Some interesting identity theft articles came out this week from various newspapers across the country. Here are some quick highlights of these articles.
The Wall Street Journal has reported that 5 of 9 retailers involved in the nations largest identity theft ring bust, in which computer hackers swiped more than 40 million credit card numbers, did not inform their consumers of the data breach. Currently 40 states have passed laws requiring that consumers affected by a data breach be notified. There were differing reasons for not reporting, ranging from we could not find the breach to we had no idea which customers were effected. Irregardless, the FBI was able to find out about the breach and if you don’t know what customers were affected then you should inform all of them that their information may have been compromised.
Identity Theft Labs has known for some time that companies are reluctant to report data breaches due to bad press and possible stock devaluation but when you look at the amount of money TJ Maxx paid to settle lawsuits brought forth by banks and consumers, $202 million, one has to wonder if silence is in the stock holders best interest. Perhaps if our laws had more teeth and penalized non-reporting institutions, then the penalty coupled with the threat of a lawsuit would give corporations the additional incentive or reason to report a breach.
The Los Angeles Times reported this week that identity theft is growing rapidly in California, citing a report that states that identity theft complaints to local authorities increased by 31%, and that gangs including the Crips, Mexican Mafia and Armenian Power gang are partially responsible for this increase. Referring to court documents they site examples of the involvement of these gangs in identity theft schemes. An identity theft ring with ties to the Long Beach Insane Crips used check cashing schemes to steal $238,000 and a subsequent bust in 2006 turned up computers, paperwork for taking on false identities and, of course, guns. A group of 5, affiliated with Armenian Power, used fake keypads at ATM’s to capture account information and passwords and then proceeded to wipe the bank accounts of over 120 honest Americans clean. The Mexican Mafia was also tied to the theft of 5,000 Social Security numbers. Fortunately, these gangs haven’t become too sophisticated, yet.
The San Francisco Chronicle had a short article on home equity loans and how they are a potential gold mine for identity thieves. Referring to a report from the Identity Theft Assistance Center, a nonprofit industry group that says identity thieves are targeting people with good credit as they have large amounts of unused equity in their homes, the S.F. Chronicle advised readers to check their credit report often and to consider purchasing identity theft protection. The article also pointed out that the FBI’s annual mortgage fraud report cited home equity credit fraud as an “emerging scheme” and that home equity credit lines are easy to open if you have the right (stolen) information.
Unfortunately, as this sample indicates, the identity theft crisis Americans are experiencing is not going to end anytime soon. More criminals, gangs, and identity theft rings seem to choose identity theft as an option every week even though punishments have increased. Is it is just too financially rewarding for them to pass up? Add the fact that companies are often too scared or embarrassed to report breaches, the ability to steal from Americans from far away countries and our poorly regulated credit industry and what you get is a recipe for disaster. Indifference is not the answer. Educate yourself and others and start protecting your identity today before you too contribute to some criminals well being.