While everyone sues TJX, the criminals are laughing all the way to the bank

Here is a great example of why there is so much identity theft. In Ontario, a man and his wife went right back committing identity theft, while on bail for running a payment card (debit/credit card) skimming operation. As you will see, they were by no means, small operators.

From newsregiondurham.com, Jeff Mitchell reports:

Hundreds of new charges have been laid against a fraud suspect and his wife after Durham cops busted the two as they allegedly broke his bail conditions.

Police say they found evidence of widespread fraud when they searched the King City home of the man, arrested here last fall in connection with a credit and debit card skimming operation at a north Oshawa gas bar.

One fraud investigator said lists of debit and credit card numbers found in the home amounted to "an encyclopedia" of apparently stolen data.

Here is what they got caught with, while on bail for victimizing (probably) thousands of people:

During the arrest both occupants of the car were found to have counterfeit credit cards in their possession, police said. A subsequent search of their home resulted in the seizure of credit card writing equipment, 200 phoney credit cards and hundreds of pages of credit and debit card data, police said.

Police also seized the BMW, claiming it's proceeds of crime.

I guess no one figured out the BMW was paid for by theft, the first time around?

And meanwhile, lawyers and the banking industry are organizing law suits against TJX for their recent data breach.

Unless, we start making it dangerous for the criminals to commit financial crimes, the problem will keep growing!

While a lot of people focus on civil remedies, the criminals are laughing all the way to the bank. After all, they aren't being sued. AND the sad truth is that not very many of them are being caught.

The costs of litigation and fraud are both normally passed on to the consumer. Simple economics dictates that if they were not, the business would cease to exist. The fact that the banking industry (which could also be criticized for enabling some of this problem) is behind some of this litigation, bothers me!

Someone once said, "it isn't wise to throw stones when you live in a glass house."

Maybe I should do a few posts about how the banking industry makes it too easy to commit some of these crimes? For starters, we could discuss how easy it has become to counterfeit their payment devices, which is how the information is being turned into cash (what the criminals are after). We could also discuss how little they do to verify information, when issuing a credit card and all the unsolicited offers for credit (which are routinely stolen) out of the mail.

Thinking of that, I did a post about how easily criminals can manipulate this:

Ever wonder how well you are protected from credit card fraud?

Another thing to consider is that merchants already bear a lot of the cost of fraud becaue of chargebacks. This is where the bank charges back the fraud to the merchant. Many merchants feel strongly that they are already bearing the brunt of paying for all the fraud because of this practice.

For more information on this subject, visit Merchant911.org, here.

There is no doubt that the true victims of identity theft deserve compensation, but to me some of this litigation is designed (my emphasis) to pass the buck. As I stated earlier, when the buck is passed, it gets charged to the consumer (in the end), anyway.

When is someone going to start addressing the real problem? The facts are that it's too easy to commit payment card fraud, not very many criminals are getting caught, and when they are -- the consequences are pretty minimal.

Full story from newregiondurham.com (about the crooks out committing crime on bail), here.

Did we waste too much time last week blaming TJX for the dark side of the Information Age?

With the (estimated) 45.7 million records being compromised in the TJX breach, everyone seems focused on placing blame on the retail industry.

We seem to quickly forget that others, including institutions of higher learning, the financial services sector and even the government have been compromised pretty frequently, also. And even though massive data-breaches facilitated by hackers makes good press, the truth is that information is stolen on a less newsworthy basis, daily.

Brad Dorfman (Reuters) might have put it all in perspective when he wrote:

Consumers who want to be sure about protecting their personal data and preventing identity theft might need to pay solely with cash, shun retailer loyalty programs and only make returns when they have a receipt.

They might also need to stop paying taxes, serving their country and getting an education (my emphasis).

Brad's story about why retailers are one (my emphasis) of the targets, here.

Meanwhile the retail and financial services industries seem on the verge of fighting a battle of who should be (financially) responsible for all of this. Of course in the bigger picture, I can think of a few other industries to push the blame towards, also.

We spend a lot of effort and resources trying to spread out the financial burden of information theft. While this might be enabling some of those concerned (industries starting to point fingers) to keep writing the costs of information theft off, it isn't stopping very many of the facilitators.

I sometimes wonder how much better we might be off if we went after the facilitators more aggressively? Resources to do this are minimal and if you don't believe me ask any victim, who tried to get something done with their individual case. Even better, ask someone who has the unfortunate job of trying to help some of these victims.

Until we make stealing information harder to do and start punishing the facilitators, problems associated with the dark side of the information age are probably going to continue have a ever growing financial burden.

In the criminal world, the 45.7 million compromised records, were yesterday's opportunity. What opportunity are they exploiting right now?