Identity thieves have stolen the tax returns of 93 University of California, Irvine (UCI) students and up to 7,ooo students are at risk according to the Orange County Register. The identity theft ring was detected when several UCI students reported to campus police that their tax returns came back “already processed”. Now that has got to be an alarming and scary feeling to receive that notice from the IRS. UCI police are investigating but have not found the source of the leak. They believe the compromised data only affects graduate students who attended between 2004 and 2007. The State of California has since banned the use of Social Security Numbers as student identification.

Details of this particular crime remain sketchy though it is known that IRS investigators have become involved. It certainly appears that this is more than just one hacker, or one bad employee and that it likely has ties to an identity theft ring. Students are encouraged to process their returns immediately as that is the only way to know that their personal information has been used fraudulently with the IRS. Unfortunately, as with any data breach, the attack can happen tomorrow or 20 yeas later and can take many different forms. There are many steps one can take to protect their identity and their are many identity protection options that can be purchased through credit bureaus, insurance companies and identity protection companies such as Lifelock and Loudsiren but none of the available options could protect you from this particular crime. The best advice we can give is to file your return immediately if you haven’t already, keep your information up to date with the IRS and file your tax returns in the following years as early as possible. This is sound advice for anyone who has experienced a breach of their private records as the IRS does not check your credit report when authorizing your return and therefore will not be alerted by a fraud alert. Additionally, you should not give out your personal information to the IRS on the phone or by responding to an email. These are common scams.

To protect yourself from other forms of identity theft we strongly recommend that you place fraud alerts on your credit file and renew them every 90 days and order and examine your free annual credit report yearly. The good news for those students on a budget is that this can all be done for free. If you are barely making ends meet and living off Kraft Dinner (ah, those were the days) then you probably don’t need to be concerned with insurance or a guarantee that an identity protection service would provide. So take the initiative and protect your good name and credit today. If you don’t have the time, want the insurance or wont remember to renew your fraud alerts then consider utilizing a company like Lifelock, Loudsiren Debix, or TrustedId. They will take those necessary steps, give you insurance and/or a service guarantee and remove you from pre-approved credit card offers and junk mail lists as well. Each service also has other value added options that may interest you. There are other less effective options such as credit monitoring, or more restrictive options such as credit freezes that are available for a fee as well. The only decision you will truly regret is the decision to do nothing. As we have mentioned many times we strongly recommend fraud alerts but we do realize that this is not the right choice for everybody. What is most important is that you do something because any action that reduces your chances of becoming an identity theft victim is a good action to take. What are you waiting for? Protect yourself now!

LifeLock’s grassroots campaign, Strike Back - Defeat Identity Theft Now, came to an end in Washington, D.C. on March 6, 2008 with the handing over of a petition that was collected along the tour and at their website www.LifeLock.com. The campaign and petition was designed to bring awareness to the crime of identity theft and in particular asked for 8 issues to be addressed by our political leaders. Identity Theft Labs decided to weigh in on the issues brought forth by Life Lock and on their comments that were published at Lifelock.com. Here is part 1 which addresses the first four issues.

1. Limit the use of the social security number
   
   LifeLock

   A law should be passed that would cut back on social security number usage. Though companies and organizations have started changing to ID numbers, the social security number is still part of many current and past records. These numbers must be minimally used and strongly protected.

   Identity Theft Labs
   
   We agree but want to point out that though this seems very simple it is actually a complex issue that will be difficult to implement and enforce. In fact with the amount of social security numbers exposed already it may be a better solution to implement a new National ID to replace the old SSN. We advocate for the research and debate of both options.

2. Stronger federal standards for lost or stolen data
   
   LifeLock.com

   The Data Accountability and Trust Act needs to be revised, making companies and financial institutions more accountable. Currently there is no reporting law for all 50 states. In other words, if a company or organization loses your information, they may not have to tell you about it, depending on where you live. Since January 2005, more than 225 million Americans have received notification that their personal information has been lost or stolen (more than 80,000 people a day). What would this number be if everyone who lost information had to report it?

   Identity Theft Labs
   
   Excellent point and one we have made before as well. First we need national reporting legislation, people need to be informed when their private records are compromised. After this it is important to pass legislation requiring anyone holding consumers sensitive information to adhere to minimal security protocols, procedures and regulations in regards to the acquisition, retention, distribution and storage of this personal data. Those that fail to meet minimal standards need to be held accountable.

3. Impose prison sentences
   
   LifeLock

   A recent survey showed that 1 in 700 criminals never get prosecuted for this crime. Criminals know that this is a low-risk, high-reward crime, so why stop doing it? Law enforcement is doing the best it can to keep up with the growing number of complaints, but when criminals get handed probation after their arrest, they just go back to doing it again. Tougher sentences are needed to send a message that stealing personal information is the same as stealing a car, breaking into a house or robbing a bank.

   Identity Theft Labs
   
   Headway has been made in this area but so much work needs to be done. Increased prison sentences is a deterrent but we also need to train our officers on identity theft so that they can effectively deal with this epidemic.

4. Credit bureaus need to be user friendly
   
   LifeLock.com

   Anyone who has ever tried to fix a problem with a credit report will understand why it needs to be an easier task. If you have been a victim of identity theft, all fraudulent accounts should be cleared on that report immediately. Someone who is or has been a victim of identity theft should not have to pay penalties or pay for losses financially or reputably.

   Identity Theft Labs
   
   We agree, clearing your credit report should not be the daunting task it currently is with the credit bureaus. Unfortunately it is not in the bureaus best interest to have your report cleared expeditiously and it is difficult for them to sort out the facts from the potential fraud. A completed investigation by an authorized authority that states a person was a victim of identity theft should mean the immediate clearing of their credit report. A simple identity theft report should flag the credit report and not negatively affect a credit score.

Each is an important issue, and though some need research and debate as we pointed out, others only need legislation that will hold people, companies and institutions accountable for their actions or lack thereof. Identity theft can be a devastating experience to the individual and their families and it is costing our economy so much that it is hurting all Americans. Our legislation has to protect individuals, deter criminals, hold the appropriate parties accountable and soften the blow experienced by identity theft victims. To do this we need to bring identity theft to the forefront of the American conscience and LifeLock took an important step in this regard. We will examine the other issues raised by LifeLock shortly but hope for now that we have given you something to think about, discuss and recommend to your elected officials.

Learn more at LifeLock.com, read our LifeLock Review or see what LifeLock’s identity theft protection services can do for you on our handy chart.

LifeLock has been sued by Experian a London, England based corporation who is one of the big three American credit bureaus. Experian is alleging that the service provided by LifeLock violates the Fair and Accurate Credit Transactions (FACT) Act passed by Congress in 2003. The FACT Act states a fraud alert can be placed

“by a consumer, or an individual acting on behalf of or as a personal representative of a consumer, who asserts in good faith a suspicion that the consumer has been or is about to become a victim of identity theft.”

Experian is alleging that LifeLock’s Identity Theft Protection Service has no right to place fraud alerts on behalf of consumers as they are not an individual. Furthermore, they allege that Life Locks perpetual renewing of the fraud alert and in some cases their initial placing of the fraud alert violates the condition that a reasonable suspicion of being or becoming an identity theft victim must exist. We believe that 210 million exposed personal records in the last three years and over 20 million identity theft victims gives every American a reasonable suspicion. LifeLock CEO Todd Davis called the lawsuit baseless and felt that Experian was reacting to Lifelock’s success in penetrating their market and challenging their business model. Experian also points out in the lawsuit that fraud alerts only protect you from financial identity theft and don’t do anything to protect you from other types such as employment fraud. Do they not realize that people know this and that the fact someone is already using your SSN for employment gives you another reason to believe you might become a victim of financial fraud. Also the part about a perpetual renewal being illegal is nonsense, how can anyone know that they are going to become an identity theft victim within 90 days or not at all. The fact of the matter is that fraud alerts prevent credit bureaus from providing open access to your credit information and limits their ability to sell your information which is one of their main sources of income. This lawsuit is all about money and Experian would be the last company looking out for consumer interests.

Like a typical lawsuit Experian alleges everything else under the sun including misleading advertising and that LifeLock is not open about the fact that fraud alerts can be placed for free at any of the credit bureaus. Besides Identity Theft Labs, LifeLock.com is one of the only websites we know of that actually does say that you can place fraud alerts for free. We also found the misleading advertising accusation comical since it comes from a company who was mandated by Congress to provide free credit reports in an open manner and yet they own and run a website at www.freecreditreport.com that competes with the legitimate website www.annualcreditrepot.com. They advertised on the radio, T.V. and in newspapers not the legitimate site but their competing one. Their competing website then illegally enrolled consumers automatically in to a $80.00 credit monitoring package. Eventually the FTC put an end to this practice and charges were settled with Experian paying $950,000. Speaking of the FTC it is important to note that they have not said anything about the placing of fraud alerts by LifeLock, or any other identity prevention company, even though it falls within their mandate to do so.

Another interesting point is that Experian sued LifeLock but none of the other identity theft protection companies. LoudSiren, Debix, TrustedID, Identity Guard and about a half dozen other companies all provide the same fraud alerts on behalf of consumers. Do they have separate deals with Experian or is Experian just targeting the market leader and hoping the other identity protection companies will fall in line. We believe it is the latter. Experian hopes to use the LifeLock lawsuit to cut a deal and receive compensation for their role in placing fraud alerts. They will then use that deal as the basis for future deals with LoudSiren, Debix, TrustedId and the rest. Even if Experian were to win a legal battle against LifeLock it is likely the Government will step in and allow them to continue placing fraud alerts because consumers are demanding that this service be allowed. The old draconian days of the credit bureaus having complete control over our information is over. The Fact Act was passed because Congressman realized that the old system did not work and that identity theft had become to big a concern to ignore. They put some power back in consumers hands, giving us some measure of control over our credit and personal information, and regardless of how we execute this control, whether it be by ourselves or through an identity protection service, it will be difficult to take this away. Over one million Americans are already enrolled in identity protection plans provided by LifeLock and their competitors, and at least another million will enroll before a lawsuit is settled, so it is very unlikely that Congress would go against the wishes of that many voters. We advise consumers to protect their identity and credit using whatever means and/or service they prefer and to leave the legal posturing to the lawyers. Furthermore, we invite you to visit LifeLock.com to verify how open they are about the services they provide to consumers.

Horizon Blue Cross Blue Shield and Davidson Companies Expose over half a Million in Final Days.

After a record number of data breaches in 2007 one would think tighter security would become a priority in 2008 but the first month showed no signs of this. Though, on average, there was a breach every day in January many seemed small in nature until the end of the month which closed with a bang led by large breaches at Horizon Blue Cross Blue Shield and Davidson Companies. A hacker tapped in to Davidson Companies database and stole the personal information of 226,000 clients of the financial services company. The personal information included names, addresses, SSN’s, bank account numbers and balances. Horizon Blue Cross Blue Shield also reported at the end of the month that a stolen laptop contained private information including social security numbers on over 300,000 clients. Large breaches earlier in the month occurred when online store Geeks.com was hacked (unknown number), GE Money lost the records of 150,000 on a backup tape, and the Wisconsin Department of Health and Family Services used a vendor who printed the SSN’s of 260,000 people on the outside of an envelope they mailed. Universities continued their poor streak with 10 reporting breaches in January the largest coming from Georgetown University in Washington, DC who had a hard drive, containing the SSN’s of 38,000 students, alumni and employees, stolen. If January is any indication it looks like 2008 is going to be another bad year for data breaches.

Another breach of note occurred at OmniAmerican Bank who was hacked by an international gang of hackers who stole account numbers, created new PIN’s and debit cards and then withdrew cash from ATM’s all over the world including New York. The Bank was on to these criminals quickly and mitigated the loss to about 100 clients by shutting everyone’s bank account down. This is of particular interest however because it showed the vast network of these criminal gangs and the speed at which they can work. Withdraws were done all over Eastern Europe, Russia, Ukraine, Canada, Britain as well as in New York. We at Identity Theft Labs have been saying for awhile now that there are large professional gangs both inside and outside the US who are targeting Americans and this was just another example of what we already knew. It is unfortunate but apparent that our personal information can not be held securely and that it is being used against us. This is why it has become essential to take the necessary steps to protect yourself from identity theft and to include some form of insurance in your identity protection plan. The reason Lifelock, Loudsiren and TrustedID are growing so quickly is that many Americans have realized this, though it is far from mainstream. This is why identity theft education is so important. Far too many Americans are sitting back thinking that identity theft won’t happen to them, thinking that they never had to purchase identity insurance before so why should they do it now. Quite simply its a different world than what we grew up in and insurance no matter whether its life, fire, car or whatever always feels like a waste of money until it happens to you. The fact of the matter is that we can’t afford to not protect ourselves. So get out there and buy a cross cut shredder, place those fraud alerts at the three credit bureaus, remove yourself from pre-approved credit card offers, order your free credit reports and buy some identity insurance. It simply needs to be done. If your not going to do this yourself then look in to the identity protection services from LifeLock, LoudSiren or anyone else and have them take all these steps on your behalf. In three minutes you can have the peace of mind that their insurance or service guarantee provides, and the most effective identity protection plan on the market today. Trust me its worth it.

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LifeLock continues to impress. Today LifeLock’s CEO Todd Davis rolled out another marketing win. PostalAnnex+ has over 300 retail outlets nationwide that will now offer LifeLock Identity Theft Protection Service as part of their portfolio.

First news of the announcement was posted on BusinessWire.com earlier today. The most interesting part of the press release is some of the Identity Theft statistics that are called out. Some are a bit dated, but still relevant -this section especially:

In February, the Federal Trade Commission released its annual report highlighting that for the seventh consecutive year, identity theft tops the list of consumer complaints. In 2006, identity theft cost Americans $1.1 billion dollars, the highest amount ever. A multi-billion dollar crime, identity theft is non-discriminatory, hitting Americans in every age range from infants to seniors. Since January 2005, more than 110 million Americans have received letters notifying them that their personal information has been lost or stolen.

We checked the PostalAnnex+ site and have not found any additional details. As far as we know the LifeLock Discount we offer at IdentityTheftLabs.com is still the best.

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For months we have been hearing about LifeLock’s $1 Million guarantee. Recently, Debix and LoudSiren have stepped up to address this for all of their customers. The new updates are impressive, clearly meant to match and then exceed the LifeLock offering.

The LoudSiren (Powered by Debix) plan now offers the following protections should you ever have a identity theft issue:

1. A $25,000 AIG Personal Internet & Identity Coverage policy.
2. Additional $1 Million dollar guarantee.

All the details are available at LoudSiren.com.

This is another case where LifeLock’s commitment to high end consumer direct marketing has resulted in better programs for consumers. Regardless of which program you choose these guarantees and insurance plans should more than cover you in the remote possibility that you become a victim of identity theft while enrolled in one of these identity protection plans.

It will be interesting to see if LifeLock will add an insurance program to their current guarantee.

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Correspondent Lesley Stahl on CBS 60 Minutes reminds us yet again how easily our identities are compromised.
In her report Stahl focuses on the T.J. Maxx breach that happened over a year ago, which is not news. The real news is that her reports indicate that hackers can collect and sell personal identity information as easily today as back in 2005!

The article and videos are well done and worth a review, even if just as a reminder to use caution during this high volume shopping season.

We would reiterate our fairly simple plan to reduce your risk:

1. Get identity theft protection from LoudSiren (Debix) or LifeLock

2. Protect your personal information from prying eyes

3. Avoid the use of debit cards because most lack fraud protection

There is much more information on this site, our recent post about online shopping tips is a good place to start, but these simple steps will go a long way.

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Internet identity theft is growing at least as fast as internet shopping. A few Billion dollars will be spent online in November and December alone. Alone the way, thousands will become victims of identity theft. The FTC estimates over 9 million were affected in 2006.

Sounds frightening - but with a few simple precautions you can greatly reduce both the likelihood of having your ID stolen while online, and the impact if your ID is somehow compromised. This list could be longer, but here’s what we call “the critical list“, things you really should address before you dive into your holiday shopping:

• Use Credit Cards rather than Debit Cards for online shopping: Debit cards have fewer consumer protections and also lack charge-back rights which can be critical if you have problems returning a purchase.
• Watch your Ids and Passwords closely: This is common knowledge that is even more critical during this busy season. Do not use the same ID and Password for all of your accounts and memberships and be careful where you write these down.
• Watch for spoofing/phishing type emails: Banks, Credit card Companies, and Credit Unions never send out emails asking you to enter (or reenter) all of your personal information or account numbers. Yet millions will get emails asking for these details, these are all junk! Never respond to these email requests. If you have any doubt about a email (they look official on purpose), simply call your financial institution.
• Shop with merchants you know: It’s fun to Google around for the absolute best deal. However, by sticking with merchants you know and trust, your chances of having problems is much less. You may try asking a familiar merchant to match an online deal you found elsewhere, many will match the offer.
• Identity Theft Protection Plans: Having LifeLock or LoudSiren coverage will stop anyone from opening new lines of credit in your name. With our 10% discount the coverage will cost less than many of the gifts you’ll buy, and it will last all year.
• Keep Detailed Records: This is a tough one for many of us, but the dividends can be huge. Keep your receipts and make notes of the items you buy. This will help in the event you need to return something and also makes it much easier to reconcile your accounts and quickly notice any suspicious activity.

Shopping online is fun, time saving, and often a great way to save money. The simple steps listed here will allow you to safely shop from the comfort of your home with little worry about internet thieves and unscrupulous merchants.

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The process of recovering from an identity theft is estimated by the FTC at about six months and 200 hours of work. Most of the workload revolves around making certain you are not held responsible for the debt incurred by the theft.

But first of all, you have to know whether you’ve been victimized in the first place. In many cases, people find out about identity theft long after it occurs. It’s only when you finally get a bill or see a charge you know nothing about; the alarm bells start to go off.

The only practical way that you can get real time inquiry information is to place what are known as “fraud alerts” at all three of the major credit bureaus; Equifax, Experian, and TransUnion.

It is possible to do this yourself, we discussed the process here, or you can hire a company to place and maintain the fraud alerts on your behalf. One way or the other be sure your file is on alert.

The FACT Act of 2003 was designed to approach identity theft proactively, so as to prevent theft rather than clean up after it, in the following way. If you believe you are at risk for identity theft, you may place one of these alerts on your credit files at all three bureaus. LifeLock and LoudSiren have built their businesses around the provisions outlined in the FACT Act.

It is far better advised to understand what options are available to prevent your identity from theft, than to go through the experience. Psychology shows that we are more energetic in trying to recover losses than we are in preventing them. If you doubt that, look at how many personal injury attorneys are in your phone book.

Buck the trend and be just a little proactive. Taking 5 minutes now to get yourself and your loved ones registered could save you a cool 200 hours. It’s easy and inexpensive to obtain identity theft protection and might be the best money you ever spend.

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Approximately 75% of personal net worth in America belongs to those over the age of fifty. It’s probably safe to assume that those of us over that age make the best and most lucrative targets for identity thieves. The famous bank robber Willie Sutton said the reason he robbed banks was because “that’s where the money is”. Identity thieves target older Americans for exactly the same reason.

If you have net worth, a little or a lot, these protection programs can really come in handy. As we grow older, we often become more set in our ways. We tend to be less risk tolerant, especially in areas related to finances. This is not bad; most financial advisors recommend this strategy.

Protecting your identity is another way of reducing risk, and increasing peace of mind. Going through a case of identity theft, and the related recovery process is even more difficult as we get older. It’s a major pain regardless of age, but doubly so for seniors. The mother of one of our colleagues experienced an identity theft at the age of 75. She had a hard time absorbing how this could happen and an even more difficult challenge getting it all straightened out.

Loud Siren Debix and LifeLock do not currently offer senior discounts. However, using the links on IdentityTheftLabs.com you will save 10% on either plan.

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