Most people don't realize that many cases of identity theft can be traced back to an online underground

Credit Fraud

Everybody knows that identity theft has gained a lot of ground due to the ability to quickly exchange information over the internet. But most people have no idea just how involved the underground black market for identity theft is. Picture an e-bay type environment with buyers and sellers who have the ability to rate each other and leave feedback about transactions. Only this online hot spot is a breeding ground for illegal activity. Thieves can even purchase ad spaces or web banners advertising their goods. 

How it Works

Instead of selling cars, video games and DVDs, these people log on and sell identities. Some come in fragments—just simple account numbers with expiration dates and security codes. While others are complete package deals—social security numbers, bank account numbers with passwords and PIN codes, date of birth and mother’s maiden name. No matter what people are selling, stolen identities are a hot commodity. But some don’t command as steep of a price as you would think.

Credit card numbers can be purchased for as little as fifty cents per number, and complete identities can be purchased for as little as $14. Financial information for major corporations can be purchased for as low as $300. Each of these purchases promises a high return on investment with thousands of dollars instantly available for a spending spree.

Statistics show that only about 5% of cyber criminals are ever caught and prosecuted. This is partly due to the fact that identity thieves don’t usually operate alone. Countless people across multiple countries could be involved in one single data breach or theft making it difficult to trace the crime back to one person or location. Further complicating things, many identity thieves operate out of anti-United States countries making prosecution almost impossible even if the thieves are caught.

In addition to selling actual identities, thieves also advertise reliable drop addresses (abandoned homes or buildings that goods purchased with stolen cards can be sent to) and cash out services (where a thief offers to make a duplicate debit card that will allow you to actually pull cash out of someone’s account).

These thieves are detailed and specific. They plot and plan their business operations to the exact detail. Expert thieves know how to patiently wait for the current billing cycle of a card to close, and then they begin hitting it on the first day of the new cycle so they can likely spend for 30 days undetected. It’s literally credit card theft at its finest. 

In order to sell on the online black market sites, a person must allow the administrators to sample his or her goods so that they know he or she is legitimate. Once thieves are allowed to begin posting in open forums, they will connect with others who are buying or selling what they need. After a connection is made in a forum, thieves usually move onto a smaller stage via ICQ instant messaging (a multi-lingual site that doesn’t require registration or an email address in order to chat) where they can privately work out the details of their crime.

Because thieves from around the world tend to connect on the internet black market, there isn’t one currency that works for all. So thieves usually pay with e-gold (an online money exchange site backed by gold bouillon) or Web Money Transfer. Although these sites have been used to conduct legitimate business transactions as well, they have also been known to (unknowingly) aid more than one identity thief along the way.

Experts estimate that as many as 5,000 fresh card numbers can be up for sale at any given time. Because the shelf life of cards tends to be short (since rightful card owners are bound to catch on at some point) thieves tend to hit cards multiple times in a matter of minutes before moving on and looking for new cards. Thieves with more advanced agendas, like those looking to actually assume someone else’s identity or open new accounts in someone else’s name, use the basic information provided by online sellers and use it to look people up in public records searches in order to learn more about them.

Identity theft is the fastest growing crime in America, with the Federal Trade Commission estimating that somewhere between 9 and 10 million new people become victims per year. In reality the numbers are probably higher (underreporting skews the statistics). 

What You Can Do

1. Invest in a paper shredder. Statistics prove that most people throw out all junk mail in exactly the same form it came in. Many don’t even open envelopes of pre-approved credit card offers. Dumpster diving identity thieves are strategic and will target dumpsters behind office buildings or apartment complexes or individual trash cans on residential streets. So do your part to greatly reduce your risk of identity theft by purchasing a shredder and actually using it.

2. Reconcile your bank statement and your checking account each month. With such a low percentage of people reconciling their bank statements each month, identity thieves have a greater chance of getting away with a crime on an existing account without ever being detected. This could create significant problems for those who keep just enough money in their bank accounts to survive. If even $50 was stolen from a bank account, and a person isn’t aware of it, an overdraft of available funds may occur resulting in fines and late fees on bills that were actually paid on time. Reconciling your bank statement and your checkbook every month is one of the quickest ways you can spot existing account fraud and stop identity thieves. Remember that it’s not your own transactions that really need to be monitored as much as it is fraudulent activity that may be going unnoticed.

3. Consider purchasing an identity protection product like ID Secure. Because some things about protecting your identity are just beyond your control, purchasing a product like ID Secure might greatly increase your peace of mind as well as the level of protection guarding your identity. For just $1 for the first month, and $12.99 a month after that, a professional identity monitoring company will use advanced web crawling technology to search the internet and public records to make sure that your social security number, credit and ATM cards and other personal information isn’t being fraudulently used in any way. ID Secure makes sure your identity is being monitored 24 hours a day seven days a week helping to keep it safe. If fraudulent activity is suspected, you will be informed immediately. You can learn more by clicking here.

Law enforcement officials admit that they might not ever be able to get a firm handle on the internet black market. Technology always seems to be a few steps ahead. So make sure you are doing your part to protect yourself (and those you love) from being reduced to a name and account number that’s sold for fifty cents to someone looking to make a quick buck. Identity theft can happen to you. Be ready for it.