Bet You Don’t Know Who I Really Am


Never underestimate the ability of a human to assume fellow humans’ identity
under false pretenses.


New research from Gartner shows that some 15 million Americans fell prey to
some form of identity-theft fraud over a one-year period ending in mid-2006.
That’s more than a 50 percent increase from the 9.9 million victims who were
duped in 2003.


As if that isn’t bad enough, Web users are also being bilked for more than
twice the amount than they were a few years ago.


An August 2006 Gartner survey of 5,000 online adults in the U.S. indicated
an average loss was $3,257 in 2006, up from $1,408 in 2005. Also, the
percentage of funds consumers managed to recover dropped from 87 percent in
2005 to 61 percent last year.


The average loss on new account fraud more than doubled from $2,678 in 2005
to $5,962 in 2006. Unauthorized charges to credit cards rose from an average
of $734 in 2005 to $2,550 in 2006.


Are fraudsters getting more clever? Why yes, they are.


Gartner analyst Avivah Litan said in a report that hackers are employing
more devious scams by lurking around the Web, exploiting Internet auctions
such as eBay, tinkering with money transmittal systems such as PayPal and
impersonating online lottery and sweepstakes contests.


Litan also said fraudsters are exploiting the 5 or more million
businesses that accept electronic payments from consumers, and the consumers
themselves.


These crooks are targeting “low-hanging fruit,” such as electronic card and
checking account numbers, as well as user IDs and passwords for online
financial accounts.


Crooks are also crow-barring their way into databases.


TJ Maxx revealed
that cybercrooks breached its database and used customers’ financial
information to make purchases; the store is still figuring out the damage.


The study comes a month after the RSA security conference in San Francisco, where security product vendors, their customers and concerned Web users convened to lament the proliferation of security exploits and the
ingenious manipulations of identity thieves looking to make a quick buck via
the Internet.


Research like Gartner’s latest ID theft reinforces the need for the RSA show
and others of its ilk: by studying the techniques fraudsters use, users will
be better prepared to shield their identities and finances from prying eyes.


Sadly, Litan said consumers usually have no idea how criminals gain access
to their accounts or identities. But, she added, fraud can be largely
prevented by using identity verification and scoring services.


The analyst suggested businesses that store credit card, debit card and bank
account data should migrate away from that practice. She also suggested
lawmakers should consider enforcing financial protection for consumers who
lose money to online fraud.


Lawmakers discussed the idea of making defendants pay victims for their losses, but no formal
action has been taken.

News Around the Web