Security

Stolen credit reports: What you can do to protect yourself

Patrick Lambert follows up on the stolen celebrity credit reports. You don't have to be famous to be at risk. What can individuals and businesses do for protection?

The hacking underground is filled with all sorts of scams, but most of them are based on first obtaining information about unsuspecting victims. This can be credit card numbers, dates of birth, social security numbers, and so on. But the one item that contains all of that, and everything else a hacker could dream of, is the credit report. On a typical credit report, you find a lot more than just your personal information, you also have all of your financial history. A lot of financial institutions and businesses ask things like where you have a bank account, or what credit card you own, for the express purpose of combating fraud. But if the hacker has your credit report, then it's game over. There is nothing more that a business or bank can get access to in order to prove that you are truly yourself.

Identity thefts are not new, but earlier this month a fairly high profile incident happened when news came out in Bloomberg that a site was providing the complete information, credit reports included, of celebrities and politicians. Among the targeted names we find Michelle Obama, Paris Hilton, Ashton Kutcher and more. At this time, the site is still up, and the author was even so kind as to place a traffic counter on the front of the site. Right now, there are over 700,000 people who visited it. So the question naturally is, how do these people get their hands on them? It turns out that this is not very hard. Full information packages can be bought in underground channels for just a few bucks. The Tor network, despite all of the good that it does, also hosts many forums that deal with this sort of trade. Anyone who downloads the Tor Browser package can run a so-called Hidden Service, which can be a forum that is completely untraceable. This is what replaced IRC and Russian forums for these guys.

The underground transactions are typically done using digital currency like Webmoney or even Bitcoins, and are also hard to track. Finally all that remains is for the original crook to get the credit reports in order to sell them, and while there is no way to know where the celebrity reports came from, it could be from public portals like AnnualCreditReport.com, which is a service that has over 200 million US reports and gives them out freely if you know a few key pieces of information. Basically, finding the information is not hard, which puts us as customers and potential victims in a precarious position. You don't have to be a celebrity to be at risk.

What can you do to protect yourself?

Unfortunately, right now there isn't a lot that can be done. The stock response from credit agencies and financial institutions is that you should keep your personal information private, watch who you give it out to, don't let your credit card out of your sight, and make sure to look at your credit report on a regular basis. In fact, that last one is probably the most important. You can get a basic online credit report for free once a year, and you can pay if you want it more often. Of course this will only tell you something happened after the fact, such as if someone uses your identity to open a mortgage account. Legally, you won't be responsible for charges that you don't incur, but in reality having your ID stolen may mean a host of unwanted problems like calls from debt collectors or having to explain your story over and over again.

There are also ID protection companies such as LifeLock, which offers a service to protect your personal identity. The way they work is fairly simple: they monitor your credit report and alert you when they see any suspicious change. They then work with you to remove anything that wasn't done by yourself. Some even provide monetary guarantees to make you feel more secure. This will obviously cost you a monthly fee, and overall it probably isn't worth it unless you have some reason to think that you may be targeted, such as finding suspicious activities on your accounts.

Yet perhaps the most common way people get their identity stolen is by giving it away. Phishing emails and scam phone calls are still all over the place, and they work. There are a lot of sophisticated scams out there that will target older people or those living alone. Almost every week there is a new scam being invented somewhere, from renting scams, job scams, lottery scams, you name it. Businesses are not immune either, with business accounts being able to get much bigger loans. And quite often, the bad guys don't only ask for money any more during their scams, they want a bank account for wire transfers, or other similar purposes. Remember that it only takes a few personal details to gain access to a credit report, and at least for now, it's very easy for crooks to get their hands on those.

About

Patrick Lambert has been working in the tech industry for over 15 years, both as an online freelancer and in companies around Montreal, Canada. A fan of Star Wars, gaming, technology, and art, he writes for several sites including the art news commun...

5 comments
bobrichards1
bobrichards1

The advice in your article does not work for millions and that is the problem. The credit bureaus simply report what the creditors tell them to report. When a consumer complains, the bureaus simply confirm the same incorrect information with the creditors. And millions of consumers get stuck at this point, having no leverage to get the creditors to fix errors. 60 Minutes showed how their reporter, Steve Croft, got nowhere using the instructions in this article. Here is a solutions that works and how I got AMEX and Citicorp to change their errors after they refused. The leverage is with the creditors and using small claims court gets their attention every time and is very inexpensive: http://disputeyourcreditreport.us/ebook

JCitizen
JCitizen

it was easier to clean up your report back in the 90's. All it took was a call to Experian, and everything went back to a clean slate. I had three errors on various reports back then. Once I corrected my report with one agency, the other two followed; but then computer data was coming on line as a ubiquitous service at the time. It seems they didn't want to be regulated back then, and took particular effort to listen to consumers - now it seems they could care less. One thing it for sure - most minor dings to your report drop off after 3 months if you keep your nose clean - higher level demerits can take six months to a year. I had made an agreement with my credit card company a few years back to end my debt with them - they agreed to a $4000 loss in a negotiated settlement. This has now dropped off my report after 10 years, which only said "closed by agreement". So most folks probably don't know they don't have to go bankrupt, and can save a lot of legal fees by simple talking to their vendor or creditors and keeping a good relationship and communication with them. This is still true. My credit report is squeaky clean now, and I find I have a lot of leeway despite having gone broke and lost my health at the time. Almost any bankruptcy drops off after 6 years providing you use your credit to re-establish your credit worthiness after legal proceedings. Back in 2005, the law read that bankruptcy could follow you the rest of your life, despite what the weasel lawyers tell you. Back then if you went bankrupt, it could affect your credit worthiness in purchasing life insurance, and also limit you in financing any real-estate over $75,000 of value. So going bankrupt should be a last resort if you are still young.

HAL 9000
HAL 9000

If you are a Celebrity you are generally speaking safer from this type of thing as you are better known and Red Flags are raised when there is suspicious activity. Being Joe/Joanne Public offers absolutely no security at all and makes it far more likely that you can be attacked in this way without much in the way of recourse to a easy solution. Col