The Identity Theft Recovery Handbook

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• From Chapter 2

  Identity Theft – A Snapshot of History
  (With a “little bit” of opinion thrown in)

  Identity theft is certainly nothing new, but over the past 20 years it has changed a lot. Historically, the majority of identity theft happened because of the loss of a purse or a wallet and many times would have been limited to the country you live in and sometimes it was even limited to the city or state.  But today things are very different; technology is everywhere and integrated into our lives.  We can do our banking without ever seeing or talking to a bank teller, and many of us today carry little or no cash and prefer to use a credit card when making purchases. I think using credit cards makes buying clean and simple; I can use them just about anywhere from fast food joints, for movies, for grocery shopping, and even to pay my mortgage.  However, this convenience may come at a price. Many businesses don’t understand how to protect your credit card number and other personal information and this makes them easy targets for the bad guys. Business leaders need to look at the world as it is today from a security perspective and that corporate espionage, hackers and organized crime are out to steal as much information (data) as they can because data equals money. I’ve heard on more than one occasion that “security doesn’t drive the business”, but maybe it should… Maybe if the protection of customers’ personal information was number 1 on their list then the profit would come naturally because of consumer trust and loyalty. I bet there are several CEO’s out there who would like to go back in time and try out this theory.
  
  There’s also another, darker side to this problem: in some cases it’s not a lack of understanding that allows for the loss of personal data and it’s not some dark mysterious hacker attacking a helpless victim, nor a shrouded unstoppable super villain trying to conquer the world. It’s that in many cases these businesses (or their leaders) don’t want spend the money to prevent the loss.  They understand the risk and accept it--basically “rolling the dice” on whether they will experience a loss of customer information. Money certainly makes for an interesting motivator; it causes smart people to make dumb choices. One of the most frightening statements I’ve ever heard was that “we don’t eliminate risk, we accept risk as part of doing business.” I think that this statement is the equivalent to covering your eyes, plugging your ears and going LALALALALALALA. What these people are forgetting is the risk they are accepting is yours, it is your personal information and you have to live through what happens because of their decisions. Sometimes all you can do is manage the risk, but simple acceptance is not a blanket solution to be driven by bean counters. Managing risk is a matter of securing the data, monitoring that data, regularly reassessing the controls and increasing security as it becomes possible; that’s risk management as it should be. Simply put, you eliminate as much of the “bad stuff” as you can and manage what you can’t eliminate. This shows that as a company you’ve exercised due diligence to protect your customers, and this is the best anyone can do.

  
  
  
  From Chapter 3

  What can the bad guys do once they have your information?

  A better question might be, what can’t they do? Identity thieves can apply for loans, rent an apartment, apply for a job, change the mailing address on your existing accounts, open new bank accounts and write bad checks on those accounts, and buy a car.  These are just a few of the examples, but the simplest answer is “they’ll make your life miserable”.  Identity thieves usually have one of two possible goals: one is to take over your identity and use your name to apply for loans or credit cards and quickly turn it into profit for themselves. The second is aimed at quietly collecting enough information to BECOME you so that they can get employment and a place to live; in most cases it is illegal aliens that are doing this (usually someone is doing it for them and charging them a fee) and this could go unnoticed for a very long time or at least until the Federal Government questions why the income from the person using your information hasn’t been reported on your income tax. Along this same note, I’ve read where illegals use someone else’s identity in a marriage ceremony and use the marriage license to get immigration papers for this country. There are also a number of reported cases where someone being arrested for a crime used another person’s identity, and when they jump bail or miss a court date the police come looking for you.
  
  Regardless of how it used it’s always best to avoid the theft. On average, recovery time from identity theft is 15-18 months and even after you’ve fixed the problems there can be recurring events that pop up from time to time.
  
  The part of identity theft that happens most frequently is payment fraud, which simply put is where a thief has gotten one of your credit card numbers and uses it to make purchases. As I’ll discuss throughout this book, information loss can happen through a variety of ways. First, a company can lose your personal information, which I call the “Accidental Victim Syndrome” because this loss is completely outside of your control. Information loss can also be caused from a lost wallet or purse or through many other methods used to collect credit card information.
  
  While payment fraud certainly isn’t a pleasant experience it’s much easier to recover from than full blown identity theft.
  
  You might be wondering if it’s worth all the effort that the criminals go to get this information.  The short answer is YES and according to the 2006 annual report issued by the Internet Crime Complaint Center (http://www.ic3.gov) they would agree. The numbers below are not just for identity theft and payment fraud but for all forms of Cyber Crime reported to them.

  Among the highlights are;
  Overall totals: During 2006, consumers filed 207,492 complaints. Complainants said they lost $198.4 million (the highest total ever).

  Types of fraud: Nearly 45 percent of the complaints involved online auction fraud—such as getting a different product than you expected—making it the largest category; more than 19 percent concerned undelivered merchandise or payments. Another pervasive scheme last year involved an e-mail threat of murder . Get more details on all nine fraud categories in Appendix I of their report, including identity theft, investment fraud, cyberstalking, phishing, spoofing, spamming, and others.

  The perpetrators: Three-quarters were men. Nearly 61 percent lived in the U.S., with half in one of seven states. Other top countries included the U.K., Nigeria, Canada, Romania, and Italy.

  Victims: All over the map. But the report shows that the “average” complainant was a man between 30 and 40 living in California, Texas, Florida, or New York. Individuals who reported losing money lost an average of $724; the highest losses involved Nigerian letter fraud (discussed in the phishing section of the book), with a median loss of $5,100. Nearly 74 percent of the complaints said they were contacted through e-mail, and 36 percent complained of fraud through websites, highlighting the anonymous nature of the web.

  As you can see, identity theft and payment fraud can be profitable for the crook, which is why they continue to do it. It can also be tough to recover from if you’ve become a victim. You’ve taken an important step in buying this book.  The best defense against these crooks is KNOWLEDGE and this book will teach you about the techniques used by the bad guys and ways to avoid or recover from a problem if it’s happened to you.