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Identities Sold at Internet Auctions: The Latest ID Theft Scam

Whether you realize it or not, your identity is one of your most valuable assets. But are you aware that thieves are buying complete identities — including names, Social Security numbers, addresses, dates of birth, functioning credit card numbers and more — for as little as two dollars? Underground online auctions for credit card numbers, bank account numbers and other personal information have increased exponentially* in the past two years. This escalation has allowed identity thieves to buy personal information in bulk, putting more and more people at risk of identity theft.

The worst part is that most people don’t even know these types of online auctions exist. By understanding how these auctions work and how people’s personal information is obtained, you can take steps to protect against identity thieves getting credit in your name. What costs a thief two dollars for your identity could cost you thousands of dollars.

According to the FBI and the National White Collar Crime Center, 2007 saw Americans report losses of $239 million as a result of online fraud, with average losses running around $2,530⁺⁺. As identity thieves become savvier, some have recruited hackers to defraud consumers of personal information, such as credit or debit cards, Social Security numbers, etc. The stolen data is usually sold through instant-message groups or online forums that last only hours or days, to avoid being tracked by authorities.

These ever-evolving identity theft techniques mean that your identity could be vulnerable at any time — not just if you’ve had your wallet stolen, as some may think. Be sure to take necessary precautions when shopping or banking online to make sure that sites requiring personal information are legitimate and secure.

From remaining vigilant and safeguarding your credit and debit cards to following other identity protection tips (see this month’s tip section for more suggestions), there are many steps you can take to help prevent your personal information from being sold for mere dollars.

Tip of the Month: Learn How to Help Safeguard Yourself Against Identity Theft

• Be careful about giving out personal information. Don’t disclose your personal information over the phone, Internet, or by mail for any cause that seems suspicious or confusing.
• Protect your mail. Shred or safely store all personal information. Deposit outgoing mail in collection boxes and place your mail on hold with the USPS when you go out of town.
• Guard your credit cards. Minimize the information and number of cards you carry in your wallet, and if you lose a card, contact the card company as soon as possible. Also, watch cashiers when they handle your cards.
• Pay attention to billing cycles. Contact creditors immediately if your bills do not arrive. A missing bill could mean an identity thief has taken over your credit card account and changed your billing address.
• Safeguard personal information in your home. Make sure your personal documents are well-hidden or safely locked away when a worker enters your home. If you’re unable to be there, ask a friend or roommate to keep watch on your behalf.
• Be smart about passwords and PINs. Memorize your passwords and personal identification numbers instead of carrying them with you. Avoid using easily available information like your mother's maiden name, your birthdate, etc.

Interactive Tool: Equifax Fraud Index

This helpful index lets you see how different areas of the country — right down to counties and cities — compare in the national fraud index. You can even narrow your search by income, gender, age and credit score range. Find out how different locations and demographic groups compare when it comes to the frequency of identity theft and fraud.

Equifax and BBB Identity Theft Alerts: Top Five Ways to Prevent ID Theft Online⁺

The good news is that ID theft is on the decline. The bad news is that ID theft still affected 8.1 million Americans last year, according to Javelin Strategy and Research – down 3.6 percent from 8.4 million in the previous year’s study. The average amount lost per individual as a result of ID theft last year was about $5,500, for a total of $45 billion. Despite the decline in reported ID theft, Better Business Bureau (BBB) warns that thieves and hackers still lurk online and is offering advice consumers can use to protect their personal and financial information.

“ID theft prevention should always be on an individual’s mind when they are online,” said Steve Cox, BBB spokesperson. “When it comes to protecting your identity, an ounce of prevention is worth far more than the amount of money, energy, and agony that goes into getting your life back to normal after your financial and personal information has been stolen.”

BBB recommends consumers take the following fives steps to prevent ID theft whenever they are online:

1. Don’t fall for a phishing e-mail.
   Phishing—using e-mail or phone calls to pose as a trustworthy organization in order to coerce sensitive information from victims—is on the rise. According to a survey for Gartner, Inc., 3.6 million U.S. adults lost money in phishing attacks in the 12 months ending in August 2007, as compared with the 2.3 million who did so the year before. The amount of money lost totaled $3.2 billion.
   
   Phishing e-mails can look legitimate with graphics and official logos of banks, government agencies, or credit card companies. The e-mails usually include hyperlinks that direct the victim to a Web site designed to install viruses and malware or solicit bank account or Social Security numbers.
   
   In order to prevent ID theft through phishing e-mails, computer users should completely delete unsolicited e-mails from banks, credit unions, investment firms and government agencies with which they do not already have an established relationship. If the recipient does have an existing relationship with the supposed originator of the e-mail, BBB recommends calling the organization to confirm whether or not the e-mail is legitimate before taking any further action. The IRS and other government agencies do not use e-mail to contact consumers about any issues or problems that require action on the part of the recipient, so e-mails purporting to be from government agencies should be deleted immediately.
   
   
2. Create strong passwords and protect them.
   Developing a habit of regularly changing passwords makes it much more difficult for ID thieves to steal personal information. Some passwords, however, are stronger than others. Attributes of a secure password include a combination of numbers, capitalized letters and even symbols. Consumers should never use sensitive information for a password such as their Social Security number, mother’s maiden name or birthday.
   
   
3. Be safe and secure when on the go.
   Computer users on the go should be wary of entering passwords or sensitive information into a computer that isn’t theirs, such as at an Internet café, library, computer lab or airport kiosk. Hackers can actually record their target’s keystrokes to learn passwords and other information.
   
   Wi-Fi networks, either on the road or in the consumer’s own house, present even more opportunities for ID thieves. The easiest way to protect a Wi-Fi network at home is to not broadcast the Service Set Identifier (more information on this topic is available at www.us.bbb.org). A safe rule of thumb is to avoid exchanging sensitive information through the Internet when using a public Wi-Fi connection and to simply wait until a trusted network can be used.
   
   
4. Guard personal computers with anti-virus, anti-spyware, and firewall protection.
   Opinions vary, but the amount of time it takes for an unprotected personal computer to become infected with a virus or malware can range from four to thirty-four minutes. That’s why a computer must have good anti-virus software, as well as anti-spyware and firewall protection. Consumers can purchase protective software, but there are also a number of reputable, free programs available for download online. BBB advises consumers to do their research into a company beforehand to make sure it provides legitimate, reliable software. Also, many operating systems already provide firewall protection so users should always make sure this protection is enabled.
   
   After acquiring security software, users must keep the programs updated. Operating systems also require patches and other additional updates that computer users need to install in order to maintain security.
   
   
5. Only transfer information over a secure server.
   When it comes to giving out personal information online, consumers should only do so on a secure server. On a secure server, the information is encrypted as it is being transmitted; that way, others can't read it if they should intercept it.

BBB advises consumers to make sure they are on a secure server by checking the URL of the page when asked to give any personal information. An unsecured URL will look like this: http://www.###.com. A secure server will have an "s" either in front of or following the "http", and it will look like this: https://www.###.com or shttp://www.###.com.

For more trustworthy information on preventing ID theft, as well as BBB advice on what to do if your identity is stolen, go to www.us.bbb.org.

+ © 2008 by the Council of Better Business Bureaus, Inc. Arlington, VA
Used by permission. The name Better Business Bureau is a registered service mark of the Council of Better Business Bureaus, Inc.