AntiOnline Spotlight: ID Thieves Rake in a Half Billion Dollars

By Enterprise IT Planet Staff
February 3, 2005

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Fraud is as old as commerce itself and news of people getting bilked hardly comes as a surprise. But news that ID theft cost victims in excess of a half billion dollars? That causes a few eyebrows to arch up.

Good, your paper statements are confetti. Now, train yourself (and others) to be suspicious of links in e-mails that kinda, sorta, maybe came from your bank.

The Federal Trade Commission reported this week that identity theft and customer fraud was up 15 percent in 2004, netting scammers over $100 million more than in 2003. All told, according to registered complaints, ID theft cost customers $548 million last year (who knows what the true number is). Shockingly, part of that figure includes some $1 million-plus hauls.

Granted, most theft occurred using traditional methods such as dumpster diving, snail mail interception or the occasional crooked worker that photocopies a loan or employment application. But the Internet is also proving an irresistible lure for fraudsters that don't like to get their hands dirty and have an aversion towards getting caught.

Like spyware, and e-mail worms before that, the general public is finally starting to get wise to the threat of phishing and other online schemes. Protecting yourself, online and off, takes a multifaceted approach that may involve some technology, but mainly relies on some common sense.

For instance, while shredding credit card statements may thwart the neighborhood trash picker, blindly clicking links embedded in a seemingly official bank email can expose your accounts in faster and potentially devastating ways.

In this week's spotlight thread, AO members discuss the state of online security, the dangers to users and businesses and whether the Internet will help push that figure up past $600 million for '05.

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Note: The opinions expressed below are solely those of the individual posters on the AntiOnline forums.

This Week's Spotlight Thread:
FTC: $548 million in 2004 identity thefts

zencoder points the crew to a sobering story. The headline says it all:

FTC: At least $548 million lost to identity theft

Serves victims right for being so lax! MsMittens begs to differ...

How so? They are misled to believe something when it's not true (e.g., they are selling something on eBay, someone wins the auction, sends a cashier's check for the full amount, they send the product and then the cashier's check bounces).

What this is causing however is a complete breakdown in trust on the Internet. At some point, a new mechanism may need to be put in place to deal with this but right now, from my point of view, I don't foresee this appearing in the near future.

It is really easy to convince people that you are someone else (e.g., financial institution, etc) online and get them to give you their information.

No need to cloak online scammers with an aura of "cyber" sophistication. Und3ertak3r calls them what they are: con artists.

The Confidence trickster (a.k.a. con artist, etc.) uses many tools to ply his (or her) trade. These tools can be material (as in electronic) including the telephone and Internet, or human, including themselves and the victim's friends and acquaintances.

Why are people falling for it? Could greed play a part? Newbie member Capnjs has a story to tell...

Several years ago, someone falsely used my auction identity to post several high priced items for sale on an auction site. I didn't realize it had happened until I received a call in the middle of the night (2 am) from someone wondering where his $5,000 LCD projector was. Of course I had no idea what he was talking about (especially at 2 am). Finally he said "I bought an LCD projector from you on an auction site and you asked me to send the check proceeds to your family in Romania and I haven't received the projector yet."

Even at 2 am I caught on and told him that he had probably been taken in because I had never owned such a projector and didn't know anyone in Romania. The line went dead for a moment while he took that all in. I finally convinced him that he had been defrauded and that he and I should contact the auction site about the situation. When I checked next day there were several more pieces of equipment posted by the same person and several already sold.

Unfortunately, too many people get so excited about purchasing something cheap or getting something for nothing that they don't think before they act. The person who called me thought he had bought a $5,000 projector for $2,500.

Obviously, you can be defrauded without your knowledge but the con artists provide plenty of opportunity for people to contribute to the deception.

Discuss the current state of phishing and online fraud here.

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