Identity theft: how best to handle the situation07May2015
What is identity theft?
Identity theft is an increasingly common type of fraud involving the assumption of part or all of a pre-existing identity for the purpose of obtaining monetary or other benefits. Identity theft can be committed in a number of different ways, including stealing or scanning credit card details or banking passwords, and through unsolicited emails and telephone calls requesting personal information.
One of the most common means by which identity theft is committed is via the internet, particularly through email hacking, where high value transactions are targeted and intercepted by fraudsters who then redirect the scheduled payments to be made to their own bank accounts via remarkably similar or hacked email accounts.
What should my next steps be?
Call the Hong Kong Police.
If you fall victim to an identity crime, your main objective will be to locate and recover your funds. Your first step is to contact the Hong Kong Police (see contact details below).
Once the crime has been reported the Police can temporarily freeze the funds in the bank account that they have been transferred to until we are able to obtain civil orders to the same effect.
Once we have received your instructions, we will make an application to the Court to obtain injunctive relief to freeze the funds, and file a Writ in the appropriate court (depending on the value of the claim, this will either be the District Court or High Court). We will then serve the Writ on the Defendant, either an individual or company that has received your funds into its bank account.
What we can do
Trace the assets
Norwich Pharmacal order
These are third party orders, ordinarily served on banks that maintain the bank account to which your funds have been transferred. They compel the bank to disclose all relevant information they hold about the recipient of your funds, including all documents relating to the relevant banks account/s, such as the account holder, account activity, and what, if any, funds remain in the account.
You will be required to pay the bank’s reasonable legal and administrative costs, however more often than not these orders go uncontested, meaning the bank served with such an order will comply with the disclosure required of them without incurring significant legal costs.
Preserve the assets
Mareva injunction (MI) – freezing order
We can apply for these orders at any stage pre- or post-judgment. They are served on the Defendant and any other party thought to hold funds or physical assets relating to the fraud. They ensure that such assets are not dissipated or moved by the Defendant or any related party for the time the order remains in effect. Such orders are, however, only enforceable in relation to Hong Kong based assets.
Where assets are held outside Hong Kong, and where there is both an identified risk of those assets being dissipated, and there are insufficient funds held within Hong Kong to satisfy judgment, the Court may grant an injunction covering both Hong Kong and internationally based assets. These orders are less common, and come into effect only once adopted by the relevant jurisdiction.
Anton Piller order
There are certain cases in which there is either evidence or property belonging to the Plaintiff in the possession of the Defendant that is at risk of being disposed of or destroyed before the case is to be heard.
An Anton Piller order allows Plaintiffs, through their lawyers, to search a Defendant’s property and seize and preserve such evidence until the case is heard. Such orders are only granted where there is a significant risk of the property being destroyed, and where “harm to be caused by the execution of the Order upon the fraudster and its business affairs must not be excessive or unjustly disproportionate to the legitimate object of the Order” (International Asset Tracing and Recovery – Hong Kong, Jeff Lane).
Pre-judgment prohibition order
These orders are used to prevent the Defendant from leaving Hong Kong before the case is heard, provided it can be proven that there is a solid cause of action against the Defendant, and they ordinarily reside or conduct business in Hong Kong.
Criminal proceedings are often lengthy and complex, and are rarely involved in the tracing and recovery of assets; however they are an effective way to deter others from committing similar offences and offer an additional sense of satisfaction to you if you are affected by such an offence.
Advice for clients seeking legal advice regarding identity theft
– Act immediately. In cases of identity theft and internet fraud the money tends to be moved very quickly and there is always a possibility that you are not the only victim. Your chances of recovery will be greatly increased if the relevant bank accounts are frozen before your funds are transferred out.
– Unfortunately, once you commence proceedings, the court requires you to provide an undertaking in damages guaranteeing that you will pay damages to the Defendant and any third parties affected by the orders sought should they apply and have the court rule that the order should not have been granted in the first place. If you ordinarily reside outside Hong Kong, the Court may also require you to fortify the undertaking by paying a sum of money into Court.
– Should the Defendant be overseas at the time of initiating proceedings, additional orders will need to be sought in order to serve the Writ and the various orders upon the Defendant. Therefore further costs will be incurred.
What sort of success rates can you expect?
Success rates for recovery of funds in these cases depend largely on how quickly you act once the fraud has been committed, and are considerably higher if the recipient’s bank account is frozen prior to the movement of your funds out of the account.
How long will it take?
Once we have been instructed and commence proceedings we would expect to obtain a disclosure / freezing order within 48 hours or less. Once the account is secured, in a straight forward case where the Defendant (the account holder of the bank account that received your funds) does not contest, it will generally take around 3 to 4 months to recover any money remaining in the bank account of the Defendant. If the Defendant is outside Hong Kong, it can take a month or so longer to recover the monies remaining in the bank account of the recipient.
Police contact details
Phone: (852) 2527 7177
For further information or advice, please contact Jeff Lane. Jeff is a Partner in our Litigation team at Tanner De Witt and specialises in Fraud and Asset Tracing and Recovery.
Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.