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Privacy Threats Are Everywhere

Consumers Overlook Security Risks of Cell Phones

By James R. Hood
ConsumerAffairs.com

February 6, 2006

More about ... Privacy Identity Theft Cell Phones

Despite the widespread fears of online trickery, most identity theft takes place offline and is remedied more quickly when it's discovered online, a new report finds.

This runs counter to the popular notion that spyware, spam, phishing and clever scams are the biggest threats to our personal and financial security. Quite the opposite, according to the 2005 Javelin Identity Fraud Survey Report, released by the Better Business Bureau last week.

The study found that Internet-related fraud problems are actually less severe, less costly and not as widespread as generally thought. Perhaps more importantly, it found that those who access their credit card and banking accounts online are more likely to quickly detect fraud than those who rely only upon mailed monthly paper statements.

Not only that, but consumers who opt to receive their monthly bills and statements solely on line reduce the likelihood that nefarious elements will make off with their account information by stealing mail or rifling through the trash.

Now it should be pointed out that the study was funded by CheckFree, Visa and Wells Fargo & Company, each of which has its own reasons for promoting the use of online commerce. Even so, there's no denying that the real -- as opposed to the virtual -- world is awash in data bungling worthy of the Keystone Kops.

A few recent examples:

• Fish Wrap's Revenge Perhaps embittered by centuries of slurs about newspapers being used to wrap fish, the Boston Globe used customer lists to wrap its newspapers. Newspaper bundles were swathed in recycled billing slips that contained subscribers' names, addresses, credit card and checking account data.

About 240,000 subscribers' data was tossed off trucks throughout New England before the oversight was discovered. The Globe, which is owned by The New York Times, says it will be a bit less aggressive in its future recycling efforts.

• At the Pump In Yuba County, California, crooks used tiny cameras to capture the PIN numbers of customers who paid for their gas at the pump at local ARCO stations.

The credit card readers on the gas pumps had been slightly altered and new faceplates placed over the readers which captured the data from the card. Small cameras were focused on the key pad to record PIN numbers as consumers punched them in.

• It Was Providence No, we don't mean it was fate. The Providence Health Care System lost a laptop containing the medical and personal records of 365,000 patients in Oregon and Washington State. The laptop was stolen from the van of an information services analyst who worked for Providence.

The thief broke open the van window to steal the laptop, which contained names, addresses, Social Security numbers, and medical diagnoses for patients in Providence's Home Care division. The data was not encrypted or secured in any way, the hospital chain conceded, casting doubt on just how penetrating the allegedly analyst's analysis really was.

• Not Very Ameriprising Another snafu involving a laptop was committed by Ameriprise, a network of financial advisors that until recently was part of American Express. A laptop containing data on more than 150,000 customers was stolen from an employee's car.

Again, there was no encryption or other security in place to protect the data and no evidence that the company had given much thought to the risks involved in letting employees take priceless data home with them whenever they wanted.

What To Do

While there's not much consumers can do to protect themselves against companies that are this careless with their data, there are a few simple steps that are worth thinking about:

• Switch to Paperless Billing Online banking isn't risk-free but if you're careful, it's probably safer than getting paper statements in the mail.

• Check Accounts Often Don't just look at your online credit card and checking accounts at the end of the month. Check them every few days. It's the quickest way to find fraudulent and unexpected charges. No one else is watching your money -- it's up to you.

• Buy a Shredder The simplest way to keep prying eyes off your credit card and banking statements is to shred them before you throw them out. Shredders are very inexpensive and relatively easy to use these days. If you have small children, put the shredder someplace when they can't get their little fingers on it.

• Be Alert Keep your credit card in your wallet or pocket. Sure, you're proud of your platinum card but don't leave it lying openly on the restaurant table or plop it down on the hotel desk while you fill out the check-in forms. Enterprising souls with tiny cameras are on the prowl in such spots. Look around before you punch in your PIN in a public place. If possible, position your body to make it hard for bystanders to see the keypad.

• Avoid Lonely ATMs There's more to worry about than identity theft. ATMs are dangerous places. Avoid isolated ATMs in dark or dangerous locales. It's a lot safer to use automated teller machines in stores or other relatively secure locations. The last thing you want to feel is a knife or gun in your back.

Cell Phones

Most consumers who fret about identity theft are alarmingly blasé about their wireless phones. Cell phones are just sophisticated radios, after all. Transmissions are not encrypted and can be overheard by anyone who's listening to the right frequency.

Even more basic -- your side of the conversation can be overheard by those around you. The subway is not really the best place to have a conversation with your stock broker or loan officer. For that matter, it's not the best place to discuss your clients, competitors and co-workers. The walls really do have ears and the world is a pretty small place.

There are even more serious threats to think about. Just as a dark and lonely ATM can be a threat to your physical security, so can your cell phone if someone is determined to make trouble for you.

In recent weeks, there's been a growing scandal about cell phone calling records being sold on the Internet. The danger here is that, once someone knows your cell phone number, they can find out who you have been calling and who's been calling you.

This may not be a big problem if you lead a quiet life and have no enemies. But if you are, say, an undercover police officer, a battered spouse, a witness in an upcoming trial or someone trying to elude a stalker, the illicit sale of your calling records can mean big trouble.

There are also reverse directories on the Internet that make it possible for the curious to trace a number to the appropriate subscriber. Not that any of our readers would do this, but if you're -- let's say -- seeing someone you shouldn't be, it's relatively simple for your significant other to figure out what's going on.

After a slow start, the Federal Trade Commission says it's looking into the problem. Faster off the mark, Illinois and Missouri have sued Locatecell.com, one of the larger sites selling calling records.

Cell phones are handy all right, but you pay a big price in lost security for the convenience. We don't normally cite gangsters as role models but there's a reason that drug dealers and mobsters use pay phones.

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