When it comes to defrauding the tax system, it is not just individuals who are victims. Stolen identities are used to try and claim benefits fraudulently. When this happens, identity crime becomes a risk to public revenue - revenue which is used to fund vital services.
Regardless of age, gender or income, we are all potential targets of identity theft. Your 'identity' includes bank account information, tax file number, your birth date or current address as well as passwords and credit card details.
For individuals whose identity is compromised, it is more than just a financial strain. Less frequently publicised is the emotional turmoil victims often experience as they attempt to reclaim their identity.
Uncovering debts, cancelling and reapplying for bank accounts, trying to clear your credit rating and re-establish your identity with multiple organisations can take many hours over an indefinite period of time. Some people have reported it taking years to recover their identity.
The ATO and its partner agencies are working to combat identity crime and prevent stolen identities being used for illegal purposes. For example, the ATO uses intelligent systems that automatically detect tax returns that are suspected of being lodged fraudulently using another person's identity.
Our risk and fraud detection models help ensure incorrect, invalid or fraudulent refunds are stopped before ever being paid out.
Between 1 July 2011 and 30 November 2011, the ATO's identity crime detection systems uncovered more than 7,300 suspect income tax returns with refund claims of around $36 million.
The best way to minimise the financial and emotional impact of identity crime is by reducing the number of potential victims. By being alert and keeping personal details secure, all individuals can play a part in stopping identity crime.
Help is available for people who have had their TFN lost, stolen or misused. Call the Client Identity Support Centre on 13 28 61 between 8.00am and 6.00pm, Monday to Friday. Information on how to protect your identity is available on the ATO website.
Case studies: Picking up the pieces
All persons mentioned in these scenarios are fictional.
Mary's pension was suspended after the ATO advised Centrelink that she had earned income above her pension threshold. However, Mary had not earned any additional income during that period. Mary rang the ATO to find out what was going on. The ATO's investigation found that Mary's identity had been used to try to claim a fraudulent tax refund. The return was subsequently reversed but Mary went several weeks without her pension.
Simone called the ATO after being contacted by a debt collector in relation to a car that it appeared she had purchased. She knew nothing about the purchase of this car. Someone had purchased the vehicle using finance and also applied for an Australian business number using her identity. Simone was required to prove that she had not purchased the car and was concerned about the effect that this would have on her credit rating. She was also worried about what other finance had been obtained unlawfully in her name that she didn't know about. The ATO advised her to contact the police and obtain a credit reference check. It took Simone several months to regain her identity.
Did you know?
A 2003 study commissioned by AUSTRAC indicated that identity fraud costs the Australian economy $1 billion every year.