Stolen Names, Big Numbers

American Demographics, Sept 1, 2004 by David Myron

Interestingly, nonwhites reported a slightly higher rate of victimization - 16 percent - compared with whites at 12 percent, which naturally yields greater fear levels. Nonwhite victims (53 percent) are more likely than their white counterparts (40 percent) to be concerned about future acts of misuse by an identity thief. And lower-income victims were most likely to express concern about being swindled again: 60 percent of victims whose household incomes were less than $25,000 said they were at least "somewhat" concerned.

FIGHTING BACK

So what can companies do to allay consumer concerns? Gaining consumer trust has become a significant issue, especially for online retailers and financial services firms. Companies will go to great lengths to build or rebuild consumer trust. Citibank did this with its recent spate of identity theft television commercials. One jarring commercial shows an elderly woman cleaning her backyard pool, bragging in a Southern male voice about illegally purchasing a pickup truck and "mud flaps with them naked ladies on 'em." Another ad shows a portly middle-aged man sitting at home, watching a bowling match on television, beer in hand, and describing (in the voice of a vibrant young woman) his latest unauthorized purchases, particularly the leather bustier that "lifts and separates." Yet another ad shows a young, trendy, African American woman describing in a male teen's voice how she's going to buy parts for "my robot ... my girl robot." Clearly, these people pictured didn't authorize these purchases. Instead, we are informed the subjects were all victims of identity theft, but in the end, Citibank assures viewers that their money is protected. Knowing, for example, that Citibank accounts are FDIC insured gives consumers some measure of protection if something should go wrong. "That gives consumers a much better basis to continue to extend their trust to companies than when consumers don't have any recourse," says Glover T. Ferguson, chief scientist at Accenture.

Still, winning the hearts of consumers through promises of protection is not enough. Businesses cannot afford to ignore fraudsters and identity thieves, because, as Higgins says, the cost of doing business will likely increase if these crimes don't subside. The challenge, though, is staying ahead of the criminals. As new approaches to fraud and identity theft surface, corporations are finding it increasingly difficult to keep on top of them. "Most vulnerability researchers are saying we're approaching a zero-day vulnerability where we'll have no ability to respond to security threats," says Fred Rica, a director at consulting services firm PricewaterhouseCoopers. One overwhelming trend among fraudsters, Higgins warns, is a tactic called "phishing," where an e-mail is sent to unsuspecting consumers to log in to a bogus Web site that looks exactly like the legitimate site where the consumer is asked to enter banking or other personal information. Already, companies such as MasterCard and eBay, Higgins says, are partnering with Internet watchdogs that sniff out fake Web sites and notifies all banks affected by the scam within four hours.