Tag Archives: property crime

Why Traditional Crime Measurements Don’t Tell the Whole Story

All over the nation, the question is being asked, “Why is the overall crime rate in the US on the decline?”

We have the answer:  “It’s not.”

In 1930, the FBI was given the task of collecting and publishing crime-rate statistics from across the country, and the UCR (Uniform Crime Reporting) Program was born. This program collects data from across the country, and it is published in several reports, including the often quoted Crime in the United States report. The report separates offenses into two categories: violent crime and property crime. 

These two categories appear to provide an adequate sample of the types of crimes that should be captured to measure the overall crime rate, but the four “property crime” categories fall short. There is a simple reason: They have not changed since the 1920s.*

For instance, the category of larceny-theft does not include embezzlement, confidence games, forgery, check fraud, etc. Identity theft, which is growing astronomically, is also not included.

According to the two entities within the federal government that measure and report identity theft rates — the Federal Trade Commission’s (FTC) Consumer Sentinel Report and the Bureau of Justice Statistics — identity theft crime rates continue to increase. Identity theft has been ranked as the #1 complaint reported to the FTC for the past 13 years. Of the 2,061,495 complaints captured from a variety of organizations that share data with the FTC, 369,132 were regarding identity theft.

The Bureau of Justice Statistics uses the National Crime Victimization Survey (NCVS) to capture and report its statistics on identity theft.  The last report available captures information from 2005-2010. According to this latest report, approximately 8.6 million households experienced financial identity theft.

The latest statistics available (2012) are from Javelin Strategy & Research Inc., an independent organization not affiliated with the federal government.  Their study concluded that there have been 12.6 million incidents of identity fraud.

Identity theft is increasing faster than property theft crimes are declining, but the public isn’t paying enough attention.  The reasons for apathy include the misconception that one can’t be a victim without a stellar credit rating (i.e., my identity isn’t worthy stealing) and the conspiracy theorist notion that this is all just a scare tactic promoted by industry to entice consumers into buying services that are unnecessary. Both are misguided.

A change in public perception is required. It has been engrained into us that we must take personal responsibility for safeguarding our possessions and our physical wellbeing, so why not our identity?

Most people realize that they cannot guarantee they will never be burglarized.  So they employ tactics to make it harder to break into their home.  When leaving for vacation, they secure doors and windows and activate alarms.  Often, mail is held at the post office and friends are asked to check in on the place.

People must likewise actively guard their identity components (such as passwords and devices).  Taking regular steps to safeguard your identity must become engrained in all of us.  It’s absolutely true that you can do everything right and still become a victim of identity theft – but why not make the thieves work hard?

Ask anyone if they would think twice about wandering into a dark alley, alone, at night, in a dicey neighborhood, and they would say, Absolutely! But consumers think nothing of going to strange websites and entering credit card (or even more personal information) without checking the legitimacy of the site, especially when you can get a screaming deal on that flat-screen TV or tablet.

It is widely recognized that fraud and financial crimes don’t scare or shock people in the same way that violent crimes do.  Unless they rise to the level of Bernie Madoff or Enron, the crimes rarely make headlines.

Additionally, financial crimes are often cited as much harder to accurately measure because of underreporting and lack of consistent reporting methods.**  Some individuals do not believe that financial crime victims suffer true harm, especially if they are eventually made financially whole, as can happen with some identity-theft victims.  There is a misconception that once an individual has false charges removed from a credit account, or false accounts removed from a credit report, or a false tax return remedied by the IRS, that they are no longer the victim.  The victim label is assigned to the entity that takes the financial hit, such as the credit card issuer/financial institution and the IRS. Regardless, a crime has still been committed. Even if the crimes are difficult to measure and don’t shock, they certainly should be included in our evaluation of crime rates.

The infiltration of technology into our daily lives has not only changed the way we live, it has changed the way crimes are being committed. Much like water, criminal elements will take the path of least resistance.  When law enforcement and society become adept at suppressing scofflaws by making a particular crime more difficult to commit, such as through anti-theft devices on cars, criminals move on to other crimes.

Non-violent crimes rates haven’t decreased; they have just changed. Whereas the criminal of twenty years ago was armed with a knife or a gun, today’s criminal is armed with a keyboard or skimming device. The weapon(s) of choice has changed from tools of violence to tools of technology.  Criminals aren’t committing fewer criminal acts, just different ones. We don’t have fewer criminals, only smarter ones.

* Upon inquiry, the FBI responded with the historical information to explain how the eight offense classifications known as Part I crimes were chosen as indicators of the overall crime rate in the country.  The first seven offenses were originally chosen in 1929.  Arson, the 8th offense was added in 1979. The 7 original offenses chosen to illustrate the overall crime rate and used in the annual publication Crime in the United States were not altered at that time.  In fact, they have remained mostly unchanged since the 1920s.

** The FBI has a Financial Crimes Report that is listed under its “Other Reports and Publications” section. Other offense data for fraud and fraud type offenses is captured in the FBI’s NIBRS (National Incident-Based Reporting System); however, identity theft is not one of the incident types captured.

The Financial Crimes Report(s) differ in format from the violent crime/property crime format in the UCR and are more difficult to decipher.  The data contained in these reports is for cases investigated by the FBI.  It does not include financial crimes cases for local jurisdictions throughout the United States as the UCR does.  The most recent report shows 5 year trends in various categories.  The categories of  Corporate Fraud, Securities and commodities fraud, health care fraud, and mortgage fraud (reported cases) all show increasing numbers. Financial institution fraud, insurance fraud, and money laundering case statistics show a decrease in numbers and mass marketing fraud has stayed relatively flat.

The NIBRS report for 2011 indicates there is data on the following fraud type offenses: Bribery – 293; Counterfeiting/Forgery – 74,131; Embezzlement – 17,000; Extortion – 1217, and Fraud Offenses – 245,301. This a total of over 330,000 known incidents that could be counted in the overall crime rate in the UCR.  Though small in comparison to the other property crime numbers, it is not a statistically irrelevant number.   Identity theft statistics are not captured on this report.  Identity theft statistics are published by another department within the USDOJ (of which the FBI is a part), the Bureau of Justice Statistics.

Copper Theft Solution Reduces Claims For Construction Sites

Copper theft presents a significant challenge for loss control.

Unlike other property crimes where “recovery” goes a long way toward mitigating the loss, such as the recovery of a stolen car in an auto theft, the recovery of the stolen copper seldom impacts the size of the claim.

Copper theft is different because the damage done to a building stealing a few hundred dollars' worth of copper can cost insurers tens of thousands of dollars to repair. The typical copper theft claim involves the damage done ripping wires and plumbing out of walls or the coils from a rooftop HVAC system. In vacant buildings, thieves target water lines and sprinkler systems as well as the electrical wiring. Once a vacant property has been hit, thousands of dollars must be spent to bring it back up to code before it can be occupied. It is this “collateral damage” that makes copper theft claims so expensive to an insurance company.

The key to reducing copper theft claims is prompt police response. The faster law enforcement arrives, the less time thieves have to damage the property. Faster police response is what wireless video alarms deliver and why they are a valuable tool for loss control against copper theft.

Copper theft has impacted insurance companies across North America, becoming a mainstream problem covered by television news. The following reports from television news underscore much of what this article is attempting to communicate — a new paradigm to mitigate risk and reduce claims impacting the real world from Virginia to Arizona.

Construction crime is a close cousin to copper theft and has been a black hole for risk management with few affordable solutions. The nature of construction risk is temporary and this means that wired surveillance cameras and alarm systems are simply too expensive and cumbersome to install to make them cost-effective.

The technology challenges are significant: in addition to limited budgets there is often no power, no phone lines, and no easy access to internet. Policy holders do not want to spend large amounts of money for temporary infrastructure that has no value after the job is done. For construction, human guarding is the most obvious approach, but it is beyond the budgets of many job sites. With guarding cost prohibitive, from a loss control perspective there have been very few affordable options for mainstream policy holders to protect their projects. Construction remains a problem child for many insurers who are forced to raise deductibles and implement exclusions to make construction profitable.

The following newscast from Buffalo, New York describes the challenges of securing a construction site and successes found with wireless video alarm systems.

While human guards have become too expensive and unreliable for many sites, technology is improving and loss control has a new tool to secure construction sites. Portable wireless video alarms give loss control professionals an affordable tool to deliver police response to a job site before the damage occurs. These new wireless camera/detectors (called MotionViewers) sense an intruder and send a short video clip of the incident over the cell network to a central monitoring station for immediate review and police dispatch and priority police response.

The immediate review/response with a monitored video alarm has proven more effective than human guards as the sensor/cameras are installed in multiple points across the job site to detect and report any activity. The crucial factor in reducing claims for copper theft is immediate police response, and video verified alarms make all the difference — the monitoring central station operator is a virtual eyewitness to the crime.

Police treat a video verified alarm as a crime-in-progress — they respond faster and they make arrests. Case studies on video verified alarms have arrest rates of over 50%. One construction site in Arizona had 40 arrests over four months on a single site. Arrests make a difference because one arrest prevents an additional 30 crimes — copper theft is typically done by habitual thieves who target construction sites or vacant property.

To be affordable and effective, the camera/sensors must be easy to install, without the cost of trenching cables and running wires. Power is a challenge as many construction sites have only temporary power provided by generators during working hours. Many vacant building have no power at all.

The wireless Videofied alarm systems need no infrastructure to secure a site. They operate for months or even years on batteries, communicating over the cell network to the central station. These portable MotionViewers are more effective than fixed cameras because they can be moved to protect the assets on a job site as the project evolves. Portability is important because construction theft is often an inside job by a subcontractor familiar with the delivery and location of expensive materials or assets — and they know the locations of fixed cameras and how to avoid them. In contrast, magnetic mounts on the wireless MotionViewers enable the job supervisor to move the cameras, placing them on steel studs and tool cribs at the end of the day to protect what is most at risk.

Wireless video verified alarms for outdoor applications mean that loss control professionals have an effective tool to fight copper theft that is affordable enough for implementation by their policy holders. For more information visit www.videofied.com.

Video Verified Alarms And Priority Response – How Does It Work?

Traditional burglar alarms have lost much of their value as a tool for loss control, but video alarms are taking their place. Police response to burglar alarms is degrading and in many cases police departments have stopped responding to traditional alarms unless they are verified.

Millions of traditional alarm systems have created an enormous problem, wasting shrinking police resources on millions of false alarms. It is a big concern that has the attention of national law enforcement leadership.

International Association of Chiefs of Police (IACP) president, Chief Craig Steckler specifically addressed false alarms as a key issue in his inaugural address of October, 2012, “According to studies, last year there were more than 38 million false alarm calls in the United States. In many agencies alarm calls were the number one call for service, and statistically, these calls often account for nearly ten percent of all the calls for service the agency handles on an annual basis. Additionally, every study of the issue continually finds that 95 to 99 per cent of all alarms are false.” Chief Steckler bluntly states, “We must take a critical look and unbiased look at false burglar alarms, and determine whether in the new norm, this type of call (police responding to alarms) is truly a prudent use of severely limited resources.”

Chief Steckler is not exaggerating. Police consider traditional burglar alarms an enormous waste of resources. Officers no longer make arrests, and alarm companies focus on selling deterrence instead of apprehensions. From the police perspective, many simply no longer care.

The situation has degraded to the point that many major cities like Las Vegas, Salt Lake City, San Jose, and Milwaukee stopped responding to traditional burglar alarms altogether. This trend is gathering momentum. The public/private partnership of the police/alarm company/insurance industry has atrophied, and neither the police nor underwriters find effective loss control in traditional burglar alarms.

In contrast, this video underscores the value that law enforcement places on video verified alarms to combat property crime. The president of the National Sheriffs Association describes Priority Response and how effective they are at delivering arrests. There are many actual video clips of real burglaries in the video itself.

Response Differentials
Video verified alarms are an increasingly important evolution to combat property crime. They continue to deliver priority police response and lead to arrests. The reason is the video verified alarms mean that police respond faster to the alarm, making arrests and reducing claims.

The “response differential” between a traditional alarm and a video verified alarm is significant. The following chart illustrates the differences in different sample cities across the USA: large and small, east and west, north and south. The key issue is that video verified alarms deliver police response faster, around 15 minutes faster in many jurisdictions. Those 15 minutes makes a big difference in reducing claims for property crime.

Jurisdiction Video Alarm Traditional Differential
Boston, MA 7:38 21:00 13:22
Charlotte, NC 5:10 13:30 8:20
Chula Vista, CA 5:05 19:18 14:13
Watertown, MA 4:00 23:00 19:00
Fairfax County, VA 6:00 18:02 12:02
Salinas, CA 2:54 39:25 36:19
Amarillo, TX 10:06 19:24 9:18

Real Examples Of Alarm/Police Interaction
Perhaps the most effective way to illustrate the value of video verified alarms is to show 4 actual examples of real events with different outcomes based upon the alarm and jurisdiction. This is what the alarm business really looks like from the police side of things. Two of these examples lead to arrests. Insurers must realize the importance of central station dispatchers using video to become virtual eyewitnesses to a crime in progress.

All of the examples are not positive. In the final alarm, the 911 call taker says to the central station operator: “This doesn't meet our criteria for response,” meaning that the municipality won't respond to the alarm without the video verification. The central station operator sounds a bit stunned on the phone. But this is the scenario that is happening increasingly around the country. This last example is what insurers are trying to avoid by promoting video verified alarms to their policy holders.

Now What?
We need a strong public/private partnership to combat property crime. Underwriters must answer the question, “How can we encourage policyholders to use video alarms and police response to reduce losses?”

One answer would be to join the Partnership for Priority Video Alarm Response (PPVAR), a nonprofit public/private partnership based in St. Paul, Minnesota. The organization brings together alarms companies, insurers, and law enforcement to promote Priority Response and Video Alarms to reduce property crime and insurance losses. The PPVAR board of directors includes law enforcement, alarm companies and the National Insurance Crime Bureau (NICB) that is supported by 1,100 property/casualty insurance companies.

To further strengthen leadership from the insurance industry, the PPVAR recently added Verisk Crime Analytics Vice President Anthony Canale to its board of directors. There are now two strong insurance organizations to help build the partnership with law enforcement and the alarm companies. Verisk owns and operates national crime databases that provide services to the construction, retail, transportation, manufacturing and insurance industries.

“Our involvement with the PPVAR fits with the mission of Verisk Crime Analytics to use data and analytical tools to support public safety operations and to help our clients reduce the impact of crime,” said Canale.

As the successes grow, the PPVAR is expanding its membership in the insurance industry — individual insurance companies joining the partnership and embracing the message. The PPVAR welcomes additional insurance companies and associations to work with us to help use video alarms to reduce claims and losses.