Here’s a statistic that’ll get your attention!  285 million records were compromised in 2008 according to a new data breach study from Verizon Business.  The report claims that organized crime is responsible for a large increase in the number of breached corporate electronic records.

The report of industries affected by data breach shows that Financial Services was the major gainer in 2008.  That industry doubled its percentage of data breach to 30% while Retail is still the most affected industry (barely) at 31%. The shift to data breach in Financial Services will affect all of us more drastically.

According to the study, which Verizon Business compiled using data from the 90 confirmed corporate network breaches it recorded last year, roughly 93% of all records breached came from the financial sector. The company also says that nine out of every 10 of these breaches involved “groups identified by law enforcement as engaged in organized crime.” Verizon says that the 285 million electronic records breached last year were more than the total number of records breached in the past four years combined. The reason for the sharp increase is that attacks on financial firms’ networks have become more sophisticated and successful, the company says. Although only 17% of the attacks studied by Verizon constituted “highly sophisticated” data breaches, these attacks were responsible for 95% of all records breached. Verizon says that cybercriminals are targeting financial service companies’ networks to get customers’ personal identification number (PIN) information in order to withdraw cash directly from their accounts. Cybercriminals are also selling PIN information on the black market, the company says. Read the full report on data breach. (Scroll down when you see “285″). Technorati Profile

Are you one of the 9 million Americans who will have their credit damaged or their bank account emptied this year? Or perhaps your medical treatment will be affected. The cost of identity theft to individuals and businesses is staggering; hence, the Red Flag Rule, enforced by the FTC, federal bank regulatory agencies and the National Credit Union Administration.

There are always “red flags” that pop into our heads but too often we ignore them.  Call it “intuition” or whatever you want; the vital thing is to pay attention.  To that end, many businesses and organizations are now required to implement the “Red Flags” Rule to implement a written Identity Theft Prevention Program.  The goal is to detect warning signs in day-to-day operations, take steps to prevent the crime and limit any damage.

Are you covered by the Red Flags Rule? Read Fighting Fraud with the Red Flags Rule: A How-To Guide for Business to:

• Find out if the rule applies to your business or organization;
• Get practical tips on spotting the red flags of identity theft, taking steps to prevent the crime, and mitigating the damage it inflicts; and
• Learn how to put in place your written Identity Theft Prevention Program.

By identifying red flags in advance, you’ll be better equipped to spot suspicious patterns when they arise and take steps to prevent a red flag from escalating into a costly episode of identity theft.

In Parts I – III we talked about how easy it is for your child’s identity to be kidnapped and who does it; now let’s get to the heart of…

Protecting Your Children

Acting now on behalf of your child will protect them from consequences common to child victims:

• Starting adulthood with a credit rating low enough to scare away the hungriest of loan sharks
• Being denied a first loan, credit card or apartment rental because of a crime committed 10-15 years earlier (the passage of time makes this crime very hard to clear up)
• Being denied access to college or a new job
• Having a warrant out for her arrest for crimes that she didn’t commit

In the same way that you can’t protect your children from every bruise and scrape, you can’t entirely remove the risk of identity theft. You can, however, prevent or soften the fall if it does happen. Take these steps first:

1. Stop giving out your child’s personal information. Until you are confident that it is absolutely necessary to receive the services desired, withhold their personal information. More than 80% of organizations that ask for your child’s Social Security Number don’t actually need it to establish services. If you must give it, ask them how they will use it, how long they will keep it and how it will be protected while they have it. Vigilance is highly effective. Never carry your child’s SSN with you.

If you’re thinking “this couldn’t happen to my child,” think again! Let’s look at

Who Does This?

The identity thief is not always a stranger. In many cases, it’s a relative with bad credit who takes advantage of a child’s pristine credit. Conveniently, these family members generally have access to the information necessary to maximize the fraud with little attention.
This seems absurd, but imagine a parent who is strapped for cash, has a bad credit score and needs to buy groceries. In this case, short-term thinking blinds the relative or friend to long-term consequences. In other instances, the child’s future is not taken into consideration at all.

Frankly, it doesn’t take much to get the crime underway; all a criminal needs is the child’s name and Social Security Number. These pieces of personal information are exposed in a variety of ways:

• When registering for daycare, schools and recreational sports
• On medical, dental and hospital records
• When joining organizations like the Girl Scouts, Boy Scouts, etc.
• When the above information is permanently stored and accessed by volunteers or employees
• When one of the above organizations is breached by a hacker or malicious software
• When an adult befriends your child on a social networking site (MySpace, Facebook) and eventually socially engineers private information out of them

Were you surprised the other day when I said that your children are highly attractive targets of identity thievesbecause they have untouched and unblemished credit records?  Let me tell you just how easy it happens.

How Does It Happen?

All an identity thief needs to ruin your child’s bright financial future is her name and Social Security Number.

“Shouldn’t my child’s age show up on any credit background check, shouldn’t the merchant recognize that the person in front of them buying a car on credit isn’t seven years old?” you ask.

Yes, it should, but the people screening the credit report rarely give it the time and care necessary to detect fraud.

All too often, background checks involve simply matching the name and the Social Security Number provided. This leaves doors wide open for scandalous minds to wreak havoc on your child’s perfect credit. The most unsettling part is that the age of the applicant (in this case, the person posing as your child) becomes official with the credit bureaus upon the first credit application. This makes clearing a sabotaged credit record even more difficult because you have to prove to the credit bureau that your child is only seven and isn’t responsible for thousands of dollars of debt.