Home > Identity Theft and Scams > The Next Wave of Identity Theft?

Comments 0 Comments
Advertiser Disclosure


[UPDATE: Some offers mentioned below have expired and/or are no longer available on our site. You can view the current offers from our partners in our credit card marketplace. DISCLOSURE: Cards from our partners are mentioned below.]

Consumers who have been lulled in to a false sense of security over credit card fraud could be in for a rude awaking. That was the message delivered at Visa’s Global Security Summit held in Washington, D.C., on Wednesday.

Disclosure last week of a serious data theft involving some of the nation’s largest data brokers hovered over the conference, and some experts suggested it signals a new wave of sophisticated identity theft. A gang of criminals had long-term access to Social Security Numbers, dates of birth and a treasure trove of other non-financial information stored by Lexis Nexis and about a dozen other data brokers, security expert Brian Krebs reported last week. The data was often used to defeat so-called Knowledge Based Authentication, in which banks and other institutions ask personal questions to verify identities.

Byron Acohido

Byron Acohido at Visa’s Global Security Summit. Credit: Bob Sullivan

The incident shows that criminals trying to steal money from banks are using more sophisticated methods now, said Kurt Baumgartner, a security expert with Kaspersky Labs.

“The new angle is that the attackers are going in through the side door,” he said. “Now, instead of attacking just the payment processors, attackers are focusing on data brokers …The processors are locked down, so attackers are shifting focus to other sources of information.”

Criminals armed with full dossiers of data on victims — or with a resource to get whatever data point they need — have an easier time committing account takeovers.

Combing the Cloud

Byron Acohido, author of Zero Day Threat and a cybercrime reporter at USA Today, said increased dependence on Cloud services has made life easier for criminals.

“What (firms) are doing is storing the information all in one place, putting it on servers and therefore (exposing it),” he said. “Now we learn the bad guys have had their fingers in the pie the whole time.”

Criminals armed with information such as date of birth and past addresses can do much more than make credit purchases in a victim’s name. Most consumers are unprepared to deal with the consequences of such a more severe bout of ID theft, Acohido said.

“The payments industry has done a good job in terms of consumers and (stolen) credit cards and making them whole, and there are regulations to protect them,” Acohido said.

“But people don’t realize what happens if the bad guys take out a loan in your name of get a passport in your name, then you are stuck. There’s very little protection, or regulation, to help. And I think we’re going to see that happen more.”

The development concerns FBI agent Donald Good, who said most consumers are unaware of all the information that data brokers have.

“What all that translates into for most folks is money,” he said. “A lot of times we all forget how much information on us is out there.”

One-Stop Shop

The three spoke on a panel called Cyber Crime: Addressing Global Trafficking of Financial Data, at Visa’s annual global summit on security. The discussion covered a wide range of topics, but it circled back to the data broker heist several times.

In a larger sense, the audience — almost entirely fraud analysts at brand-name banks — expressed concern about placing continued trust in the Cloud. One questioner called the Cloud “a one-stop shop for criminals.”

Baumgartner put it more gently, admitting that the Cloud does “aggregate the information a little better for the attackers.”

There were also concerns expressed about fast adoption of mobile phone payments, with Acohido warning that all threats consumers encountered on their PCs are quickly being re-written by criminals for use attacking smartphones.

But ultimately Good said that consumers and employees tend to be their own worst enemy when they spend time online.

“Still, the most common method of compromise is via email, people clicking on a link in email that they shouldn’t, even with all the education that is out there,” Good said.

Image: Hemera

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team