Crooks Seem to Have the Upper Hand in Identity Theft Crimes

Here's an interesting article about identity theft from the Knight Ridder Washington Bureau:

Federal agents are in a familiar position as they probe the computer-security breach at an Arizona firm that left credit-card data for some 40 million people open to theft: Once again, they're playing catch-up.

Faced with the vastness of cyberspace, the technical prowess of the thieves and the runaway pace of technology, finding the culprits is no simple matter.

"Unfortunately, the nature of cyber crime, and identity theft, is such that law enforcement will probably always be involved in a game of catch-up," said Paul Luehr, Minneapolis-based vice president for Stroz Friedberg, LLC, a national computer forensics and consulting firm.

The decline of face-to-face cash transactions and the growth of Internet commerce have made credit-related data thefts a regular occurrence and a high priority for federal law enforcement.

In the Arizona case, little is known about whether criminals are using the information that computer hackers stole from CardSystems Solutions, a credit card-payment processing company. But unconfirmed reports from Japan say that at least $1 million in fraudulent credit card-charges have been linked to the security breach. Officials at CardSystems declined to comment.

The break-in is the latest in a string of similar lapses that have left personal information for 58 million Americans - such as Social Security numbers, credit card numbers and addresses - vulnerable to theft.

Identity theft, in which such stolen information is used to obtain credit and make purchases in the victims' names, is the nation's fastest-growing crime. Losses from identity theft total $5 billion for consumers and $48 billion for financial institutions, according to a recent Federal Trade Commission study.

In response, the FBI, Department of Justice and Secret Service have beefed up their computer crime-investigation units. But experts say federal investigators have a tough row to hoe.

Computer crimes often are difficult to solve. Doing so can take years, and cyberspace provides criminals with anonymity and many ways to cover their footprints.

The technology changes so quickly that by the time criminal activity has been discovered the suspects may have moved on to different crimes and methods. Computer forensic evidence can disappear in days, leaving investigators with a cold trail.

And because the crimes are often carried out by organized gangs in Russia, Central Europe and Africa, the geographical, jurisdictional, language and legal barriers are sometimes insurmountable for U.S. law enforcement.

Read the entire article

Equifax Credit Chief Slams Free Credit Reports

Equifax's chief executive says he opposes federal legislation that lets consumers obtain a free copy of their credit report to help them monitor financial accounts for fraudulent activity.

CEO Thomas Chapman called the legislation unconstitutional and un-American because it cuts into profits that Equifax and two rival credit reporting agencies -- Experian and TransUnion -- earn from selling credit reports and monitoring services. Equifax maintains credit data on 220 million Americans. The company earned $1.27 billion in revenue last year.

"Our company felt, and still does ... that it's unconstitutional to cause a public company who has a fiduciary responsibility to return profit to shareholders to give away the product," Chapman said to reporters following a speech at the Commonwealth Club of California in San Francisco on Monday. "Most of my shareholder group did not think that giving away our product was the American way."

Chapman was referring to the Fair and Accurate Credit Transactions Act, which since last December has required credit agencies to provide consumers with a free copy of their credit report every 12 months to check for inaccuracies and fraudulent activity. Chapman said that viewing a credit report once a year wouldn't protect consumers against fraud.

"That's like turning on the smoke alarm once a year," he said.

Chapman has chaired Equifax since 1999 and plans to retire at the end of the year. He initiated his appearance before the public affairs group after a recent spate of data security breaches made headlines and exposed the personal information of millions of consumers to identity thieves. The data industry is facing increased legislation as a result.

Read the rest of the article on Wired.com

Lawmakers target cyber identity theft (phillyBurbs.com)

Lawmakers target cyber identity theft (phillyBurbs.com): "Lawmakers target cyber identity theft
By ALISON HAWKES
The Intelligencer

HARRISBURG - Saying they want to protect consumers from some of the most antagonizing aspects of cyber space, Pennsylvania senators moved forward on a package of bills to tighten up the widespread use of Social Security numbers and make it a crime to retrieve personal information about a user over the Internet without consent.

Proposed legislation, which moved out of the Senate Communication and High Technology Committee on Monday, attempts to tackle the growing problem of identity theft in light of a number of high-profile security breaches this year. As many as 9.6 million people nationwide in the last six months may have had their personal information stolen from data collected by major companies because of hackers and stolen or missing laptops, according to the Privacy Rights Clearinghouse, a San-Diego based consumer advocacy group.

With major breaches affecting Pennsylvania consumers, lawmakers are proposing to go the way a few other states have done and require any company affected by a security breach that includes personal information to notify their consumers.

Additionally, lawmakers are seeking to criminalize one of the tools identity thieves habitually use to gather financial and personal information over the Internet. Spyware - a computer program that is covertly installed over the Internet to track keystrokes and watch e-mail, passwords and other activities of users - would be illegal if installed without a user's authorization and punishable by up to 10 years in prison or a $3 million fine. Users could also sue in civil court, even if the company is located out of state.

Another bill would regulate the use of Social Security numbers by making it illegal to use them on cards required for access to products and services, any public posting of the numbers by companies or public agencies, and printing numbers on materials sent by mail, unless the law requires it. The punishment for doing so would be a fine of no more than $500."

MSN Money - Free credit reports spread to the South

Here's a great article from MSN that explains a little bit more about the Fair and Accurate Credit Transactions Act, beyond just getting your free annual reports.MSN Money - Free credit reports spread to the South

Millions have already taken advantage of easy access to their reports. Be sure to use the official site, though, because criminals and unscrupulous companies are preying on the unwary.

If you're in the South, June 1 is your lucky day -- that's when you can join residents of the West and Midwest in getting easy, free access to your credit report.

Millions of Americans have already requested this critical synopsis of their financial history, which formerly cost as much as $9 a peek. But beware: This much activity attracts the attention of the Internet's thugs as well. Fake Web sites and spam have mushroomed, trying to trick the unwary into paying for something they can get for free.

The Fair and Accurate Credit Transactions Act, signed into law in December 2003, gives every American the right to a free credit report every year from each of the three major credit bureaus. Southern states (Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee and Texas) are eligible June 1. Residents of Western states have had access since Dec. 1, 2004, and Midwestern states joined the list March 1. Eastern states complete the rollout on Sept. 1.

A credit report has information about where you live, how you pay your bills and even whether you've been sued, arrested or filed for bankruptcy. This information is sold to insurers, creditors, employers and other businesses. With it, they evaluate your applications for credit, insurance, a job or renting a home. Find a loan that's
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Credit reports are also used by the credit bureaus to create your credit score, the three-digit number lenders typically use to gauge your creditworthiness. While reports are free, you still need to pay one of the three bureaus to see your current score.

Steve Casteel, of Madison, Miss., recently applied for a loan with his wife, Cindy, to build a house. The bank charged the couple $60 for a credit report -- whereupon the Casteels rudely discovered that one credit report mistakenly listed an old medical bill as unpaid. It wasn't a deal-breaker on eventually getting the loan -- the snafu was "an insurance issue rather than a delinquent payment," says Casteel, a minister -- but the whole experience pointed out to him how useful a periodic look at his report would be.

"We're certainly going to take advantage of that," Casteel says.


But wait, there's more

There's a lot more to the Fair and Accurate Credit Transactions Act than free credit reports. Here's a quick summary:

Uniform standards on what goes into a credit report have been made permanent.


Credit-card and debit-card numbers must be hidden on store sales receipts, listing only the last five digits. Merchants have until Dec. 4, 2006, to phase out any existing registers or terminals that print full account numbers on receipts.


A bank must tell you if it reports any negative information about you to the credit bureaus. A bank will also have to tell you if it grants you credit at less favorable terms than those received by most other consumers.


Any debt collector who learns that information on a consumer's report is fraudulent must inform the creditor.


Identity-theft victims who file police reports will be able to block fraudulent information from appearing on their credit reports.


Once a credit bureau receives a fraud alert from a consumer, it must take steps to ensure that the consumer and not the thief will be granted credit in the future. This extra step could be something as simple as calling the phone number listed in a consumer fraud alert whenever a new application for credit pops up.


Americans in the armed forces will be able to place special alerts in their credit files while they are serving overseas to help minimize their chances of becoming victims of identity theft.

Free Credit Reports for Florida Residents

From an article in the Herald Tribune

Starting today, Floridians can obtain free copies of one of their most important financial documents -- credit reports. Last year, the phasing-in of the program started in the western states, and now it's time for residents in the South to get theirs.

The no-cost reports are required by a 2003 federal law. Individual reports from the three nationwide consumer reporting companies -- Equifax, Experian and TransUnion -- typically cost about $10 each.

The Fair and Accurate Credit Transactions Act now requires each of those bureaus to provide everyone with a free copy every 12 months. But consumers must ask for it; it won't be sent automatically.

The Federal Trade Commission recommends that consumers review their credit reports from all three bureaus since each uses different databases to compile information. The three reports can be ordered all at once, or consumers can stagger them over the course of a year.

Credit reports chronicle a person's debt and payment history, detailing mortgages, car loans, credit cards and payment records. They also list any past-due accounts, bankruptcies, foreclosures or actions by collection agencies.

The bureaus collect this information and sell it to lenders and other businesses that have permission to obtain it. The free reports lack one piece of data available in the paid versions: They don't contain a person's credit score -- a number reflecting creditworthiness based on the report -- which lenders often use as a benchmark. Those can be purchased separately from each bureau for about $6 to $8.