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Internet identity theft is a shadow that lurks around all of our computers all the time, but certainly during the holidays and its subsequent surge of shopping, it is an aggravated and more prominent possibility. It would appear at least according to Verdasys, a data loss prevention company, that the figures (47 million thefts) may be distorted and reflect the fact that some people are lucky enough to have their data stolen many times! The problem in these cases may not have been with the original retailer but rather with someone that the retailer does business with down the credit card line.

According to Dan Greer, CTO of Verdasys:

“The statistics may indicate that 250 million Americans have had their data stolen, but that is not actually correct. What you have here is sampling with replacement. One person can have their data stolen several times. So it isn’t 250 million individuals who had their data stolen out of the 300-plus million people in the U.S. It’s 250 million pieces of information related to a person.”

Still, that is bad and there is not other word for it. There is a silver lining, however, attached to this credit card cloud. New merchant security standards have been implemented by both Visa and Mastercard and as of June of last year retailers and others are required to participate in the Payment Card Industry Data Security Standard (PCI DSS). The problem lies in compliance, and as of today, only 40% of the Level 1 merchants (those who generate 6 million transactions or more annually) are fully compliant.

Companies really cannot thoroughly monitor customer data files, and there is, alas, always a “counter-party risk.” This refers to a buyer-seller relationship in which the exchange of information is with another party outside the seller’s parameter. The third-party processor has been the culprit in many of the indicated credit card losses and stolen identities.
To the consumer, it doesn’t matter how their identities or personal data was lost as the issue is that it was lost.

And so caveat emptor now means other than the obvious. You should not only beware of what you are buying and who you are buying it from but also of those from whom the companies are dealing with to process orders.

How can one do this without a severe and permanent migraine?  The answer is that one cannot, and shopping online, like most things in life, still has its risks!

Via [CNET]