Identity Theft As A Cyber Threat

Cyveillance, a provider of online risk monitoring and management solutions, today announced its latest report Online Financial Fraud and Identity Theft which highlights the growth of Internet attacks and identifies the industries most at risk.

Using intelligence collected through its Internet monitoring technology, their security experts have identified that the two leading online identity theft risks, phishing and malware, increased significantly in the first two months of 2007 with the number being phished growing by 50 percent and malware attacks growing by 200 percent. As part of its research, the company has also specifically identified more than 1 million suspected stolen social security numbers on the Internet, in just the last two months.

The largest increases in Phishing attacks have targeted organizations in the following industries:
· Credit Unions – 584 percent increase
· Associations – 329 percent increase
· Banks – 325 percent increase
· Insurance – 300 percent increase
· Payment Services – 285 percent increase

In computing, phishing is a criminal activity attempting to fraudulently acquire sensitive information, such as usernames, passwords and credit card, by masquerading as a trustworthy entity in an electronic communication. Ebay and Paypal are two of the most targeted companies, and online banks are also common targets. Phishing is typically carried out using email or an instant message and often directs users to a bogus website.

Malware is software specifically designed to infiltrate or damage a computer system without the owner's informed consent. The expression is a general term used by computer professionals to mean a variety of forms of hostile, intrusive, or annoying software or program code.
Many normal computer users are however still unfamiliar with the term, and most never use it. Instead, virus is used in common parlance and often in the general media to describe all kinds of malware.

According to the Federal Trade Commission website, there were more than 686,000 complaints filed with the agency in 2006. The complaints, filed online or at a toll-free number, are shared via a secure database with more than 1,400 federal, state, and local law enforcement agencies, and law enforcement and consumer protection agencies. “With a call or a click, consumers can file complaints with law enforcers across the country and around the world,” said Deborah Platt Majoras, Chairman of the FTC. “These reports provide ammunition that helps law enforcers fight fraud and identity theft.”Identity theft complaints represented 37 percent of the 686,683 complaints filed.

Other findings from the report include:
· Internet-related complaints accounted for 46 percent of all fraud complaints.
· The percent of Internet-related fraud complaints with “wire transfer” as the reported payment method more than tripled between 2003 and 2005.
· The major metropolitan areas with the highest per capita rates of consumer fraud reported were Washington, DC; Tampa/St. Petersburg/Clearwater, FL; and Seattle, WA.
· Credit card fraud was the most common form of reported identity theft, followed by phone or utilities fraud, bank fraud, and employment fraud.
· The most frequently reported type of identity theft bank fraud was electronic funds transfers.
· The major metropolitan areas with the highest per capita rates of reported identity theft were Phoenix/Mesa/Scottsdale, AZ; Las Vegas/Paradise, NV; and Riverside/San Bernardino/Ontario, CA.

The President’s Identity Theft Task Force has adopted recommendations on measures that can be implemented immediately to help address the problem of identity theft, Attorney General Alberto R. Gonzales and Federal Trade Commission Chairman Deborah Platt Majoras announced.

The Identity Theft Task Force, which was established by Executive Order of the President on May 10, 2006, and is now comprised of 17 federal agencies and departments.
“As with any crime, victims of identity theft suffer feelings of violation and stress, but in these cases, victims have the added burden of cleaning up the mess that the identity thieves leave behind,” said Attorney General Gonzales.

“Conquering identity theft demands that we work as a team to develop tools that strengthen law enforcement, practices that enhance data security, and programs that help consumers in prevention and recovery,” said FTC Chairman Majoras. “Through these initiatives, we are taking solid steps toward eradicating this persistent consumer problem.”

While no one can totally prevent this crime from occurring, here are some positive steps to decrease your risk of identity theft:
Do not carry all of your credit cards, Social Security card, passport, and birth certificate. Carry them only when needed.

Reduce the number of credit cards you carry to a minimum.

Memorize your Social Security Number, passwords and PIN numbers—do not use your date of birth, home telephone number or last four numbers of your Social Security number.

Report all lost or stolen cards immediately to the credit card company, the three credit bureaus and your local police department.

Review your credit reports annually from the three credit reporting agencies. www.equifax.com, www.experian.com, www.transunion.com You are also entitled to free copies of your credit report once every year. For more information, go to www.annualcreditreport.com

The Plague Of The 21st Century

A recent study done by the credit bureau, Experian, shows U.S. consumers are relying on their credit cards more than ever. According to their latest National Score Index, compiled from a random sampling of 3 million consumers in the credit bureau's database, 51 percent of the U.S. population has at least two credit cards and 14 percent have 10 or more cards.

The results "tend to suggest, on average, people in the last couple of years are accumulating more debt and are utilizing credit cards more than in the past," said Pete Bolin, manager of analytics for Experian. The study also shows that consumers are using their credit cards as an "overall financial vehicle" rather than just an emergency tool, he said.

Dave Capra “The Debtonator” says the Experian study seems pretty accurate. "The people that I interview average eight cards," Capra said. “People seem to be using their available credit to help with their everyday cost of living and are even using one card to pay down others. Credit card debt is quickly becoming a modern day epidemic, threatening our society.”
The study also shows that people aren't saving, Capra said. “Saving is what you have to do so you don't turn to your credit cards.”

The Debtonator is a weekly radio show that is returning to Chicago airways in April whose prime focus is Credit and Debt Education. Capra is petitioning Illinois legislators to include courses in debt management and credit cards as required curriculum for graduating high school students and is of the opinion that children as young as grammar school age need to be taught about finances. He is planning to walk his petition 184 miles, from Chicago to Springfield this coming fall and has made it his cause to change financial illiteracy among future credit card holders.

Credit cards can be a very useful tool if you use them responsibly. IF you pay off your balance in full each month. Credit cards can also be used for emergency purposes that can cover a temporary financial shortfall. But make sure you pay off the balance as quickly as possible to avoid escalating interest charges. Using credit cards in a disciplined fashion is the key.
According to the Federal Reserve, U.S. credit-card debt totaled $876.2 billion as of December2006.

The figures show that the consumer debt burden continues to grow, and credit cards represent a lot of that additional debt. Credit card debt represents a very high cost debt for many households. Interest rates are in the double digits with fees and punitive interest rates lurking should you slip up. Consumers need to be as disciplined about using their credit cards and paying their bills on time as they are with their mortgages or car payments. If you miss a payment or two on your credit card, exceed your limit or even miss a payment with another creditor, your interest rate can climb as high as 27 or 28 percent, or even higher.

Bolin, with Experian, says that to keep your credit history healthy, you need to pay your bills on time, try to keep your debt to income ratio as low as possible and apply for credit only when you need it.

Students In Debt – A 21st Century Epidemic

"If you go to a vocational school or if you have a job, the credit card companies don't want you. Maybe it's because they think you know the value of a dollar. It's the college students who get the cards. So we're setting up a two-tiered system here and I believe they're exploiting the college students. An easy market." -Janne O'Donnell

Janne O’Donnell began speaking against credit card company policies in 1998 when her son Sean committed suicide. Sean was a recent college graduate with over $12,000 in debt to credit card companies at the time of his death. O’Donnell has lobbied the Oklahoma Senate to ban credit card solicitations on college campuses. She has appeared on numerous television shows including 60 Minutes and Good Morning America to make people aware of the dangers of unlimited credit. She tells her story in James Scurlock's forthcoming documentary about the lending industry, Maxed Out.

Maxed Out takes viewers on a journey deep inside the American style of debt, where things seem fine as long as the minimum monthly payment arrives on time. With coverage that spans from small American towns all the way to the White House, the film shows how the modern financial industry really works, explains the true definition of "preferred customer" and tells us why the poor are getting poorer while the rich keep getting richer.

This is just one of a countless number of similar stories about how credit card debt is destroying young lives before they even get started. Not to mention the toll it is taking on their families. Credit card debt among college students is becoming an epidemic in society today, with students being bombarded with offers in the mail and even on their campuses.

Legislation has finally been proposed to limit the credit card companies advertising toward college students. A proposition entitled "AB (Assembly Bill) 262, The College Student Credit Protection Act" was proposed by Joe Coto of the 23rd Assembly District in California. The bill would prohibit credit card companies from offering gift incentives to students who would complete their credit card applications on the campus.

But to me, that seems to be like putting a band aid on a broken leg. The real solution will come in the form of education. Debt management courses taught in schools as a requirement for graduation. Our children are supposed to be our future and they are entering the world under an increasing burden of debt.

According to student lender Nellie Mae, in 2004, more than 75 percent of college students nationwide had credit cards, and more than 40 percent of students had at least four credit cards. Student credit card debt increases significantly over college years. On average, senior college students owe nearly double that owed by freshman students in credit card debt. The credit card applications that students fill out are for the higher interest cards.

The film Maxed Out reveals that the financial industry's best customers are the broke and the bankrupt. The most profitable niche of the industry is called "alternative" or "sub prime". The bulk of their profits come from late fees and other fees for consumers with unexpected financial hardship. They target those with less than perfect credit. People like Mark Mumma, who experienced frustration with the sub-prime credit card issuer Providian, who paid over $400 million to settle charges that it defrauded its customers between 2000 and 2002.

The modern debt-style, with all of its absurdities and contradictions are exposed. Nowhere are these more evident than in a journey with award-winning investigative journalist Mike Hudson, who travels to Mississippi, Pittsburgh, and New York City interviewing the victims of predatory lending scams.

The most shocking discovery?

The predators aren't boiler room operations. They are the nation's largest and most respected financial institutions! And they're not just preying on adults anymore. In 2001, FirstUSA hired two teenage high school students as walking billboards to make their cards seem "cool" to their fellow students, and paying them commission on every completed application that they collected. FirstUSA also formed partnerships with colleges, paying them millions of dollars for access to their students personal information, setting these kids up for ruin.

In conclusion, Americans are buying with plastic at a staggering rate. From lattes to vacation packages, car payments to home-equity loans, our reliance on credit is increasing. Even the Internal Revenue Service endorses credit cards as a "convenient" way to pay your taxes. Debt is the one issue that affects all of us rich or poor, black or white, gay or straight, liberal or conservative.

It would be ideal if credit card companies agreed to take a more conservative lending approach to students to prevent them from getting too deeply into credit card debt while in school. It might even help to legislate limits for credit cards issued to students. But, more practically, students need to learn how to manage financially. In reality, credit cards and other borrowing options will continue to be available to them while they are in school, and after they graduate.

Credit card use and borrowing money have become common practices in American society and aren't going to cease.

The wisest course is to teach students to limit credit card usage and to borrow wisely.