Online Billing: The Dangers of Identity Theft

The phrase "identity theft" causes a shiver to go up the spine and eyes to bug out with fear. True, identity theft happens today; however, not from the most commonly blamed source. In fact, identity theft is 10 to 1 more likely to happen from another source other than the source which is most commonly blamed. "What is the most common source for identity theft," you ask? Not from where you might think. Do a straw poll and ask your friends, neighbors and fellow countrymen. Ask them what is the most common source for identity theft, and answer they will...THE INTERNET! All I have to say is THEY ARE DEAD WRONG!. If not the internet then where is the most common source for identity theft? Before I answer let me share with you some interesting information about the internet, online billing and other transactions. Elliott C. McEntee, President and Chief Executive Officer of NACHA, said, "It is fine to use your checking account information on the Web or over the phone to pay bills or to pay companies you know and trust. But you should safeguard your checking account information, just as you would your address, phone number, Social Security number, and other account numbers." McEntee also noted, "Consumers have better protection with electronic payments than they do when using paper checks. There are federal regulations that provide consumers with substantial protection against unauthorized electronic debits to their checking accounts. There are no comparable federal regulations for checks." Noted e-commerce analyst James Van Dyke of Javelin Strategy & Research says that, counter to popularly held opinion; consumers that use online banking and bill payment services actually reduce their vulnerability to identity theft and unauthorized withdrawals. Javelin's number one consumer tip to protect against identity fraud is "Eliminate High-Risk Paper." According to Van Dyke, "Receiving and paying bills online helps prevent identity theft. By viewing and paying bills and statements online, consumers and businesses eliminate one of the most common means of identity theft-stealing personal information contained in bills, bank statements, and credit cards that are delivered to a person's mailbox, or in the signed, outgoing check used to pay the paper bill. The information can be more easily obtained in the physical world than via secure sites such as a bank's Web site." (Quoted from Javelin Strategy and Research news release of October 2, 2003.) You may say that this information is old and many more people are online today then when they were in 2003. Okay I will give that to you; however, take a look at this next quote. "Our numbers clarify four key misperceptions about identity fraud," says James Van Dyke, Javelin's founder and principal analyst, who oversaw the Identity Fraud Survey Report for the second consecutive year. "Most importantly, people are not helpless in protecting themselves from identity theft. Contrary to popular belief, consumers do not bear the brunt of financial losses from identity fraud, Internet use does not increase the risk of identity fraud; and that seniors are not the most frequent targets of fraud operators. Our findings will help people learn about specific important steps they can take to better protect themselves. (Javelin Strategy and Research 2006 Identity Fraud Survey Report)" So where then do identity thieves get their information? Following is what Javelin found: "Most data compromise - 90 percent - takes place through traditional offline channels and not via the Internet, when the victim can identify the source of data compromise.* "Lost or stolen wallets, checkbooks or credit cards continue to be the primary source of personal information theft when the victim can identify the source of data compromise. (30 percent).* "Almost half (47 percent) of all identity theft is perpetrated by friends, neighbors, in-home employees, family members or relatives - someone known - when the victim can identify the perpetrator of data compromise.** "Nearly 70 percent of consumers are shredding documents, so that trash as a source of data compromise is now less than 1 percent. (Javelin Strategy and Research 2006 Identity Fraud Survey Report) " A quick story... My father was the biggest opponent to online presentment and payment of bills. His main reason was the opportunity for someone to steal his identity. After several long conversations and pleadings for him to try online presentment and payment or EBPP he gave it a try. He is now singing the song of EBPP and telling everyone that they should get online billing solutions. He also sits on the board of a major bank and has been asking them to not only provide bill payment, but also bill presentment, by the way, my father is a baby boomer. So need you be concerned about theft of your identity from internet sources? I will let you look at the facts and answer yourself, but if I were you I would be more concerned about where you put your wallet and who in your family has access to it. By the way . . . have you seen my car keys?