Equifax 2017. Marriott 2018. Capital One 2019.
Data breaches through hacking attacks are distressingly common these days, and personal details about victims can lead to identity theft, such as credit cards and loans in a victim’s name. But it’s hard to pin the blame on any specific hack, as the most sophisticated criminals combine data from multiple attacks to better impersonate their targets.
“That’s why fraud can be emotionally challenging,” said Kyle Marchini, a specialist in fraud management at the financial research group Javelin. “It just comes out of the blue, and there’s no way to identify where it came from or what I could have done to prevent that.”
While the number of reported breaches decreased slightly last year to 1,244, according to the nonprofit Identity Theft Resource Center, the total number of records exposed more than doubled to 447 million. That suggests hackers are focusing on larger organizations with bigger payoffs. Last year’s figures include data on about 383 million. Marriott guests in a breach that investigators suspect was tied to the Chinese government.
Criminal rings often buy datasets from multiple hacks to commit fraud. The idea is to collect enough information to get past ID verification and authentication checks that banks and other institutions employ. One database with your Social Security number might have your old address, but hackers can simply sub in your current one from a more recent database.
“We’re in this vicious cycle,” said Eva Velasquez, the ID theft center’s CEO. “We create and capture and use more and more data points about a specific individual in order to fight fraud and authenticate people. That, in turns, makes data more valuable to the thieves, so they are going to increase the efforts to get that data.”
Fraudulent card charges are relatively easy to reverse, and U.S. law limits credit card liability for consumers. But fraud involving new accounts is tougher to deal with.
Javelin estimates that the average victim spends 18 hours dealing with the fallout, including convincing collection agencies and credit-ratings agencies that the accounts weren’t really theirs. And victims wind up spending hundreds of dollars out of pocket. Javelin estimated that more than 3 million U.S. adults were victims of new account fraud last year, nearly triple the number in 2013.
Capital One recently disclosed a breach of personal information of 106 million Capital One credit card holders or applicants in the U.S. and Canada. The data included self-reported income, credit scores and account balances. Although Capital One said it doesn’t believe the information was used for fraud, the breach further increases worries about leaked data — in this case, the very types of information needed to submit credit card applications.
“Every breach increases the risk because different pieces of information come out,” said Deepak Patel, a vice president at the security firm PerimeterX.
Beyond financial applications, personal data can be useful for telemarketing and email phishing scams, as fraudsters try to trick victims by claiming they already know them. And criminals armed with such data can impersonate victims on calls with financial institutions to get money transferred or a mailing address changed.
