'Tis the Season for Identity Theft

Chad Boeckmann, CISSP, GSEC

Did you know that identity theft is currently the fastest growing financial crime in America? With the holiday shopping season upon us your risk for becoming a victim of identity theft will increase. The number of individuals that have become a victim to identity theft is increasing at 30% each year; in 2002 the number of new victims was 900,000. Experts have predicted that by the year 2005 the number of new victims will exceed 1.5 million.

How does identity theft occur?

Identity theft occurs when someone has acquired your Social Security number, credit card number, bank account number or other personal identifying information. The individuals who obtain this information use it to commit fraud and other crimes. There are numerous ways to gather such sensitive information from an individual. Some ways this is accomplished is by gathering your confidential information through unsecured gateways that exist on the Internet. Others obtain the information through public records, social engineering (tricking an individual into supplying the information), or steal business information. There are some that use old-school methods to gather the same confidential information. They do so by perusing through mailboxes, stealing wallets and purses and digging through trash. The average cost to a victim of identity theft is investing 175 hours of their time over two years and out-of-pocket expenses of between $800 and $1700 to repair the damage. This does not consider the cost of losing ones’ good name and sense of well-being.

The Underground Ring

I recently attended a security conference that had a speaker who specialized in identity theft cases. This true-life scenario happened to a man in Canada: A man went to the liquor store to purchase a few bottles of wine for a diner party he and his wife were hosting that evening. When the man went to the counter, he paid for the bottles of wine with his credit card. The cashier behind the counter pointed to a display behind the man and said, "Did you see our wine which is on clearance?" As the man turned to look at the display, the cashier took his card a swiped it on a small device that was wore on the cashier's hip. This device captures credit card information and will hold information on up to 20 credit cards. The man signed for his purchase and went home not expecting a week later to discover he is in great debt. What happens next is unbelievable. The cashier calls a contact in California and reads off all of the credit card numbers she has managed to gather on her shift. The contact in California then sends the information to a mafia group in Malaysia. The mafia then sells the information to another mob group in Taiwan who creates authentic duplicate credit cards; this is all done within 24 hours of the credit card information being stolen.

The group then sends a man with a cellophane pack of cigarettes, only the pack does not hold cigarettes it hold 25 replicated plastic credit cards. This man then travels to Sicily to sell the replicated credit cards to another group. The group from Sicily travels to London and buys merchandise from a very ritzy department store with the credit cards that were replicated. Once the items are purchased, they are taken in a truck by yet another organized crime unit and driven to Red Square in Moscow and sold at cut-rate prices. Now the fraud cannot be tracked and the cash is untraceable. This complete scenario was an actual event that happened in the past and probably still occurs today. This process took a total of 72 hours from the time the credit card number was stolen to the time the goods were sold in Red Square. The point of this story is to convey the level of organization that crime rings have which victims of identity theft are up against and why it is important to take measures to prevent you from becoming a statistic.

Preventing Identity Theft

Below are precautions you should take to prevent yourself from falling victim to identity theft.

1. Do not include your Social Security number, driver’s license number or other unnecessary information on checks. Rather, include your home phone number in the event a cashier is suspicious of a check so they can call you and verify its legitimacy
2. Order a copy of your credit report from each of the three credit bureaus at least once a year
3. Subscribe to a service from a trusted company that provides check monitoring/check order screening
4. Ask your financial institution if it participates in a program that combats document check fraud
5. Shred all documents that could be used to replicate your identity. Including those credit card applications you throw away without even opening.
6. .Don’t leave sensitive mail in your mailbox.
7. Remove credit card numbers from receipts submitted for rebate offers.
8. Do not carry your Social Security card or birth certificate.
9. Examine statements for unauthorized charges.
10. Pay attention to billing cycles for missing bills.

The following numbers may be useful for obtaining your credit report or reporting fraud. If you report a case of identity theft to one of the credit reporting agencies below, the other two will be notified automatically.

Experian www.experian.com Order a credit report: 1-800-685-1111 Report fraud: 1-800-525-6285

Equifax www.equifax.com Order a credit report: 1-800-685-1111 Report fraud: 1-800-525-6285

TransUnion Federal www.transunion.com Order a credit report: 1-800-916-8800 Report fraud: 1-800-680-7289

Federal Trade Commission - 1-877-438-4338