Cyberfraud and identity theft run rampant

Financial scams remain the largest type of cyberfraud activity, according to a security expert at Foundstone, the professional services division of McAfee Inc., but identity theft isn't as lucrative as it used to be. Ron Nguyen, a director at Foundstone, explains that fraudsters release bots - software that automatically searches for information - to comb the Internet, collecting personal info that is resold to other groups. This information is then used for either spamming purposes or to perpetrate some type of fraud such as cloning credit cards. "It's big business," he says. "There're going to sell to the highest bidder." According to Nguyen, cyberfraud artists have raked in billions of dollars. "I've been hearing reports that the amount of annual revenue that comes from this sort of cyberfraud is rapidly growing and is actually approaching the point where it is generating more revenue that the illicit drug business," he tells Network Letter. A 2005 United Nations drug report estimated that the global illicit drug market in 2003 was worth US$13 billion at the production level. Identity theft is a major money maker for the underground economy in the US and figures found on the IT Facts website (http://www.itfacts.biz/) indicate that it approached US$50 billion. That is down 11.5% from 2005 when Americans lost US$55.7 billion to criminals who stole identities. But the value of an identity, according to Nguyen is on the decline. "We found that identity theft has become such a big boom that more and more people are stealing identities and, in fact, it's hit a tipping point where there's a glut of stolen identities and because of this glut...the price has gone way down," he says. "In the past you might have been able to sell a stolen identity for $100 or $50. Today if you en masse you can get the price down to $1.00 per identity. And the glut of so pronounced that when your identity is stolen it will take somewhere between six and nine months before even get to your identity, so they can clone your credit cards."Nguyen was in Ottawa last month giving a course to a number of government IT professionals on "The Essentials of Hacking". The course is designed to give attendees a better perspective on the threats and where their organization's systems might be open to risk and where the vulnerabilities exist. It also teaches attendees how to prioritize their resources in protecting their systems and increasing the overall security of their systems. For the most part organizations already know that their network doesn't have the right security protocols in place, according to Nguyen, adding that they just need someone to help them understand the problem. "We can actually articulate and quantify for them in terms that their management can understand and I think that's the missing link," he says. "People aren't dumb and blissfully unaware. I think where the disconnect is they have trouble articulating it, quantifying it and reporting those issues . We come in there and we help them do just that."

Cyberfraud and identity theft run rampant

News | April 19, 2007

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