exploited and must therefore employ effective document destruction practices”.

Lorenzi advises businesses seeking the services of a reputable document shredding company to ensure the company has been certified by the National Association for Information Destruction (www.naidonline.org), the international trade association for companies providing information destruction services, to ensure compliance with legislative requirements and industry best-practice for document destruction.

Those businesses not practicing sound document destruction are simply placing the organisation, employees and clients, under unnecessary risk of identity theft, concludes Lorenzi.

* Gianmarco Lorenzi is the managing director at Cleardata.

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