10,000 identity fraud rings discovered in the Southeastern U.S.

Published: January 22, 2013 by Michael Bruemmer

When people hear “identity fraud,” they usually conjure up images of a lone hacker furtively typing on a laptop.  However the reality is identity theft is largely committed by identity fraud rings composed of two or more criminals actively working together.  Currently in the U.S., there are more than 10,000 identity fraud rings and unlike other types of organized crime and cyber security threats, most identity fraud rings are small groups made up of either career criminals or family members and friends. 

These rings target businesses such as credit cards, bank cards, and wireless services through bogus applications.  Wireless companies are especially vulnerable because they often offer free or discounted smartphones in return for a service contract.  These phones have a large resale value on the black market so con artists will advertise jobs for “mystery shoppers,” in order to obtain the phones.  The mystery shoppers are told they are hired to rate customer service and their shopping experience at a wireless carrier store.  The con artist will pay a shopper to use their personal information to open a wireless contract and once the shopper has been approved for a phone and contract, they turnover the device to the fraudster who assures them that the contract will then be cancelled.  In reality, the fraudster has no intention of cancelling or paying for the device so the business is out the value of the phone and the shopper is stuck with the collection notices.

Small business owners are especially attractive to identity thieves especially if the owner has good credit with a large credit limit available to them.  Many times, a forgery ring will simply steal the name and address of a business, pair it up with an account number stolen from another business and generate bogus checks.  The checks are used by all the members of the ring to buy merchandise such as expensive electronics which many times are then resold on the black market.  The cost of a data breach such as this may be seen as peanuts to a big company but can be a huge hit to a small business’ bottom line.

Clearly, business identity fraud is no longer the domain of the rogue computer geek.  It has grown at such alarming rates that it has become the new wave of organized crime, making the importance of obtaining protection from identity theft as vital as paying homage to the godfather.