May 1, 2008— -- The first step to preventing identity theft is to understand how it happens. Here are some of the most common vulnerabilities and strategies for fighting back:
Hacked Shopping Sites
Shopping online has become so routine for many of us that it's easy to forget that some Web sites haven't taken the steps they should to protect us. Sophisticated identity thieves -- often in foreign countries -- spend all day just trying to figure out how to hack into those sites and grab their treasure troves of credit card numbers and other identifying information. What to do?
When I infiltrated the Internet underworld where identity thieves buy and sell people's information, it was most gut-wrenching to see "full profiles" where the crooks even had the person's Social Security number, mother's maiden name and ATM PIN. Usually, this kind of detail is provided to the crooks by the victims themselves, when they respond to phishing e-mails. A phishing attack is an illegitimate e-mail made to look as if it's from a bank or government agency. They're very convincing. The crooks claim they need to verify your account information "for your own protection." They then ask for every possible financial detail.
As we show you in Part 2 of our special report "Stealing You" on "World News With Charles Gibson," clever con artists have learned to attach false fronts to ATM machines and capture people's PIN numbers that way.
Basically, they mount a skimming device over the slot where you insert your card. Then, there are two ways they learn your PIN. Either they mount a hidden camera nearby to record your PIN. Or they rig the machine so your card gets stuck in it. A spotter waits nearby, and when you struggle with the card, he offers assistance, claiming he just had the same problem. Eventually, he asks you to input your PIN, claiming that's what's needed to get your card out.
You should be aware that crooks have even managed to mount skimmers on the increasingly common credit card authorization devices in stores. A ring in Delaware slapped one right on the device at the front counter of a drugstore without employees even noticing.
Would you hand a stranger your credit card? Sounds risky, but we do it all the time at restaurants. It's one of the few times we are separated from our card. Florida authorities say it's the No. 1 source of credit card cloning cases in that state. Waiters and waitresses can carry tiny skimming devices, the size of a pack of gum, and record all the information on the magnetic strip of your card. They then sell that information to more serious crooks who use it to clone cards.
Data BreachesIt's frustrating to write about this category because consumers have so little control. When companies lose laptops carrying precious personal information or when hackers gain access to their hard drives, there's so little consumers can do. We live in a high-tech world and it's nearly impossible to withdraw from it.
Dumpster DivingThis is the oldest form of identity theft and it still happens. Garbage can be a rich target for thieves willing to do the legwork.