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Identity Theft in the Information Age: Protecting Your Most Valued Asset

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Identity Theft in the Information Age: Protecting Your Most Valued Asset Identity Theft in the Information Age: Protecting your Most Valued Asset White Paper Provided by HUB International September 2010 The call came in the middle of the night to Ted and Karen’s home. “Is Karen okay?” It was a good friend who had been on Facebook and saw Karen’s plea for money - she was in London, her wallet had been stolen, and she was using Facebook to connect with friends who could wire her money to get home to the United States. But, Karen was right beside Ted in their house in Connecticut. She was not in London, and her wallet was in her purse. Karen’s friend had almost become a victim of a modern cyber crime. Identity Theft in the Information Age: Protecting your Most Valued Asset Despite increased vigilance by consumers and and investigations fi rm that counsels the high net-worth businesses, identity theft continues to affect the lives of community. “They no longer break into your house. They millions of Americans. break into your life.” According to Viollis, cyber criminals are increasingly targeting high net worth consumers This lucrative and increasingly sophisticated crime and their advisors because they represent a “one stop grew by 12% in 2009 impacting 11 million Americans, shop.”3 according to Javelin Strategy & Research, a fi rm that has tracked the problem since 2003.1 Identity theft is defi ned by the Federal Trade Commission as “fraud that is committed or attempted, using a person’s identifying According to Information Week, “Hacking information without authority.” 2 isn’t a kid’s game anymore. It’s big Victims of identity theft may fi nd themselves unable to business. Online black markets are fl ush secure a mortgage, pass a pre-employment screening, with stolen credit card data, driver’s license or access their own health insurance benefi ts as a result numbers, and malware, the programs that of the criminal activity done by others in their name. It can take months –-and in some extreme cases--years let hackers exploit the security weaknesses to repair credit history. of commercial software. Cyber criminals Protecting your identity is an ever-present reality in the have become an organized bunch; they use information age. From the courtesy checks you receive peer-to-peer payment systems just like they from your credit card company to Gmail, Twitter, and are buying and selling on eBay, and they’re Facebook, there is an abundance of fertile ground for not afraid to work together.”4 crime. The good news is that there are many practical tips and safeguards everyone can implement to help preserve their identity and property. Cyber Threats First, it’s important to understand the changing A fi rst step in protecting yourself is to be aware of landscape of this type of crime. While identity theft is the potential for crime. With the increase of online rooted in low-tech activities such as theft of wallets or activity, the popularity of social networking, and our “dumpster-diving” for discarded fi nancial statements, the increasing comfort level with the Internet, criminals information age has offered a multitude of opportunities see opportunity and dollars signs. Gunter Ollmann, to gain access to personal information. chief security strategist for IBM Security Systems, was Today’s cyber criminals are sophisticated and searching quoted in a Georgia Tech Information Security Center for bigger payoffs. Cyber crime encompasses credit Summit (GTISC) report about the evolving cyber crime card fraud, hacking, “shoulder-surfi ng,” fake Caller ID, economy, saying it is “an international conglomerate of “phishing,” and “spearing.” Vigilance in understanding professionally-trained authors motivated by high profi t.” the changing landscape and risks, while also evaluating GTISC publishes forward-looking information on cyber and re-evaluating your vulnerability, is critical to avoiding security threats. Following are their top fi ve emerging cyber-crime. cyber security threats:5 “The 21st century intruder is well-prepared and well Malware—software designed to infi ltrate or damage equipped,” says Paul Viollis, CEO of Risk Control a computer system without the owner’s informed Strategies (RCS), a New York City-based consulting consent 3 Botnets—groups of computers infected with malicious Fake Caller ID: Scammers use Internet-based phone code and controlled by an outside master. GTISC service to fake the Caller IDs of banks and fi nancial estimates that botnet-affected machines could advisors. Because the phone ID bears the name comprise as much as 15 percent of online computers. of their bank or a trusted advisor, victims are tricked into providing personal information. Incoming Cyber warfare—the use of computers and the Internet calls, however, should always be suspect. Banks to attack the U.S. economy and infrastructure and related institutions rarely call to “verify account 7 Threats to VoIP (voice communications over the information.” Internet) and mobile devices – as “smart phones” achieve functionality similar to PCs and market share becomes concentrated on fewer platforms, experts “Your identity is a predict widespread virus attacks. core asset.” The evolving cyber crime economy – more organized ~ Matthew Cullina, president, and profi t-driven than ever before. Identity Theft 911 Cyber Criminal Industry Social Networking: Social networks such as An entire industry of online “thieves” has been created. Facebook, MySpace, and Twitter represent the According to Ollmann, there are three main categories: newest platforms for emerging threats and make Low-level criminals who use kits (which can be it easier for both stalkers and scammers to learn bought, leased, subscribed, and pay-as-you-go) to about and track their intended victims. Cyber criminals create the specifi c malware required for their targeted take advantage of networks of “friends” to get users crimes; to click on links they might otherwise ignore. Phishers have hijacked user accounts in order to send the Skilled developer and collectives of technical user’s friends instant messages pleading for experts creating new components to embed within emergency assistance – and money. Facebook their commercial malware creation kits; warned its users in early 2009 about the rise in Top-tier managed service providers that warp new phishing and spam attacks.8 Unfortunately, many services around malware kits to increase propagation users of social networks fail to utilize the privacy and enable organized fraud on a global scale, feeding controls available to them on these sites which would gains back into existing money-laundering chains.6 help reduce their exposure. Chubb’s Peter Spicer says “Twitter is a gift to stalkers Understanding your Risks if their intended victim is too open about who follows In the information age, it is imperative to stay informed them and what they are willing to ‘tweet’ about.” about the types of cyber crime that you could fall victim to. There are a number of techniques that criminals For more information about social media risks and how employ to gain valuable information about individuals, to protect your online privacy, read HUB International’s which they then use to obtain passwords, Social white paper: “Privacy Matters: Social Media, Risk and Security numbers, and other vital information. Following Reward.” are three categories of risk everyone should be aware of: “Spear Phishing” or “Whaling”: These techniques Five Types of Identity Theft target affl uent individuals and involve sending emails While not new, identity theft is evolving. Five of the most to money managers, fi nancial advisors, and family common types of identity theft are: offi ces. Often personally addressed, these emails 1. Department of Motor Vehicles—Use of a victim’s include links that install malicious software. identity to obtain a driver’s license. Victims discover unpaid traffi c tickets and DUI’s under their name. 4 2. Social Security—Use of a victim’s Social Security The 21st century intruder is well prepared and well number for employment purposes. These thieves equipped…to break into your life according to Paul also fi le taxes under a victim’s name in order to Viollis, CEO of Risk Control Strategies, a security fi rm obtain a refund. in New York City. 3. Criminal Identity—Use of a victim’s information to escape fi nes or jail. Victims discover they have But as movement toward electronic medical records acquired a criminal record for bad checks, gains momentum, privacy experts predict that medical shoplifting, pornography, and prostitution among identity theft could grow. Consumers may not even other crimes. know their records have been compromised. In January, a new law took effect in California that requires providers 4. Financial Identity— Use of a victim’s information to let consumers know if their medical information has to obtain vehicles, real estate, and other goods or been “breached.” But few states detail notifi cation services. requirements regarding unauthorized release of patient 5. Medical Identity—Use of a victim’s name, Social medical data. Security number, or insurance coverage to obtain Medical identity theft is exacerbated by strict privacy prescriptions or medical services which reduces the laws. The Health Insurance Portability and Accountability victim’s available benefi ts, damages credit, and Act (HIPAA), enacted by Congress in 1996, set rules and makes it harder for victims to obtain an accurate limits on who can examine personal health information, copy of their medical records as they may be which makes it diffi cult to correct. intermingled with those of the thief. Cullina says there are two non-credit risks that are often Medical identity theft represents a growth area for overlooked: estate identity theft, in which the personal criminals. More than 250,000 Americans fall victim to information of a recently-deceased individual is used, medical identity theft every year, according to a 2007 and employment fraud, in which an individual uses report, the most recent source of federal data on another’s personal information to obtain employment.
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