Thank you.
Good afternoon, Mr. Chair and honourable members of the committee. Thank you very much for inviting us to be a part of today's hearing. Here with me is Inspector Kerry Petryshyn, officer in charge of major fraud and bankruptcy within our commercial crime branch.
I appreciate having this opportunity to present the RCMP's perspective on the current state of identity theft and fraud in Canada.
White collar crimes come in many different forms, including mass marketing fraud, payment card fraud, identity theft and identity fraud, capital markets fraud, and money laundering, as a few examples. The significant growth of technology and the widespread use of computers have led to great advances in research and global communications, but they've also opened the floodgates for enterprising criminals. Technology has had a significant impact on the manner in which economic crimes are committed, their frequency, and the challenges faced by investigators dealing with this type of crime.
As businesses and financial transactions become more and more Internet dependent, new opportunities are emerging to facilitate financial crimes. Before computers and the widespread use of the Internet and other associated technology, stealing and using another person's identity was a relatively difficult crime to commit. Criminals had to invest considerable time and effort in the process, and the risks were high. To assume someone's identity, a thief had to break into a house, or steal a purse or a wallet. Today's technologically adept thieves can do just as much damage in the time it takes to swipe your bank card through the reader at a cash register.
The same technology that has made our lives more convenient by allowing us to shop from home and operate in a virtually cash-free marketplace has also given rise to countless new criminal opportunities for identity thieves.
They can now steal your personal information from the comfort of their home offices half a world away, taking advantage of everyday transactions that require people to share personal information for identification purposes.
The growing impact of identity theft and fraud is deeply troubling. A 2008 EKOS survey found that 9 out of 10 Canadians were somewhat concerned that they could be victimized by identity theft and fraud. The survey also indicated that Canadians ranked the economic crimes of fraud and identity theft as their number one concern, more troubling than terrorism, organized crime, and gang violence.
That's why we have to view economic crime as being every bit as serious as many other types of criminal activity. It is true that identity theft and fraud, for example, are less physically dangerous than many types of criminal activity; however, their social damage can be very severe and can undermine the trust that people have in their society.
The cost to a person who has had his or her identity stolen can be enormous: financial loss and the investment of hundreds of hours trying to re-establish identity and good credit all take their toll.
A recent study by McMaster University estimated that in 2008 1.7 million Canadian identity theft victims spent 20 million hours and $150 million clearing their names. Of course, individuals aren't the only victims. Stolen identities are also used to commit frauds involving government services, benefits, and official documents. Financial institutions and retailers, the foundation of our economy, suffer growing losses every year.
Evidence indicates that identity fraud isn't just committed by enterprising individuals. Organized criminal groups are also applying their considerable resources to this expanding field of opportunities.
Quantifying the damage is extremely difficult. Many instances of this type of fraud go unreported, so definitive statistics are hard to come by. PhoneBusters, the Canadian Anti-Fraud Call Centre jointly operated by the RCMP, the Ontario Provincial Police, and the Competition Bureau of Canada, can only maintain statistics on the complaints they receive. In other words, the more than 11,000 complaints received by the call centre in 2008 reflect only a small percentage of the problem.
The Canadian Council of Better Business Bureaus indicated that identity theft was the fastest growing type of fraud in North America, with the cost to consumers, banks, credit card firms, and retailers estimated to be in the billions of dollars each year.
Raising public awareness about protecting personal information is currently the best tool we have for preventing identity fraud. Along with members working in RCMP detachments across the country, members in our financial crime units make numerous presentations to educate the public on this issue.
Whether these presentations are made to businesses, government agencies, or community groups, the messages are the same: protect your personal information, shred unwanted personal documents, and be wary of suspicious e-mails. Prevention is still the best cure, but prevention can only do so much.
Identity fraud is clearly emerging as an immense problem. In consultation with key stakeholders and other law enforcement agencies, the RCMP is developing an identity fraud strategy focusing on criminal intelligence and analysis, prevention through education and awareness, and disruption and enforcement.
We are also heading up the creation of an international identity fraud working group, the objective of which is to obtain an overview of other countries' identity fraud strategies, discuss related joint priorities, and develop an international strategy.
Currently the Criminal Code does not contain specific offences pertaining to identity theft. Most Criminal Code offences relating to property crimes were enacted before computers and the Internet were even invented. While the Criminal Code addresses most fraudulent uses of personal information by identity thieves, it does not address the unauthorized collection, possession, and trafficking of personal information for the purpose of future criminal activity.
As I indicated in my opening remarks, the changing environment is one of the greatest challenges we face in our efforts to combat financial crime. The growing sophistication of this type of criminal activity is abetted by the same techniques and technologies that spur legitimate opportunities for business.
Why be reactive when we can be proactive? We must be constantly examining our environment to identify new tools that can greatly assist us in investigating white collar crime.
Bill S-4 will close legislative gaps that currently allow criminals to collect, possess, and traffic in personal identification information and documents. Legislative amendments aimed at closing the identity theft gap would help the RCMP and other law enforcement agencies protect not only individual Canadians but also the integrity of our economy. We welcome laws that will move us closer to this goal.
Mr. Chair and honourable members of this committee, that concludes my prepared remarks. Now we will be happy to answer any questions you may have.
Thank you.