19 October 2017
visit www.avoka.com

Security issues raised by ID theft scam

26 November 2002  |  4115 views  |  0 cash - dollar moneybags

Federal investigators in the US have arrested three men in connection with a nationwide identity theft fraud which is believed to have netted the perpetrators $2.7 million over a three-year period.

The scam is alleged to have been started by a help desk employee at Teledata Communications, a New York-based company that provides banks and other companies with credit reports from rating agencies Equifax, Experian and TransUnion. The operative is alleged to have passed on passwords and codes on 30,000 individuals to his co-conspirators in return for a $30 fee per credit report.

These were then used to transfer funds to bogus accounts and redirect cards and cheques to fictitious addresses. Police have arrested two other men on charges of mail fraud and wire fraud.

News of the scam prompted a statement by industry lobby group the Smart Card Alliance attacking the use of password protection at credit agencies for securing information systems and databases.

"The ease with which passwords can be stolen and distributed puts the integrity of virtually all of our nation's information systems at risk," says Randy Vanderhoof, executive director of the Smart Card Alliance. "Any system where access is protected only by passwords is rich with fraud possibilities."

He points to best practice initiatives at Schlumberger, Microsoft, Shell and the United States Treasury Department for the presentation of both a highly secure smart card and a personal password before information and networks are accessed.

The Alliance states: "Those executives that rely solely on password protection, like the nation's three leading credit agencies, are presenting an increasingly unacceptable level of risk to their customers and American consumers. If protection of clients and consumers is not sufficient motivation, they should perhaps think about the potential risk to shareholders from class action lawsuits related to information system security failures."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Malaysian crime syndicate behind Australian ATM scam

Malaysian crime syndicate behind Australian ATM scam

19 November 2002  |  6029 views  |  0 comments
Bank IT systems cap losses from rising incidence of cheque fraud - ABA

Bank IT systems cap losses from rising incidence of cheque fraud - ABA

13 November 2002  |  5097 views  |  0 comments
Nationwide fights over-the-counter fraud with biometric signatures

Nationwide fights over-the-counter fraud with biometric signatures

08 November 2002  |  6254 views  |  0 comments
Retailers warned of soaring counterfeit card fraud

Retailers warned of soaring counterfeit card fraud

04 November 2002  |  4350 views  |  0 comments
Bogus bank Web sites provide new twist to 419 fraud

Bogus bank Web sites provide new twist to 419 fraud

08 October 2002  |  4439 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.vasco.comvisit www.capgemini.comvisit www.fivedegrees.nl

Top topics

Most viewed Most shared
Ripple looks to drive bank adoption with $300m XRP rebate programmeRipple looks to drive bank adoption with $...
15786 views comments | 12 tweets | 4 linkedin
Swift positive on blockchain, but big challenges remainSwift positive on blockchain, but big chal...
8945 views comments | 16 tweets | 22 linkedin
satelliteGates Foundation backs Ripple collaboratio...
8040 views comments | 13 tweets | 10 linkedin
IBM uses blockchain to improve cross-border payments processingIBM uses blockchain to improve cross-borde...
7140 views comments | 9 tweets | 17 linkedin
Santander InnoVentures leads $6m funding round for Mexico's ePesosSantander InnoVentures leads $6m funding r...
6281 views comments | 6 tweets | 3 linkedin

Featured job

Competitive base + commission + benefits
Denmark, Finland, Iceland, Norway or Sweden

Find your next job