When an Experian database was breached last week, personal information about 15 million T-Mobile customers was compromised. The breach had almost immediate impact.
“I saw an article over the weekend that there is already some evidence that identities from that breach were for sale on the web,” Ken Meiser, Vice President of ID Analytics, told ConsumerAffairs.com.
Experian reports that more than 700,000 Illinois residents may have had their data compromised, including Social Security numbers. Illinois Attorney General Lisa Madigan says her office is taking the breach very seriously.
“We have been in contact with the company to review the circumstances of the breach and anticipate working with Attorneys General across the country on this matter,” Madigan said. “Identity theft is a serious threat, and incorporating a few commonsense precautions in your daily routine can greatly reduce any damage done as a result of a data breach."
Meiser says the identity theft threat has quickly evolved over the years. Not long ago it was a product of what he calls “friendly fraud,” when someone you know used your personal information to open credit accounts.
Then it transitioned to phishing scams. You might get an email purporting to be from your bank. If you clicked on a link you would be taken to a site that instructed you to enter personal information.
These days fraudsters are more likely to target the database of a corporation, like T-Mobile. Yes, it may be harder to break in but if successful, the fraudster stands to gain millions of identities to steal.
“What we've seen in the last few years, and the pace of these disclosures continues to rise, is these wholesale data breaches that includes large amounts of personal identification information (PII) for really large populations,” Meiser said.
505 data breaches
In fact, Meiser says 140 million records were compromised in 505 breaches between January and August this year. In a new report, ID Analytics shows how identity theft places a burden on victims and presents tremendous challenges to businesses and government agencies.
These days, Meiser says identity thieves have specialized. Stolen identities are used in different ways, with different fraudsters specializing in different industries.
“Credit card fraudsters are really good at getting access to lines of credit and exploiting them quickly,” he said. “They go buy a TV or go buy clothes that can be sold on eBay or at a flea market.”
In particular, identity thieves have targeted the telecom industry. Identity thieves don't try to use their stolen data to buy a big ticket item like a car, which is easy to track. Instead, they use stolen identities to make quick hits, buying expensive cell phones or TVs.
“If you're a telecom or retail bank card client, chances are good that merchandise has walked out of the store and you're never going to see it again,” Meiser said.
Looking for patterns
ID Analytics is one of the companies providing businesses with real time credit monitoring information. When someone applies for credit, whether it's for a car or a cell phone, ID Analytics instantly scans credit histories, looking for patterns. If something doesn't look right, it flags the transaction.
Consumers are more at risk now than ever before. True, they can avoid phishing scams and keep their PC's malware protection up to date, but they have no control over whether a fraudster compromises a corporate data base where their personal information may reside.
When an identity is compromised, what does that mean for the consumer going forward? How easily is this fixed?
“To go to the punchline? It looks to us like you're probably going to be dealing with the hangover from that for years to come,”Meiser said.
Meanwhile, businesses are being forced to reexamine their security measures on an almost daily basis. They're finding it challenging to keep customer information safe as fraudsters devise ever-more-clever means to obtain it.
“This is likely to be an arms race,” Meiser said. “For every proactive action that industry or consumers take, fraudsters are going to get smarter about certain things, and vice versa.”