Organized Crime Attacks Medicare

Organized crime rings who normally deal in drugs, prostitution, and extortion are trying a new venture:  Medicare and Medicaid insurance fraud.  Identity theft plays a central role as scammers steal the identities of both doctors (to setup fake clinics) and patients (to bill the government).  These ethnic organized crime groups often target poor, elderly or otherwise disadvantaged folks who rely on government aid.  When offered a token payout (usually $100 or less) to come in for “treatment” these individuals comply – but rarely receive any sort of medical care even if they truly need it.  CNN posted this article about the problem recently.  How big is the problem?  This press release from the Office of the Inspector General for Health and Human Services indicates that it’s owed $2.4 billion for the first HALF of the fiscal year 2009.

CAIMR Releases First Annual Workshop Report

The Center for Applied Identity Management Research (CAIMR) released it’s first annual workshop report this month.  In the report, CAIMR determined that the United States has failed to stay ahead of the identity theft curve and the battle against identity crimes is currently being lost.  The report outlines an aggressive research agenda to identify and develop solutions to mitigate an expanding list of identity threats.

Launched in October 2008, CAIMR is a non-profit corporation comprised of thought leaders from government, corporate and academic organizations who share a common interest in the multi-faceted aspects and critical challenges of identity management. CAIMRs primary mission is to study identity issues impacting commerce, government, and national security, their social implications, and the processes, technologies and polices designed to deal with them. Most importantly, its applied research emphasis is focused on discovering real world solutions.  More info at http://caimr.indiana.edu.

Facebook Resurrects the 419 Scam

Facebook has allowed advanced fee fraudsters to deliver more personalized and targeted scam letters to their intended victims.  These so-called “419″ scams (named after the section of the Nigerian penal code for Obtaining Property by false pretences) gained popularity through the use of letters and then email.  More about the scam on Wikipedia.  It seems absurd that anyone would fall for early versions of the scam – as letters were often poorly written and obviously fraudulent.  Over the years, scammers became more creative and diligent in enhancing their work product and the letters became much more legitimate-looking, although the content of the letters often belied the scam to anyone who took the time to think about it.  

But now with Facebook, thieves have found a whole new way to target victims, using the technology against itself.  Social networks that allow users to added trusted friends as connections have an inherent vulnerability.  If someone hijacks an account, they can effectively insert themselves into communications with a very high level of trust and authority – at least for a short time until the ruse is uncovered.  MSNBC recently posted an example here.  Facebook users beware, and report your account if it becomes compromised.

PIN heads

A recent article in the Hartford Courant indicated that two dozen bank customers lost money after falling victim to a phishing attack where scammers sent email and text messages asking them for pin numbers associated with their debit cards.  The article suggests that the timing of the scam coincides with an announcement from a financial processing company that it’s data had been compromised.  It seems as if we’re not making much headway on the education of consumers about not responding to such obvious scams.

Credit Card Theft

I read an interesting post today about the black market costs of stolen credit and bank accounts.  It seems that the costs have been dropping lately, perhaps due to the flood of “vendors” in the market and what is perceived as a glut of supply.  This is scary for a number of reasons.  First, the apparent commoditization of this content – if legitimate – suggests that identity theft has risen to a new level.  Second, the fraudsters are so brazen as to post their pricing in open markets on the web.  Obviously, we have a lot of work to do.  Fortunately, organizations like the recently established Center for Applied Identity Management Research (CAIMR) and the Institute for Fraud Prevention (IFP) are working to bring more academic rigor to the areas of identity theft and fraud research.