Identity theft, privacy and information security—executive coaching (part 1)

May 5, 2:12 AMIdentity Theft ExaminerJoe Campana

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Identity Theft    

Not too long ago a high profile executive of a financial institution said to me, “Identity theft! That happened to me, I called the credit card company and they took the charge off my account, it wasn’t a big deal.”

His response is a tribute to a common misunderstanding that consumers have about identity theft—that id theft is credit card or bank account fraud. The example is alarming because a leader of a financial institution should know better. The personal situation that the executive referred to was more likely an account error, not existing account fraud and certainly not identity theft in the pure sense.

Credit card and bank account fraud are often classified as identity theft; however let us consider identity theft in the purer sense to broaden our perspective.

With three key pieces of personally identifiable information (PII)—a person’s full name, Social Security number and a date of birth, an identity thief can perpetrate a wide variety schemes—financial and non-financial. You may be surprised just how easy the PII is to get—see this short video.

There are two types of financial identity theft—existing and new account fraud. Existing account fraud is the use of your existing accounts. New account fraud results when an identity thief uses the PII to open new credit card, bank, loan or other financial accounts in your name. New account fraud is more challenging to detect and resolve.

There are several types of non-financial identity theft, which are insidious by comparison to financial identity theft. Once one or hundreds of fake IDs have been produced with your PII, the opportunities for fraud are only restricted by the imagination of the crooks.

Non financial identity theft involves the fraudulent use of PII for medical identity theft; committing other crimes in the name of an innocent person; for obtaining false government identification such as Social Security cards, driver’s licenses and passports that can be used for nefarious purposes such as eluding law enforcement, acts of terrorism and for various types of fraud—employment, Social Security government benefits, tax and insurance.

Identity theft can ruin your credit, takes years to detect, take hundreds of hours to resolve, wreak emotional havoc on your life and cost thousands of dollars to resolve. It takes more effort than making a toll-free call to your credit card company to resolve identity theft.

In forthcoming parts to this article, I will discuss some of the common myths and misunderstandings surrounding privacy, information security and related compliance.