In a news story that gathered momentum throughout the month of February, a Georgia firm that maintains one of the largest consumer credit databases in the country has admitted to releasing the records of thousands of individuals to identity theft scammers.
ChoicePoint Inc., headquartered in Alpharetta, Ga., sent letters to 35,000 Californians whose lending and credit information may have been improperly disclosed. The letters were sent to comply with a California law requiring notification in such instances.
As the California notification letters became public knowledge, consumers and attorneys general in other states began to demand that ChoicePoint broaden its notification campaign to other states.
Ultimately, the company agreed that some 110,000 additional people spread out in nearly every other U.S. state would need to be contacted with letters similar to the ones received by Californians.
Investigators in Los Angeles County, Calif., have identified as many as 50 bogus accounts that were established with ChoicePoint by identity theft rings that posed as business owners seeking personal credit information.
One California man, who faxed a request to open a ChoicePoint account from a FedEx Kinko’s location, has been arrested and convicted. Authorities believe there were others involved in the fraud case.
The Los Angeles County sheriff’s department has said it knows of about 765 instances of financial charges being made to consumer accounts by the ring that accessed the company’s records.
ChoicePoint maintains a database of personal financial information, to which it offers customizable access or prepares reports for companies and government agencies. The company says it is strengthening its screening procedures as a result of the incident.
THE OLD FASHIONED WAY . . .
S hredding service providers still have plenty of ammunition to convince companies to shred their obsolete documents. According to a recent study, 72 percent of identity theft occurs
offline, costing Americans $52.6 billion in 2004.
Financial consulting firm Javelin Strategy & Research of Pleasanton, Calif., conducted the study. James Van Dyke, the company’s principal analyst, tells Reuters that identity thieves are most often picking through trash or examining lost or stolen wallets for personal information rather than resorting to electronic means.
The Reuters report says that ID theft by family members, friends and neighbors accounts for an average of $15,607 in damages per consumer, while online thieves account for $2,320 in damages.
Van Dyke tells Reuters that the Internet is the best way to catch fraud because it allows consumers instant access to their financial records and balances, as opposed to a paper statement that arrives once every 30 days.
WINDSORTECH, RETIRE-IT SIGN AGREEMENT
W indsorTech Inc., dba QSGI, and Retire-IT, a nationwide provider of IT logistics and outsourcing services, have signed an agreement in which Retire-IT will offer QSGI’s data destruction, IT auditing and asset management services through its client network.
"Our data destruction and asset management services are a natural fit for Retire-IT’s partners," Marc Sherman, chairman and CEO of WindsorTech, says. "We also look forward to offering Retire-IT’s logistics services to our own customers. These services will help our clients better manage the cost of transporting their end-of-life IT equipment."
Retire-IT President and CEO Kyle Marks says, "WindsorTech’s commitment to quality, as well as their solid, process-driven approach, provides our customers the necessary assurance that their end-of-life IT equipment will be securely and responsibly retired."
Retire-IT handles the retirement, remarketing and recycling of idle electronic equipment, while WindsorTech, Hightstown, N.J., manages the information technology products of Fortune 1,000 and government customers, specializing in data security and regulatory compliance.
STUDY REVEALS DECREASE IN CREDIT CARD FRAUD
A ccording to a survey of 935 American adults conducted by
New York-based Ipsos-Insight, a market research firm and
member of the Ipsos Group, consumers believe credit card fraud is increasing, though such incidences actually appear to be leveling off.
The study compared survey results from 2004 with those from 2005, revealing a 4 percent increase in the number of Americans who say they know someone who is a victim of online credit card fraud, which is at 20 percent. However, only 4 percent of Americans in 2005 report being personal victims of such a crime, the same as in 2004.
The story is the same with offline credit card fraud, with a reported 44 percent of Americans in 2005, and 38 percent in 2004 saying that they know some who has been a victim of fraud, but only 12 percent from year to year report having fallen victim themselves.
The data show that concern about credit card fraud offline has decreased from 76 percent in 2004 to 71 percent in 2005. Concern over online credit card fraud, however, has increased slightly from 69 percent in 2004 to 72 percent in 2005.
SAN JOSE RINGLEADERS SENTENCED
Three individuals described by prosecutors as the "ringlead-
ers" of a widespread identity theft ring have been found guilty of 105 felony charges, according to the Silicon Valley/San Jose Business Journal.
The three San Jose-area men have been found responsible for an identity theft crime spree that most likely had dozens of victims.
The convictions of the three in early March—along with five others who pleaded guilty earlier—should bring to an end an identity theft ring that recruited waitresses to retain customer credit card information inside portable storage devices. An investigation by the San Jose Police Department’s High Tech Crimes Unit determined that the "skimmed" information was later used to make counterfeit cards that could be used along with fake drivers’ licenses to obtain goods and services fraudulently.
The Santa Clara County District Attorney’s office estimates that losses from the ring’s activities could approach $100,000 and that the number of victims could be in the dozens.
The three men—David Plunkett, Courtland Bivens and Taurice Jordan—were convicted in early March and could face more than 25 years in the state prison system, according to the report in the Business Journal.
POLL REPORTS CANADIANS’ THOUGHTS ON ID THEFT
Four in five Canadians think identity theft is a serious problem in Canada, and that concern is growing as the number of people with personal experience with the crime increases, according to a new telephone poll conducted by Ipsos-Reid for Intersections Inc. and Carlson Marketing Group Canada Ltd.
The Identity Theft Index Canada (ITIC) survey is the first in a series of tracking polls the companies intend to commission to gauge the awareness of and the types of responses to the growing crime of identity theft among Canadian consumers.
The ITIC poll found that one in four Canadians reported that they have been or that they personally have known a victim of identity theft. One-third of respondents said their level of concern about themselves or someone they know becoming a victim of this crime is higher than a year ago.
The types of fraud resulting from identity theft are wide-ranging, according to the ITIC poll, with 70 percent of the respondents who have been affected or who personally know a victim saying the identity theft resulted in unauthorized credit card purchases, the most frequent, but least costly form of identity theft fraud for consumers. However, significant percentages of these respondents reported more serious frauds, including takeover of existing credit card accounts (43 percent), the opening of new credit card accounts (36 percent) or new loans (22 percent), unauthorized bank account access (42 percent) and the use of the victims’ personal information in other types of frauds, such as to obtain government benefits or medical care (24 perecent).
Most identity theft fraud in Canada appears to be self-detected, according to the survey. Thirty-four percent of Canadian victims discovered the fraud while reviewing their bank statements, 26 percent found it while reviewing credit card statements, and 8 percent detected the fraud while reviewing credit reports. Thirty percent reported that their bank or credit card company first discovered the fraud, the ITIC poll found.
Encouragingly, 70 percent of respondents reported that they consider themselves "very well" or "somewhat" informed about how to protect against identity theft. When asked what steps they have ever taken to protect against identity theft, 69 percent of respondents said they have followed the security procedures requested by their credit card company, 65 percent said they reviewed their credit reports, and 54 percent said they bought a shredder to destroy documents. Eighteen percent of respondents said they have bought identity theft insurance.
A full report of the survey results is available online from Ipsos-Reid at www.ipsos-reid.com.
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