IDENTITY FRAUD

Ever been offered credit card flyers and applications everytime you visit the malls? Before falling into the trap of applying credit cards through these people, think again. You may fall prey to a syndicate which victimize unsuspecting individuals through what is more popularly known as Identity Fraud.

Identity fraud is aptly defined as having to acquire, (steal) and assume another person’s identity in order to commit a crime. Under our jurisdiction, identity theft or stealing one’s identity may be punishable under different provisions of the Revised Penal Code depending on the circumstances of every case. In instances when the identity theft was performed in order to commit credit card fraud- the violation is that of R.A. 8484 otherwise known as The Access Devices Regulations Code of the Philippines.

How does identity theft predicate the commission of R.A. 8484?

In recent times, we have seen syndicates posing as credit card company agents distributing account applications in malls and highly populated areas. An unsuspecting victim who falls prey to their scheme would be made to fill-up an application form in the process writing thereon his personal circumstances. As soon as the applicant finishes with the form, he is informed that the agent would make preliminary processing of the application form and that the applicant would just be notified in the future if the application is approved.

What happens next is totally beyond the knowledge of the applicant.

The syndicate would take out another application form from the same card company or other companies and assume the identity of the unsuspecting victim. The suspect accomplishes the form and then submits falsified credentials still in the name of the real applicant. They would proceed to set up their cohorts to act as the character references of the legitimate applicant in the event the card company verifies on truthfulness of application and thereafter, upon receipt of the card, suspect activates it himself. “Security questions” pose no problems as legitimate applicant has already supplied it himself. We have discussed in previous discussions the issues with security questions.

Once the card has been activated, the suspect is forced to produce identification cards in the name similar to that appearing on the card and uses the same in all transactions he would perform. In this case, there is no need to forge any signature as he becomes the first person to sign on the card, making it easy for him to sign on all subsequent invoice slips.

From the so many existing schemes in credit cards, this appears to be the easiest and most effective because as earlier explained, the suspect who simply assumes the identity of the legitimate applicant, do away with the difficulty of copying applicant’s signature. No need for skimmers and other electronic tools or equipment. No need to coordinate with their friends in the NSO or DFA. To reiterate, the perpetrator’s signature is the one submitted to the card company making it easier for him to sign his signature on the card and all subsequent invoices. Likewise, under this MO, damage is usually high as the card has no existing balance and perpetrator gets to consume entirety of the allowable purchases/usages. Purchases are usually performed at a fast pace and the fraudulent transactions are most of the time not stopped as card holder absconds after the purchases and the legitimate applicant’s name is the one recorded in the system as having money obligations with the card company. As the address recorded in the system is that of the suspect who absconded, billing statements are returned unreceived. Should the card company decide to pursue a case, the unsuspecting applicant gets surprised when in the future he discovers that a case was actually filed against him.

The sad part is that while “identity fraud” is clearly a precursor in the commission of card fraud, such activity by itself is not really punishable in our existing laws. With this, there is a need for an amendment on R.A. 8484, to penalize “Identity Fraud/Identity Theft separately. While the production, submission and possession of falsified documents is already defined and penalized as Falsification (Articles 171 and 172) under the Revised Penal Code, a specific law penalizing said acts should be enacted, if the same is performed with the intent of securing an access device.

Another point, we have seen how dirty money is generated out of credit card fraud. Proceeds coming from credit card related frauds are laundered to legitimate or illegitimate activities yet, a Violation of R.A. 8484 is not among the predicate offenses under R.A. 9160 (The Anti-Money Laundering Law) as amended by R.A. 9194. If an amendment of R.A. 9160 is made, it should already include credit card related frauds as among the “illegal activities” predicate offenses).

Lastly, experience show that when a fraudster is arrested by law enforcement, the delay in the filing of the case is mostly attributed to the delay by the card company to submit the necessary certifications to prosecute the offender. This holds true during Inquest Proceedings when the card company and/or the legitimate owner of the card is/are located outside the Philippines and law enforcement is either forced to file a case with incomplete evidence, or release subject/s to avoid being charged with Arbitrary Detention.

So the next time you visit your nearby mall, better think twice before you accede to invitations to apply for credit cards. For all you know, the one offering you with the forms may be those belonging to the syndicates that are trained to spot the vulnerable. They have perfected the art of sweet talk and unless you have heard of this MO before, you may well be on your way to accomplishing the forms they give you. The best question may well be to ask yourself if you need a credit card anyway.