Hi Julia,

I just read your piece, “The Fallacy of Identity Theft”, and found it to be very informative. You certainly made some excellent points about the term “identity theft” and how it inaccurately describes the crime. I also thought your points about identity theft beginning to wane – total losses have seen a significant decline since 2003 – were interesting.

You reference Javelin Strategy & Research’s recent Identity Fraud Survey Report in your article and I think it’s important to point out a few items you did not mention. According to the report, for the past few years we have in fact seen a decline in identity fraud. However, we saw a 22% increase in the U.S. fraud incident rate in 2008 alone – a return to levels unseen since 2003.

As you mentioned in your article, the declining economy is partially to blame but there are other factors in play. The profile of an identity thief has changed. They are out for money, not fame and they are using sophisticated technology to defraud consumers like botnets, malware, phishing schemes, and keystroke logging. The technology used is easy to come by and getting harder to stop and consumers are often unaware of the threats and how to prevent an attack on their personal information.

On top of that, consumers are making it easier than ever for cybercriminals to access their personal information – they are practically putting it into their open hands. Social networking sites encourage consumers to divulge personal information and most of our day-to-day transactions have moved online. And what’s worse is that many have become apathetic and rely on their banks and credit card companies to sort out the mess should they experience a breach or theft.

Finally I would like to bring to your attention several points:

• The thousands and thousands of consumers who utilize our identity theft assistance services have spoken, and they tell us that identity theft is disruptive, time consuming, and costly not just in dollars, but in time and emotional stress.  Identity theft is not about credit cards, it’s about your financial and personal life, and that includes your bank accounts, employment, tax refunds, and much more.
• Identity thieves are not kids, they are sophisticated criminals that have moved their modus operandi into the computer and smart phone, and your assets and information stored in those machines need to be protected.  You would not walk the streets of Manhattan with blank signed checks from your account loosely pasted on your back, so why do it in the electronic world?
• With the explosive growth in computer based social networking, and the use of vehicles for criminal phishing and Trojan attack having  grow geometrically – exposure is at an old all-time high – and old fashioned anti-virus solutions – without identity theft add-on’s – are just not enough.

I certainly grant you the point that a lot of people are buying a lot of services that are not worth the money.  Snake oil salesmen are rampant in any new industry.  But the consumer needs to assure:

• The product they buy to protect themselves is real and useful, not hype.
• The company they deal with is legitimate, with their bona fides and phone number available on the Web site.  One does not want to go to a company for privacy protection that is not stable, with strong privacy policies, and PCI compliant at the highest level.
• That they are buying what they think they are buying; and when they think they are simply getting something for “free,” they  understand what they have committed to.
• That the company they are buying from has invested in service and support professionals standing by for toll free personal assistance.

Let’s not throw the baby out with the bathwater. Identity theft – by whatever name we choose to use – is a real problem, and will continue to be for many years. The world is digital – our transactions, communications, and relationships are tracked by marketers, read by virtual friends, and if not secure, vulnerable to fraudsters.  We can’t change the evolution of technology, nor should we, but we can become smarter about how we use it, who we transact with, the information we divulge, and most importantly, how we secure and monitor our personal information. Education is the first step to understanding the risks. When consumers educate themselves, useful services will dominate the market.

There are things consumers can do to prevent this type of theft from occurring and it could save themselves and retailers a lot of time and money. Intersections Inc. is a provider of identity theft protection solutions, but we are also trying to educate consumers and make them aware of the threats that exist in the market. We have brought together influential voices in the security industry – the Identity Theft Assistance Center, security expert Neal O’Farrell, Identity Theft 911, Credit.com and others – and created IDGuardian.com. IDGuardian.com is a source of information concerning identity exposure, fraud and online security. It’s a free resource for consumers who have questions about identity theft.

I welcome you to visit IDGuardian.com or contact us if we can assist you in more deeply understanding the risk of financial fraud to consumers.

Regards,

Michael Stanfield
CEO
Intersections Inc.

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