Can We Count on Companies to Protect Our Credit Card Data?

On August 17, 2009 federal prosecutors charged Albert Gonzalez of Miami Florida, a former federal government informant, for allegedly stealing 130 million credit and debit card accounts. This was one of the largest know identity theft cases in US history. Gonzalez, the ring leader of an international team of thieves, has pleaded guilty to 19 counts of conspiracy, computer fraud, wire fraud, access device fraud, and aggravated identity theft of credit and debit card data from TJX (T.J. Maxx stores), BJ's Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority and several other prominent retailers. I have hyperlinked a couple of articles below to provide a summary of the situation and make some recommendations on how you can protect yourself from identity theft.

How did Albert Gonzalez (and his team of accomplices) do it? It was not complicated. Gonzalez and his team were accused of "wardriving" or hacking into unsecured wireless internet networks while driving by with a laptop and installing sniffer program to steal consumer data. Consumers implicitly place a lot of trust for credit card security upon retailers, particularly the large national retailers, when paying for that pair of jeans or the new tennis racket. But even the largest of retailers are finding it difficult to secure their data against hacker who get more creative by the day.

Every one of us is susceptible to identity theft. It was reported recently that Federal Reserve Chairman Ben Bernanke fell prey to identity thieves when a checkbook for a joint account with his wife was stolen from her purse. The thieves made off with $9,000. The Bernanke theft is the classic example of a "low-tech" physical theft but as more personal information becomes digital, there is an increase in the number of identity thefts by hackers breaking into computer servers.

So who is responsible for the protection of your data?

Experts agree that the responsibility falls on the companies where you use your card to keep it from falling into the hands of hackers who attempt to break into the companies' servers. You the consumer have a level of trust with the company and it is their duty to uphold this trust.

Since the Gonzalez case surfaced, state and federal agencies have proposed several new laws and legislation to better protect the consumer. For example, the Federal Trade Commission's Red Flags Rule will come into effect this November. This program requires certain companies and institutions to establish systems that will identity possible threats to consumer data. But the new proposed laws, regulations and programs can only go so far and there are things that you the consumer can do to ensure you don't fall victim to identity theft.
Here are a few recommendations:

1. Access your credit reports from the three major reporting agencies at least annually, if not quarterly. If there is information in your credit report that isn't accurate, get it corrected by disputing with the credit bureau, in writing, and also by contacting the financial institution who reported the data. If there are irregular patterns in your credit report keep a closer eye on them by signing up with the credit reporting agencies to get alerts every time there is a new entry in your report.

2. Spend a couple of minutes a day or every other day to check your credit and bank accounts.

3. Leave your Social Security card at home because if it falls into the wrong hands it could be used to open new credit accounts.

4. If you are getting rid of your old computer, make sure you remove the hard drive as hackers can still access data from it even though you have deleted it.

5. Photocopy your wallet's content so if stolen or lost you have a record of what's missing.

6. Protect your wireless internet modem with a password to keep others from accessing your data while you surf the net.

Identity theft unfortunately is a reality these days. I hope what I have written can help you protect against it.