What’s in store for 2011? More scams and identity theft

Unemployment, economic uncertainty and the proliferation of technology will be factors in emerging types of fraud over the next year, according to the 2011 Identity Theft Assistance Center Outlook.

Each year ITAC reviews events during the calendar year and surveys law enforcement, researchers and businesses about what we can anticipate over the next 12 months.

New social engineering scams. Criminals used various schemes to exploit consumer fear (your account has been compromised!); relationships (my passport and wallet were stolen, send money please!) and greed (you’ve won the lottery!) over the past year. The FBI’s Internet Crime Complaint Center (IC3) reports a recent sweepstakes scam that sends consumers emails and letters with fraudulent checks bearing the logos of financial services companies. Expect to see variations of these schemes in the coming year using every channel of communication, including text messages and phone calls.

New initiatives to fight fraud and identity theft. In the face of emerging threats, new collaborative projects are supplementing existing public-private partnerships and opening new fronts in the fight against identity theft. “We want consumers to understand that while there may be new scams, financial institutions and law enforcement are working together to curb these threats, and we encourage consumers to join the effort, to be aware, and to be cautious with their information,” said Leigh Williams, President of BITS, the technology policy division of The Financial Services Roundtable.

The wave of cyber crime will not recede. McAfee Labs, which tracks online threats, analyzed and cataloged more threats in the first three quarters of 2011 than in all other years combined and the growth in both volume and sophistication of malware and attacks shows no signs of slowing. Financial institutions also have escalated their efforts to address malware and other attack vectors, and improve the technical and human controls that mitigate these threats.

New forms of small business identity theft. Criminals view small business accounts as a lucrative funding source. The U.S. Postal Inspection Service reports a surge in criminal rings using small business information from stolen mail, check writing software and other tactics to counterfeit checks. They warn business owners not to leave mail unattended: leave it at the post office or give it to a postal employee.

Healthcare reform fraud and medical identity theft. Criminals will exploit fear and uncertainty about the implementation of national health care reform. Earlier this year, Health and Human Services (HHS) Secretary Kathleen Sebelius warned state insurance commissioners about new schemes to sell bogus insurance policies. Medical identity theft – using someone else’s identity to obtain medical services – increased in 2009 and, given high unemployment and the high cost of healthcare – consumers should anticipate seeing more of this crime.

Increase in ATM “skimming.” Security experts report a rise in skimming, a practice that often uses a fake card reader and camera installed on automated teller machines, or wireless technology. There were several skimming attacks in the US and Canada last summer and more attacks that exploit magnetic strip technology are expected.

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