[Moderator: New 'zine dealing with electronic identity fraud. Subscription info is in the 'Introduction'. I will probably not forward future copies to ISN.] From: Edentificat_private ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| | E L E C T R O N I C I D E N T I T Y F R A U D Issue 1 Oct 25, 1998 ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| | from e-DENTIFICATION LLC voice 717 859 2430 fax 717 627 5454 email EDENTIFICAt_private INTRODUCTION ============== Welcome to the introductory issue of this newsletter. If you are involved in .....electronic commerce.....electronic data interchange.....credit management.....security.....banking.....internet business.....you and your associates are invited to subscribe. Just send an email to: ZRZZ31At_private WHY THIS NEWSLETTER ====================== The motivation for this newsletter is to share information about the growing problem of identity fraud. I hope that by providing a forum for sharing news, analysis and the early identification of emerging problems and trends in identity fraud, we can all become better equipped to fight this sneaky and costly crime. Unfortunately, in many areas identity fraud is not acknowledged, is not treated as a crime and is rarely prosecuted. WHO AM I ? ========== My background as an attorney led me into the problems of identity fraud which in turn led me to start a company called NBIB Inc. This company developed a system that has been used by 17,000 banks to screen new accounts to detect identity fraud. The growth of electronic commerce creates a new situation in which business is being conducted between remote parties. These parties have never met and therefore, substantial losses could be incurred by parties dealing with fraudsters using fake identities. This problem generated a solution that is addressed by my new company e-DENTIFICATION LLC, which developed a system for companies engaged in electronic commerce to confirm the identity of their remote and unseen customers. DEFINE OUR FIELD OF INTEREST ============================= Let’s whittle the crime scene down to our field of interest. We are not interested in crime in general, not in crime against persons, nor in crime against property where there was a face to face confrontation....such as robbery, burglary and embezzlement. We are concerned with the new field of electronic fraud where the message is conveyed electronically and where the opposing sides are remote and communicate only through electronic means. ELECTRONIC FRAUD =================== Recognizing that a digital identity is the key to the net worth of the individual, it has become an attractive target for criminal activity. I would offer the following quotation from Senator John Kerry to suggest the capabilities of the criminals involved in identity fraud: "Today's transnational criminal cartels use high-speed modems and encrypted faxes. They buy jet airplanes three and four at a time and even have stealth-like submersibles in their armadas. They hire the finest minds to devise encryption systems and provide the complex accounting procedures any multi-billion-dollar empire requires. They engage the ablest lawyers to defend them, the craftiest spin doctors to spiff their images in the media, the most persistent--and generous--lobbyists to influence legislative decisions. They retain retired intelligence officers from the world's best secret services to consult with them on security. Highly educated and well-trained scientists ensure quality control in the production of narcotics...." quoted from Senator John Kerry in The New War, 1997, Simon & Schuster PROSECUTING WHITE COLLAR CRIME ================================== When I was a practicing attorney, I had a senior prosecutor in one of America's largest cities tell me that, as a matter of policy, they did not prosecute white collar crime. To look to government for the solutions to this problem is to neglect the possibility of the best solutions. Self-help within the industry and among the individuals most affected is likely to yield better results. However, in order to help ourselves we must become better informed about the problem. This is the mission I have established for myself and this newsletter is one means of accomplishing that mission. IDENTITY FRAUD =============== In each issue, I will try to identify at least one aspect of identity fraud for all of us to think about. The first aspect I would like all of us to consider is how we treat digital identities verses real or biologic identities (the one our mother's used in recognizing us). There is a recent television commercial that clearly illustrates the current status of digital identities verses biologic identities. In this commercial famous people are recognized with their celebrity status until they try to cash a check. Then their biologic identity is denied and only the digital identity of a credit cared will suffice. While somewhat humorous, this commercial accurately portrays the situation in the world today. There is an almost irrebuttable presumption in favor of digital identities over biologic ones. The reason for this is the convenience of processing billions of transactions using digital identities over biologic ones, transcends the risks of fraud. DIFFICULT TO DETECT ==================== However, the risks of fraud are increasing. It is impossible to alter a biologic identity and simple to alter a digital one. Further, it is very difficult to detect an altered digital identity. In fact, if the legitimate and altered digital identities are placed side by side it is impossible to tell which is which without additional information. One set of ones and zeros (which comprise the digital identity) look just like another. The criminals who practice identity fraud recognize this problem and alter digital identities by the hundreds of thousands. In one sense this problem was created when our digital identities assumed an existence separate from our biologic identities. The solution to the problem of favoring the digital identity over the biologic one can be effectively addressed by marrying our digital identities with our biologic identities. This will be a continuing thread in this newsletter. RECAP ====== I will work to keep this newsletter brief and breezy and publish it more often rather than creating a tome that comes out less often and intimidates my readers by its length. Other features I will include in the future will be synopsis of news items and I will try to offer reviews of current and pertinent literature that sheds light on the problem of Electronic Identity Fraud. I welcome your suggestions. John F. Ellingson, Madison, WI - Principal e-DENTIFICATION, LLC voice 717 859 2430 fax 717 627 5454 personal email address: JohnE37179 @ aol.com ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| IDENTITY THEFT TO BE FEDERAL CRIME |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| New legislation would make it a federal crime to assume someone's identity to commit financial fraud. Legislation has passed Congress and was sent to President Clinton. The crime of Identity theft is defined as the unauthorized use of a person's name, address, birth date, Social Security number and mother's maiden name to fraudulently obtain credit cards, loans, and open bank accounts. It does not cover electronic commerce fraud, but it is a start. Clinton will sign according to Sen. Patrick Leahy, D-Vt. who sponsored the bill. Victims of identity theft would be able to obtain restitution. The bill requires the FTC to establish a centralized complaints service. And equipment used in the crime would be forfeited. 40,000 people annually are estimated to have their identities stolen. ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| FINANCIAL FRAUD REPORT CENTER ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| A neighborhood watch program on cyberfraud was started by a state securities regulators' group. Program was announced by the North American Securities Administrators Assn. The address for reporting suspected Internet financial fraud is www.cyberfraud(at)nasaa.org. Complaints will be referred to the appropriate regulators and FTC. ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| -o- Subscribe: mail majordomot_private with "subscribe isn". Today's ISN Sponsor: Repent Security Incorporated [www.repsec.com]
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