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Daily Dashboard | Think Outside the Box; The Crooks Always Do Related reading: CFPB releases Consumer Protection Principles on financial data sharing


The privacy community pays attention to a multitude of risks on a daily basis. We worry about data transfers, solicitation opt-outs and the tracking of individuals’ behaviors and routines. For consumers, it seems to be identity theft that is most worrisome.

The FTC reports that identity theft continues to be consumers’ number-one complaint. Similarly, a recent Ponemon Privacy Trust Survey indicates that identity theft tops the list of consumer privacy concerns, followed closely by government surveillance.

Protecting people is the right thing to prioritize, but doing so also serves to protect the safety and soundness of our institutions and our interconnected financial system.

For an understanding of how our various tasks as privacy professionals can prevent identity theft for consumers, here are some scenarios, all inspired by real events, aimed at helping you better appreciate consumer experiences, look at process and think about privacy pros’ role as a risk managers.

Password Compromise

Scenario: A consumer checks their e-mail one morning and is alarmed by several bank alerts indicating that their checking account is severely overdrawn. Frantically, they log in to the account and run through the transaction history. There’s a number of strange checks drawn to unfamiliar merchants for various amounts. Quickly, they connect to the bank’s fraud department to get the account straightened out, but their day is now totally wrecked and their paranoia is taking a wild ride. This is a headache that may last a while and will probably shake confidence in the financial system. How did this happen?

As it turns out, this is partly the consumers' fault but also isn’t. Did they remember the rules about passwords, that one should always use strong and unique user IDs and passwords for all accounts, maintain up-to-date antivirus protection and register a mobile device with the bank?

What happened was an employee for a social media service provider was duped by a social engineer into divulging their security credentials, allowing the hacker to break into a proprietary network and steal the user ID and passwords for millions of users of a popular social media app. Knowing the vast majority of people have a strong propensity to reuse login information for multiple accounts, the crooks had a field day with bombarding various banks (cyber attacks) to identify and break into random bank accounts where there was a match for the identical credentials and no device recognition. Once inside, they grabbed any information that could be used to create counterfeit checks.

So what can the privacy pro do about this?

The service provider pro should enhance employee training around social engineering concerns, make technical enhancements to their data leakage program and make adjustments to their multi-factor authentication defenses. The social media company pro should oversee their service provider to ensure these changes are implemented, take steps to enhance access controls and also require users to create more complex passwords or utilize other authentication methods. The privacy pro working at the bank can take steps to educate consumers of these risks, ensure top-notch authentication and minimize any data available online.

Hacking Attack

A consumer eats at a restaurant and, upon paying the bill, learns the card has been declined. In no time, the consumer is on the phone with the bank and running through a mesh of transactions, some familiar but some definitely not. Someone’s taken over their credit card account. This is definitely going to take a while to sort out since they’ll also have to update all of their auto-pay accounts and subscriptions once the bank issues a new credit card.

So what happened?

A service provider employee’s credentials to a major retailer were stolen, which enabled crooks to compromise the retailer’s network by pretending to be the service provider. They injected a previously unknown trojan (malware), which the anti-virus programs were unable to detect. Just as stealthy as they came in, the crooks covered their tracks on the way out. This allowed their threat to lie dormant and wait for the moment of opportunity—Black Friday, a day when card purchases peak. The malware worked as designed and transmitted millions of transaction details and personally identifiable datasets to the perpetrators, who quickly packaged and sold them on the illegitimate black market. Small-time crooks, organized groups and ID theft rings alike purchased the data to supplement their counterfeiting operations and card-not-present transaction schemes.

Privacy pros: Looks like another time to blame a vendor. Or is it?

It’s great the retailer and banks have top-notch security controls, but how thorough is your third-party oversight? Are the information-security expectations at least as rigorous as your own internal program? Where do you stand with forward-looking adoption of smart card technology? Are you getting intel from solid internal and industry sources? Or is everything you know regarding the latest breaches coming from the news media? This incident may serve as a good reminder to establish or freshen up your key risk indicators and manage a meaningful threat dashboard. With a disciplined risk management methodology, you can be better prepared for the next crisis.


A consumer has received a vague letter indicating that their personal information and bank account was somehow compromised and that they’ll be getting new cards and checks soon. The letter only indicates that bank security was compromised and that certain precautions are being taken.

What happened? Here’s the real dirt.

Social engineers are crooks who bombard call centers with calls attempting to glean tidbits of consumer data through multiple attempts, gradually completing a full profile of their identity theft victim in order to perpetrate fraud. Sometimes, by exploiting publicly available social media, the perpetrator may take on the false identity of a back-office employee who is inquiring about customer information in order to resolve some “dispute.” This type of social engineering scheme is called pretexting.

As a privacy pro, be very careful with your own social media profile in terms of what you post and who you “friend,” and have a social media policy to guide your fellow employees. Make sure that your call center employees are aware of the pretexting risks and what to look for, and have controls and procedures to authenticate all callers and to prevent unauthorized disclosure of customer information. If you work at a financial institution, then leverage incidents, whether internal or external, to challenge your mandatory information security, identity theft prevention and third-party oversight programs.  

The scenarios outlined here are just a few examples of the thousands of potential events which could play out in different ways. As you contemplate privacy risks surrounding data transfers, marketing activities and other data uses, bear in mind data protection with the underlying concern of data compromise, which could lead to identity theft.

Look at the business requests coming across your desk with a lens of “what’s the worst that could happen?Often you may conclude that compromise and identity theft are really the worst possible harms that could fail both your institution and your customers/data subjects.

Realize identity theft is often derived from systemic failures. This thought process should lead towards enhancements with data minimization, mapping exercises, retention policies, encryption, network security, access rights, governance and oversight.

Putting oneself in the customer’s shoes will give perspectives that should lead to making the right decisions and covering the details that matter most. Understand the industry hand-offs of customer information from service providers to retailers and to banks, and know that each hand-off may expose consumer data to varying degrees of protection (or lack thereof).

Also understand that the crooks are equally complex. Some run full-spectrum identity theft rings while others are merely hackers, compromised insiders, data aggregators, resellers, purchasers, counterfeiters or mules.

Checklists and controls are necessary to combat this growing threat of identity theft, but these should be inspired by a creative and informed approach with perpetual reevaluation and awareness of how your organization plays a role.

Always challenge the status quo and be willing to think outside of the box; the crooks certainly do.

Matt Storer, CIPP/US, is a compliance manager for Capital One with more than 18 years of experience in financial services and working on various privacy compliance topics. Storer holds a CIPP/US from the IAPP, a bachelor’s degree in business from Eastern Oregon University, a master’s degree in management and organizational leadership from Warner Pacific College and is a veteran of the United States Marine Corps. Storer is based in the Portland, OR, area and can be reached at


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