Feeds

ID thieves rip off 7m US adults a year

So what are banks doing about it?

  • alert
  • submit to reddit

Protecting against web application threats using SSL

Seven million US adults,were victims of identity theft in the 12 months ending June 2003, according to Gartner. The analyst group is calling on banks to make it tougher for crooks to obtain credit in false names.

Gartner says its figures represent a 79 per cent increase in people affected by ID theft since its last survey in February 2002.

It takes issue with a common misconception about identity theft - that it's a Net crime perpetrated by anonymous, career criminals.

"Identity theft is not necessarily a high-tech crime, and can just as easily damage the credit reputations of low-tech adults who don't spend any time on the Internet," said Avivah Litan, vice president and research director for Gartner.

"More than half of all identity theft - where the method of theft is documented - is committed by criminals that have established relationships with their victims, such as family members, roommates, neighbours, or co-workers," said Litan, citing numbers published by the Federal Trade Commission.

With identity theft, a thief takes over a consumer's entire identity by stealing critical private information, such as the Social Security number, driver's license number, address, credit card number or bank account number. The thief can then use the stolen information to obtain illegal loans or credit lines to buy goods and services under the stolen name. Identity thieves typically change the consumer's mailing address to hide their activities.

"Many banks, credit card issuers, cell phone service providers and other enterprises that extend financial credit to consumers don't recognize most identity theft fraud for what it is," Litan said. "Instead they mistakenly write it off as credit losses, causing a serious disconnection between the magnitude of identity theft that innocent consumers experience and the industry's proper recognition of the crime. This causes a disincentive to fix the problem with the urgency it requires."

Without external pressure from legislators and industry associations, financial service providers (FSPs) may not have the sufficient incentive to stem the flow of identity theft crimes.

According to Gartner, consumers and lobbyists must press banks and other FSPs to wholeheartedly back efforts such as the US Fair Credit Reporting Act and BITS' Work on Identity Theft.

BITS, the Technology Group of The Financial Services Roundtable, was formed by the CEOs of the largest US financial institutions as the strategic "brain trust" for the financial services industry in the e-commerce arena.

The Fair Credit Reporting Act would cover security and accuracy of personal financial information and access to credit and financial services; BITS' initiative would make it easier for victims to report a crime to financial institutions.

"Most importantly, however, banks and FSPs must implement solutions that effectively screen for application fraud, so they don't wrongfully extend credit to identify thieves," said Litan. "Without industry prevention efforts, consumers whose identities have been stolen will continue to bear the brunt of social and indirect economic costs."

Additional information is available in two Gartner reports. These reports examine the rising trend of identity theft and what solutions are emerging in the market to prevent it.
Underreporting of Identity Theft Rewards the Thieves can be purchased on Gartner's Web site here. Identity Theft Fraud Prevention Solutions Start to Proliferate can be purchased on Gartner's Web site here. ®

Related Stories

ID theft: a $1bn a year crime
US arrests 130 in Net fraud crackdown
'Open and helpful community' - of credit card thieves
Smart credit card scheme kicks off in the UK

Reducing the cost and complexity of web vulnerability management

More from The Register

next story
Spies would need SUPER POWERS to tap undersea cables
Why mess with armoured 10kV cables when land-based, and legal, snoop tools are easier?
Early result from Scots indyref vote? NAW, Jimmy - it's a SCAM
Anyone claiming to know before tomorrow is telling porkies
TOR users become FBI's No.1 hacking target after legal power grab
Be afeared, me hearties, these scoundrels be spying our signals
Jihadi terrorists DIDN'T encrypt their comms 'cos of Snowden leaks
Intel bods' analysis concludes 'no significant change' after whistle was blown
Home Depot: 56 million bank cards pwned by malware in our tills
That's about 50 per cent bigger than the Target tills mega-hack
Hackers pop Brazil newspaper to root home routers
Step One: try default passwords. Step Two: Repeat Step One until success
China hacked US Army transport orgs TWENTY TIMES in ONE YEAR
FBI et al knew of nine hacks - but didn't tell TRANSCOM
Microsoft to patch ASP.NET mess even if you don't
We know what's good for you, because we made the mess says Redmond
NORKS ban Wi-Fi and satellite internet at embassies
Crackdown on tardy diplomatic sysadmins providing accidental unfiltered internet access
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.