Credit Card Fraud Consequences

							            Identity Theft:

Information Protection and Data Security

                    Is 300


                  May 6, 2008


               Innovation Group:


                 Maggie Chen
               Chuck Livingston
                Misaki Toyonaga
                 Michael Shih
                Shaun Hutchins
        Estimates show that 9 million Americans suffer from identity theft each year. This means

that about 9 million Americans’ personal indentifying information such as their names, Social

Security numbers, drivers license numbers, and/or credit card numbers, are stolen and used to

commit fraud and other crimes every year. Identity theft occurs in many forms. Identity thieves

may use the stolen information to open a credit card account or access existing account, buy or

rent housing, open utility and phone accounts, get medical services, and/or even commit serious

crimes. This can result in serious consequences such as high debts, damaged credit record, and

being put under arrest to the victims who were completely unaware of any of the frauds and

crimes. With bad records attached to their social security numbers and credit reports, the victims

can sometimes lose their jobs and be denied loans. Damages from identity theft, depending on

the type of it, can last for a long time and take large amount of money and effort to repair.

Identity theft has now been recognized as a very serious problem, and every effort is being taken

to prevent identity theft.


        The most widespread identity theft is credit card fraud, followed by phone and utility

fraud and bank fraud. There are identity theft victims in every state and from all age groups.

California, being highly populated, had the highest number of victims (41,396) in year 2006.

However, Arizona was ranked number one in the percentage of occurrence with 9,113 victims in

year 2006, followed by Nevada with 2,994 victims, and California was ranked third (Figure 4a

and 4b). In 2006, the most identity theft complaints received were from age group 18-29,

followed by age group 30-39 (Figure 3). Besides for age group under 18, the amount of

complaints filed seemed to decrease with increasing age group. All the statistics are summarized

in the bar chart, table, and map shown below:
Referenced by <http://www.ftc.gov/bcp/edu/microsites/idtheft/downloads/CY2006/Illinois%20CY-2006.pdf>
Referenced by <http://www.ftc.gov/bcp/edu/microsites/idtheft/downloads/CY2006/Illinois%20CY-2006.pdf>
  Referenced by <http://www.ftc.gov/bcp/edu/microsites/idtheft/downloads/CY2006/Illinois%20CY-2006.pdf>



       Since the Information Technology spread out to our life explosively through the internet,

Identity Theft problem has increased in our lives and in lots of companies. Identity theft

commonly occurs in the field of business where technology is used electronically and

automatically through the internet. Financial services industry especially has been damaged by

customers’ stolen credit card numbers and banks account information (Figure 1). Most of the

victims whose personal information was stolen had contracts with companies by internet-email

and internet-website/others, which are two-third distribution within the identity theft (Figure 2).

On one hand, internet technology makes our life easy and convenient by accessing to any
information through the internet, but on the other hand, identity thieves take advantage of

technology and threaten our personal information and individual life.




       Referenced by <http://www.ftc.gov/bcp/edu/microsites/idtheft/downloads/clearinghouse_2002.pdf>


                                                                                                        Figure2




                         Referenced by <http://www.ftc.gov/opa/2008/02/fraud.pdf>
       Some of the companies’ insensitiveness to information protection and data security

causes extensive consequences. ―A recent study by Meridian Research makes the projection that

by 2006 the financial institution sector alone will lose $8 billion to identity theft (Rusch 7).‖ The

biggest reason why customers’ information is leaked is because the companies’ online databases

are unsecured, and the companies should have cared and established limited access to the

personal information. Eventually, the companies lose their customers’ trust and reliance and

estrange customers from their businesses, and they end up incurring enormous amount of debts

from identity theft and unreliability.


       So what is our government doing to protect us from identity theft? Laws continue to be

written at the federal and state levels but are not effective enough to significantly deter the

problem. In 1998, Congress passed the Identity Theft and Assumption Act (1). This law protects

citizens when unlawful use of their identity has been used. In 2000, California was the first state

to pass identity theft and privacy rights protection laws. California Office of Information

Security and Privacy Protection coordinate with local authorities and recommends best practices

on privacy rights (2). This office has helped coordinate efforts to prosecute those who have been

illegally using personal information. Also, California was the first state to make identity theft a

felony. According to the Federal Trade Commission (FTC), California had the third largest

number of reported identity theft reports.


       As identity theft continued to rise, President Bush made an executive order in 2006 for

law enforcement agencies to coordinate their efforts in preventing identify theft. This was in

response to several instances where identity has been used without permission or information

was lost or stolen. Situations that occurred in the past several years was a government laptop that

had U.S. Veteran’s names, addresses and Social Security Numbers was stolen and when a
Boeing owned laptop with employee information disappeared. When this occurs or even the

possibility that personal information may have been seen, companies have paid for credit report

monitoring and liability protection for those affected. The majority of states now have laws to

allow people to place a freeze on their credit when there is possible illegal use of their identity

(Figure 5). For those states that do not have credit freeze laws enacted, the three major credit

bureaus: Trans Union, Experian, and Equifax have expanded the service nationally.


                                                    Figure 5




                  Referenced by <http://www.fightidentitytheft.com/credit-freeze-laws.html>



       Typical approaches to improving computer security can include the following: Physically

limit access to computers to only those who will not compromise security, the implementation of
hardware mechanisms that impose rules on computer programs, thus avoiding depending on

computer programs for computer security, and the use of operating system mechanisms that

impose rules on programs to avoid overly trusting potentially malicious computer programs.

Many new programming strategies are being used to increase data security. These seek to make

computer programs dependable and resistant to subversion. Firewall applications like Zone

Alarm and Windows Defender help keep the computer from getting monitored or accessed by

unwanted systems. Virus Scanners such as those by Norton, and McAfee are useful in preventing

essential components from turning into fatal crashes or hostile takeover attempts. Phishing

Sensors such as the one Windows incorporates in Internet Explorer 7 help users avoid accessing

copy sites where data is stolen. For monitoring cookies and preventing them from affecting the

user negatively the use of pop up blockers through that of Windows, or Google, or Yahoo’s

toolbars blocks new sites from coming up where phishing or cookie retrieval might occur. For

spyware there is removal software such as AdAware, Spybot, and CNET Freeware.

       Intel has created the new vPro processor technology which delivers data security and

manageability advantages that combine with the performance and efficiency of the Intel®

Core™2 Duo processor. This technology is excellent for the next generation of computing. The

processor has the ability to reduce security vulnerabilities in your network with capabilities like

improving the time to software compliance by up to 95 percent, and implement advanced,

hardware-based security features for both notebooks and desktop business PCs. It has the

capability to stop many threats—before they reach the OS, using hardware-based, inbound and

outbound network traffic filtering to proactively capture threats at the source. The processor can

configure PCs to automatically disconnect their OS – from the network if they become infected,

so that if threats do get through, they are stopped before they can spread. These type of
technologies from Intel and AMD is processing are part of a new wave of computer hardware

where security is increasingly becoming the dominating factor.

       Although some software such as anti-virus and firewall and the usage of proper hardware

management could be the weapon to protect a user against theft of personal information, one of

the more important aspects is how people protect their own personal data in their lifestyle. For

example, people should not make e-mail accounts and passwords containing important personal

information. People should also be aware of clicking unfamiliar links that come from spam e-

mails and unorthodox website…etc. Last but not least, when delivering important information to

friends or clients, everyone should use passwords and encryption. This strategy not only

improves the data security when delivering, but also shows that the senders are mutually seeking

to promote data security.




                  This cartoon might be ironic, but the concept is considerable!
                                 Referenced by < www.glasbergen.com>



       However, no one can guarantee that personal data is 100% safe! The problem could

happen not just on the internet but anywhere! A good example of this is the recent sex scandal

involving Edison Chen, who is a famous Hong Kong actor. ―Edison Chen’s sex photo scandal,‖

has been a controversy since January of 2008. Edison Chen was a successful actor in Hong Kong.

He likes to take photos of himself and his girlfriends having sexual intercourse. The entire

situation ―appears that when one of his computers had been taken into a Hong Kong shop for

repair, and someone there illegally downloaded his files‖ (Tears). Soon after the release of the

photos, his entire photo collections were put on the internet for public viewing, which resulted in

the end of his acting career. He claimed that he had deleted all his photos before bring his

computer in for repair, but the photos were still hacked and illegally distributed as Edison stated,

―These photos were stolen from me illegally and distributed without my consent (Tears).‖ Here

we do not discuss this situation is morally correct or wrong, but the danger of information

security could happen anywhere!


       Although we cannot ensure that our personal information is completely safe, there are

many ways we can prevent identity theft and reduce the risks to minimum. Now that the

magnitude of the problem with identity theft is widely known, education programs on how to

protect against identity theft should be provided by the government. By educating people on how

identity thieves steal their information and how to prevent it from happening, the government

can greatly reduce the occurrences of identity theft.
                                          Works Cited


―Fighting Back Against Identity Theft.‖ Federal Trade Commission. Retrieved May 4, 2008.
<http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/about-identity-theft.html>
Rusch, Jonathan J. ―Identity theft: Fact and fiction.‖ NEWS.com Perspective.18 Sep. 2002; 22
pars. Retrieved May 4, 2008.
<http://www.news.com/2010-1071-958328.html>
State of California website ―Identity Theft‖ Last updated April 30, 2008.
<http://www.oispp.ca.gov/consumer_privacy/default.asp>

Tears, A (2008, Feb). Chinese Actor Edison Chen Leaves Hong Kong Show Business for Sex
Photo Scandal Fallout, Retrieved May 1, 2008.
<http://blog.iflove.com/index.php/actor-edison-chen-show-business-sex-photo-scandal-fallout/>

―What's The Department Of Justice Doing About Identity Theft And Fraud?‖ United States
Justice Department. Retrieved May 3, 2008
<http://www.usdoj.gov/criminal/fraud/websites/idtheft.html#whatcommonways>


                                     Graphics References


http://www.ftc.gov/bcp/edu/microsites/idtheft/downloads/CY2006/Illinois%20CY-2006.pdf
http://www.ftc.gov/bcp/edu/microsites/idtheft/downloads/clearinghouse_2002.pdf
http://www.ftc.gov/opa/2008/02/fraud.pdf
http://www.fightidentitytheft.com/credit-freeze-laws.html
http://www.glasbergen.com