Identity Theft is a Pervasive Problem Costing Billions. Protect Yourself @McAfeeConsumer

We're taking a look at identity theft and take a look at some staggering statistics, and hopefully they haven't happened to you. Almost 11,000 Canadians filed for identity fraud reports in 2010, a total loss of $10 million from identity theft. Now, 1 in 6 people in Canada have been victims of identity theft, and payment card fraud— that could be debit or credit card— is the most commonly reported. Now, I spoke with an identity theft expert, Robert Siciliano, but how to best protect yourself. And I asked him, what is the most common way that your identity can be stolen online?

Well, the internet certainly is convenient, but it also can be dangerous, especially as far as your identity is concerned. Once the bad guy gets your personal identifying information, such as your usernames and passwords, they can take over existing accounts. If they get additional personal information like name, address, and Social Security number, they can open up new accounts under your name.

Hmm. So, but again, how do they, how do they find out that initial piece of information? How do they get people's usernames and passwords?

Often it is the person's own PC that is compromised. They might have outdated or non-existent antivirus programs. They might have spyware or viruses on their machines that allow the bad guy to remotely access and control their computer, which gives them full access to the documents on their machine also is able to record each website they go to and then thereby the usernames and passwords.

Okay, so let's say that they, they got my information, they got my username, my password, they get the, the rest of the information they're looking for. What do they do with it? I mean, do they go out and use my credit card number, or are they selling it on to somebody else?

The bad guys will take your information and they'll either broker it, which means they'll sell it to another bad guy who will then go ahead and use it and open up new accounts under your name, like new credit cards, new bank accounts, get new loans under your name. Or they'll take over existing accounts, like if they get your existing credit card number with expiration date, or even your existing bank account information, username and password and access to your account, then they just begin to funnel money out of your existing accounts.

How common is this?

Well, unfortunately, identity theft itself, in the US at least, is a $50 billion a year problem. It's approaching a trillion dollars in losses for consumers, businesses, and governments worldwide.

Hm. I was speaking with somebody earlier who said really the only truly safe way to deal with that kind of thing online is just simply to not have any information online.

You see, it is a myth that if you don't have your information, say, on a computer or online, that your identity won't be stolen. The mere fact is we live in what's called a database society. And in a database society, your information isn't just on one database. It's on hundreds, maybe even thousands. So while you may be secure, it's the people that you do business with, the companies you do business with, the utilities, the government agencies, some of the vendors you might have, that sometimes they are compromised.

Hmm, so you're saying even if I've just given information to a vendor, not online, but just given it to them, their databases can be hacked basically?

Well, chances are if you're giving your information to, say, a phone company, More than likely, that information is stored in a database, an electronic database opposed to a filing cabinet, and that electronic database in one way, shape, or form can be hacked, whether from the inside or from the outside.

So how do you protect yourself if you can't even control the information you give out?

So first and foremost, as far as protecting yourself goes, you gotta lock down your own data on your own PC. That means antivirus, anti-spyware, anti-phishing, being smart about the different scams, knowing what your options are and how to protect yourself there. And then of course investing in things like identity theft protection and something called a credit freeze. By getting identity theft protection and a credit freeze, you can lock down your Social Security or social insurance number in a way that prevents the bad guy from opening up new accounts under your name.

And where do you get that kind of stuff from?

Well, you do some searches online to do credit freezes or identity theft protection. And for antivirus, you go for a big paid antivirus. I prefer McAfee antivirus.

Let me ask you, um, credit card fraud is still the number one kind of fraud that is reported. If I have decided that I do want to shop and I do want to shop online, is there any way to do it in a way that I'm best protected?

So I am not worried about credit card fraud. I use my credit cards all the time online, over the phone. I hand it over to waiter, waitresses, gas station attendants, and I pay very close attention to my credit card statements, and I refute any unauthorized charges within a 30 to 60-day period of time. Beyond that, whenever you use your credit card online, make sure that in the address bar where it says HTTP, it says HTTPS. That means it's a secure site. If you enter credit card information into an unsecured site, that online portal, that website, isn't doing their job to protect your data.

What about kids? I mean, kids are online, constantly online, mobile, uh, they're playing games online. How vulnerable are they, and in turn, how vulnerable are their parents?

Well, children are going to places on the web where they probably shouldn't. They're gaming overseas, they're downloading software that may infect the parent's PC, compromising the family's information. It's very important to set up on your own home PC different settings so that the kids can't download stuff without the parents' knowledge, that you restrict any administrative rights so that it restricts their access, restricts the information, and again, the programs that they can download. You can monitor the children's activity on the computer. You can put software that allows you to actually monitor their behavior, their habits, where they're going, restrict certain access, making sure that they can't just go ahead and download anything and everything infecting your PC.

And what about GPS? I mean, so many of the apps that are on iPhone now, or Facebook, those kinds of things ask you to say where you are at all times. When you give away that kind of information, um, great for marketers, but who else could use it in a bad way?

Location-based services on social media, on your mobile phone, They make me a little nervous. I don't have them turned on in my mobile. I don't recommend that they— you have it turned on for yours or for your kids for that matter. They're only good for locating your device if it's lost or stolen. Other than that, when you're checking in at different places where you are, basically it's telling the bad guy where you aren't, and that might be your home, giving them an opportunity to break into it or even stalk you in certain situations.

What if you find you've done the best you can, but despite it all you've been a victim of identity theft? What do you do?

Well, in Canada, you want to contact your local government agencies responsible for mitigating that fraud. In the US, you want to contact the Federal Trade Commission, the Post Office, the Social Security Administration, even your local police, no matter where you are, and file police reports. And then from there, you want to contact each of the agencies or each of the creditors where credit has been opened up under your name or accounts have been taken over and refute any unauthorized charges.

Robert, great to have you with us. Thanks so much.

Thank you so much.

And that was Robert Siciliano with McAfee. He's a consultant and identity theft expert.