Mr. Chair, I am pleased to take part in this debate on credit cards. This debate is quite timely given that this is the Christmas season, a time when Canadians tend to spend more and when some of the bad guys in our society are out in full force looking for ways to defraud individuals and businesses.
For many Canadians the payment of choice, be it at Christmas or any other time of the year, is a credit card. Some people love them because they offer a convenient way to buy things and defer payment. Others hate them because of the high interest charges on unpaid balances and the fact that with these cards people tend to spend more than they can afford because credit is so readily available.
It is estimated that in 2003 over 50 million Visa cards and MasterCards were in circulation, in addition to credit cards issued by department stores, such as Zellers, The Bay and Sears. Cards are also issued by American Express, Diners Club, and even gas stations, such as Petro-Canada. The credit card business is big business in Canada. In fact, Canadians carry an average of 2.6 cards. One would be hard-pressed to find a working adult in this country who does not have or has never had a credit card. Credit cards have become a way of life for Canadians in terms of the way they manage their financial affairs.
For those who are able to use these cards responsibly, they are a good thing to have. Unfortunately, there are many people in our society who, dare I say, should not be using credit cards at all. They are the ones who use their credit cards as though it was free money. They are the ones who gladly apply for a different credit card every time an unsolicited application is received in the mail. They are the ones who have a hard time repaying these debts.
Unfortunately, the ones who can least afford to pay are often targeted by stores and financial institutions because that is where the institutions make their money, in interest payments. Surely, the onus is on the individual to say no, cut up the credit card or manage it well, but not all of us have that discipline.
That being said, I would like to address an issue which is also related to credit cards and their use, and that is the issue of identity theft. There has been some discussion in the House on that particular point, although some of the questions have never really been answered on the government side regarding this issue. It is a very important topic associated with credit cards, interest rates and everyone's identity.
Last October I attended the second International Conference on Identity Theft sponsored by the anti-rackets section of the Ontario Provincial Police. This conference brought together a number of speakers from Canada and the United States with expertise in the areas of identity theft, telemarketing, biometrics and terrorism. This conference allowed for the exchange of information among those who are involved in a fight against identity thieves.
Identity theft has been around a very long time but has now become a rapidly growing problem. It is the fastest growing crime in North America today. Identity theft helps facilitate a number of other serious criminal offences, such as fraud and fraudulent activities, organized crime and terrorist organizations. In fact, terrorists hide their true identity through the use of other people's identities that they have stolen.
It is estimated that identity theft costs Canadian consumers, banks, credit card firms, stores and other businesses $2.5 billion a year. There are a number of factors that have contributed to the increase of identity theft. We are probably approaching a period of time where this problem, which is a huge problem right now, will become unmanageable in the very near future.
Easy credit is a contributing factor. Canadians are continually being bombarded with unsolicited credit card offers from financial institutions. Not only are these offers open to theft, but they also make it easier for others to obtain credit in other people's names.
Let us face it, identity thieves will rummage through the trash in order to find incoming mail, such as pre-approved credit card offers and send them back to the issuing financial institutions and request that the card be sent to a new address. Credit card fraud is perhaps one of the most pervasive identity theft crimes in Canada. It is estimated that card fraud rose by some 19% in the year 2002.
Another contributing factor is the fact that very well versed technology oriented individuals can take information from the magnetic strip of a credit card. They obtain the information through what they call skimming or swiping the credit card. It is stolen. It is skimmed, in other words, all the information is taken off the back. They use an electronic device that is called a skimmer. They will take the customer's credit card and swipe off all the information.
This will occur in places like shops, restaurants or wherever anyone may pay with a credit card. Once that information is taken from the magnetic strip, out come the cards and they will use them to the maximum. With these counterfeit cards in hand, the identity thief can use the card to purchase very expensive merchandise that can be sold for cash, and this money in turn is used for other criminal activity.
Another contributor is hacking of company databases. With the advancements of technology and increased Internet use, it has become easier for thieves to obtain personal information and have far more ways in which to use that information fraudulently.
How many times have we heard on the news or read in some newspaper that a company's computer database has been hacked? Computer hackers have been known to break into computer databases and obtain personal information, such as an individual's credit card data which can be used to their own advantage.
However, while theft is perhaps the most obvious form of credit card fraud, it is certainly not the only way fraud occurs. I suppose this is the beginning of the crime of identity theft. I recall, in my former life as a police officer, how thieves would take the discarded carbons that were used on credit card slips. They were inadvertently thrown into the garbage can, but that information was very valuable in transferring it over to someone else. That identity would be taken and another card made up with the information on it.
It has now become more sophisticated. It is now tapping into computers. It is now obtaining information from the mail and transferring all that information over or even creating that information and applying for a credit card.
Of course there is always the age old problem where dishonest employees will make an extra imprint of one's credit card and take it for their own personal use. That is going to happen, but that is not the serious part of this crime.
I think many Canadians would be surprised to learn that in this country we do not have a separate offence for identity theft. Granted there are provisions in the Criminal Code that relate to identity theft, such as fraud, obtaining credit by false pretense, fraud and forgery, but in many instances the Criminal Code requires proof that the accused intended to gain advantage by means of fraud.
It is high time we looked at the offence seriously and that we cut off the supply for those organized criminals who use identity theft as a means of making a living and perpetuating further crime. We should have charges like our neighbours to the south have, aggravated identity theft, that will bring two to five years depending on who commits the crime or what the crime is added consecutively to all other sentences served, especially when it comes to hiding one's identity as a terrorist.
I appeal to the House to seriously look at those issues that will prevent financial ruin, damage reputations and certainly ruin credit ratings for those who do possess cards and use them legitimately.