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?