The fastest growing crime in America: identity theft methods and consequences

Identity Theft

In America and the rest of the world that uses internet regularly the emerging issue or the problem is that of identity theft. It is considered to be the fastest growing crime in America as millions of victims have been reported over a period of last couple of years. Identity theft is a crime when someone uses the personal information such as name, Social Security number, credit card number or other identifying information, without the permission of the concerned person to commit fraud or other crimes typically for economic gain. Identity theft can happen to anyone when an opportunity arises and thieves are not very particular to one's age.

Unlike our fingerprints, which are unique to each one of us and cannot be given to someone else for their use, our personal data - especially our Social Security number, our bank account or credit card number, our telephone calling card number, driver's license, PIN numbers, debit card numbers and other valuable identifying data - can be abused. If they fall into the wrong hands such as those criminal who steal identities the consequences could be very severe and damaging. In the United States and Canada, criminals have abused identities using Internet and computers. The Internet has become a breeding ground for criminals to obtain identifying data, such as passwords or even banking information. Many people respond to "Spam" - or unsolicited E-mail - that promises them some benefit but requests identifying data, without realizing that in many cases, the requester has no intention of keeping his promise. This is how criminals obtain large amount of personal data.

Identities have been used for false applications for loans and credit cards, fraudulent withdrawals from bank accounts, fraudulent use of telephone calling cards, or obtaining other goods or privileges while some criminals have taken over identities altogether, running up vast debts and committing crimes while using the victim's names and the irony is that most victims don't even know how the perpetrators got their identity numbers and also the victim often has to prove his or her innocence.. As a result consumer fraud has threatened both the consumers and the economy, as it has become a big business now. For example, Federal Trade Commission (FTC) receives more questions and concerns about credit and credit fraud than any other topic.

Methods of Identity Theft

There are many methods being used for identity theft but when it comes to Internet then Phishing, Pharming and Spyware are commonly used. "The Internet Crime Complaint Center (IC3), a clearinghouse for law enforcement agencies dealing with cyber crime, received 103,959 complaints of genuine Internet fraud in 2004, according to its 'Internet Fraud Report.' Of those complaints, 71.2% involved online auction fraud, while credit or debit card fraud accounted for only 5.4%. Of the actual fraudulent transactions, 63% were performed via e-mail, while 23% were done via Web sites, real or false" (Bosworth, 2005).

Spyware

Spyware is a special kind of software that helps in collecting information about a person or organization without their knowledge usually by taking control over a computer connected to the Internet. Spyware gets installed on computers as part of free software, such as games and screen savers, and offered on the Internet. Email attachments, web links, and music or video downloads have also become a big source of spyware. Sometimes it also happens that a person is not even downloading any software or opening any email attachments but still some of the spywares are so strong that they can also exploit web browser vulnerabilities in "drive-by" downloads. These softwares try to make people believe about the legitimacy of certain downloads like web browser updates. Some common spywares used by cyber thieves include:

Keyloggers: Keyloggers as the name suggest use information put in by pressing key for passwords, account numbers, and usernames etc. Every keystroke a computer user makes is recorded and the information collected is used to commit crimes because of stolen identities. Mostly web sites are used for spreading keylogger programs.

Redirectors: This is the method in which users are redirected to a fake website where the user is asked to punch in the key information like password, username, and account information. Mostly these are counterfeit websites that imitate the genuine website.

Remote Access: it is one of the sophisticated methods in which criminals take control of a computer from a remote access point and use it not only for identity theft but also for illegal activities, such as sending spam or phishing emails or spreading keylogger programs.

As an immediate effect of these softwares computer of the users becomes slow and some systems even lead to a situation where they crash. Once these softwares make a place in a computer they reduce the consumer's ability to control his or her own computer by making changes to the computer's settings, including security settings. Apart from personal computers these spywares also affect computerized databases maintained by businesses, universities, and government agencies. The softwares were initially meant to monitor the computer use of employees and parents monitoring their children's online activities but presently they are increasingly used for identity theft. Even if these softwares are not used in identity theft still they cause a lot of trouble both mental and monetary in redressing the issues related to their computer's performance.

Pharming

Pahrming can be considered an advanced form of phishing. Spyware, keyloggers, domain spoofing, domain hijacking, or domain cache poisoning are commonly used for Pharming but hijacking a web site and redirecting visitors to a fake site is the most commonly used method as discussed under spyware. Previously pharmers used emails to infect a users computer as when the user opened the email it directed to a particular web site that installed spyware on a user's PC. However, the technology for pharmers has advanced and they are not dependent on emails anymore. Viruses can attack using messengers or using key loggers

Pharmers also act in a very organized manner on the Internet. They now use variety of sophisticated method to redirect the traffic to their web sites. Changing web addresses, domain names, and slamming procedures these criminals have abused the information of many users on the Internet. As indicated earlier these pharmers have also not spared multinational, government or non-government organizations. Pharmers now not only small local servers operated by Internet service providers (ISP) but they also target the 13 servers on which all other DNS servers depend.

Implications

Businesses & Large Organizations: Among large scale businesses that get affected includes the financial sector other than individuals. Electronic banking services have been greatly affected by these criminals who are euphemistically called hackers or crackers who conduct phishing or pharming. They not only steal the information and enter into the security system of banks but when they are caught they also retaliate. They retaliate using computer viruses, "worms" and "logic bombs" that can destroy hard drives. While robbers of banks using guns and other such weapons can also steal big amounts but they could end up in prison and the amount looted could be recovered. In case of these hackers, the sleuths have new technological tactics to deal with. These criminals use technology to support their criminal intentions. "Jeffry Scheel, president and CEO with Vocent, Mountain View, Calif., points out that the rising tide of password theft with tools like phishing, pharming, and spyware has more than a few banks on the hunt for solutions with broad reach" (Bielski, 2005).

All the big companies own up to the fact that some hackers and crackers have accessed their computerized information through phishing & pharming. A number of these organizations, banks and financial institutions had to suffer losses due to computer frauds. In 1994, the hackers' activities made headlines when these computer savvy and technology driven criminal broke into "firewalls," or security systems of Citibank. Citibank had to revamp its security system to prevent any future problems but the technical expertise of these criminals cannot be checked. They might update their skills and get back with more vengeance and greater technological prowess.

Computer frauds and hacking activities have become a constant war with these intelligent criminals. There have been instances in which they have been able to capture the complete systems of Internet service providers and even threatened them to destroy their system and to distribute all the credit card information. In certain cases there have been employees who sabotaged the whole system. Internal employees having access to critical files have also caused trouble in certain cases. Dealing with an outsider as well an insider is a hard to juggle task. All the major banks and financial institution are deeply worried about electronic money, open-access World Wide Web sites, investment dealings world wide and the threat of those breaking into secure systems.

Individuals: People whose identities have been stolen can spend months or years cleaning the mess. Their hard-earned money is lost for no reason at all. Cleaning up the mess that the thieves have made by using good name and credit record is a Herculean task. In the meantime, victims may lose job opportunities, be refused loans, education, housing or cars, or even get arrested for crimes they didn't commit. A victim's losses may include not only out-of-pocket financial losses, but also substantial additional financial costs associated with trying to restore his reputation in the community and correcting erroneous information for which the criminal is responsible.

Correcting incorrect information about the financial or personal status, and trying to restore the good names and reputations are daunting tasks for the victims of identity theft and fraud. The damages done by the criminals take far longer to undo than it took the criminal to commit the crimes. Victims can suffer a lot once their identity has been stolen and abused. The hard-earned money of the person is lost for no reason at all. Apart from the financial aspect, peace of mind is also stolen along with the identity, as the victims have to go through a lot of trauma as a result of the crime. The proportion with which the crime has grown has also caused a dent on the economy. Some credit companies now keep a certain provision for the losses related to identity theft. Hence there are greater implications of the crime and the gravity of the situation is needed to be understood.

Solutions

Technological: Among many ways in which users can take care of the phishing, spyware, hacking and other such methods one method is also the use of technology. For example for spyware, anti-spyware software are available that identify and remove spyware from a user's computer. The issue again with such softwares is that they have to be updated constantly as they only detect the known spyware. Like other technologies the criminal technologies used for identity theft and other cyber crimes are also advancing. "It is recommended that users are running three types of security software. Recommendations include; a solid firewall, an anti-virus package, and an anti-spyware package. Naturally it is important to not only use these products but to keep them up-to-date with the latest definitions and patches. Don't be lulled into a false sense of safety though. Even with a strong defensive perimeter it is still possible to get hijacked or infected. Use caution and common sense" (Porter, 2006).

Prevention: For medical conditions it is said that prevention is better than the cure. Same seems to be the case with identity theft. Individuals have to be alert and aware of the methods these criminal use. Everyone should be particular about giving out personal information. Bills or mail containing checks should not be sent from unlocked mailboxes. One should ask for & review credit report updates regularly for new inquiries, accounts or negative information. One should not offer all the information quickly at Internet. One should remove one's name from promotional lists operated by credit reporting agencies and credit grantors. There are a number of organizations both governmental non-governmental that provide a lot of help in this regard. So a complaint or a notice can be given to such organizations such as Federal Trade Commission as under the Identity Theft and Assumption Deterrence Act, the Federal Trade Commission is responsible for receiving and processing complaints from people who believe they may be victims of identity theft, providing informational materials to those people, and referring those complaints to appropriate entities, including the major credit reporting agencies and law enforcement agencies.

Conclusions

Crimes and offenses committed through computers are rampant in this technological age. Criminal are more technology savvy then we would like to think. Whether it is hacking, cracking, identity theft by phishing, pharming & spyware, these offenses have caused tremendous amount of damage to individuals as well as established business. The need of the day is to find out ways to curb these crimes not just on a national level but on a global level with the help of stringent laws and regulations. As we know from the past experiences that laws and regulations are not enough as the whole computer and it industry must get together with businesses and other private parties to devise better technological ways to curb such crimes. "Control of access by optical patterns, DNA identification, voice spectrographs, encryption, and other methods may slow down hackers, but no method is foolproof or presents much of a challenge to today's most-talented cyberpunks" (Stephens, 1995).