1/24/2011 12:30 PM ET|
Secrets of a former identity thief
Dan DeFelippi was the sort of criminal you worry about -- a, smart, savvy, nearly invisible fraudster. Here's his advice on how to protect yourself from people like him.
We've all heard the standard tips about preventing identity theft and credit card fraud. But what would a real identity thief tell you if he had the chance? Dan DeFelippi, who was convicted of credit-card fraud and ID theft in 2004, says simply this: You can't be too careful.
DeFelippi, 29, mostly made fake credit cards with real credit card information he bought online. "I would make fake IDs to go with them, and then I'd buy laptops or other expensive items in the store and sell them on eBay," he says. DeFelippi was also involved in several other scams, including phishing schemes that exploited AOL and PayPal customers. Committing credit card fraud is still "ridiculously easy to do," he says. "Anyone with a computer and $100 could start making money tomorrow."
After his conviction, DeFelippi faced eight years in prison, but under a plea deal he agreed to perform community service and pay back more than $200,000 in restitution. He also worked for the U.S. Secret Service, helping infiltrate the online underground and training agents in the latest fraud techniques. His help led to the arrests of as many as 15 people over two years. Today, he's a Web developer at a graphic design company in Rochester, N.Y. He agreed to take an hour with CreditCards.com to share his story and his top tips on how to protect yourself.
Q: How did you get started?
A: When I was in middle school and high school, I was into what I would call innocent hacking. I wasn't trying to be malicious or make money. I was just interested to see what I could do. In college, I started selling fake IDs to make a little extra money. I was pretty active in online chat rooms where people would talk about this stuff, and I began to realize there was a whole world of credit card fraud where I could make a lot of money with very little effort. From there, it was just a huge downward spiral.
Q: You said you bought credit card data online. Tell me about that.
A: Every credit card has magnetic stripe on the back with data on it. There are people out there who hack into computers where that data is being stored. There are also people like waitresses and waiters with handheld skimmers who steal the data that way. Then they sell the data online. I'd pay $10 to $50 for the information from one card. Then I'd use an encoder to put that data on a fake card, go into a store and purchase stuff.
Q: Do identity thieves like some credit cards better than others?
A: Well, a lot of American Express cards have no set limit, so you'd be able to buy a lot more. However, the downside is that a lot of merchants require more security for American Express than for other cards. They may ask you to enter the four-digit code on the front of the card or your ZIP code. That information usually isn't in the magnetic stripe information. So if a card is skimmed, if someone has its magnetic stripe information, they would still need the number on the front or your ZIP code to commit fraud.
Q: What about debit cards?
A: I always recommend against them. With debit cards, it's your real money in your bank account you're playing with. So if someone gets your debit card information and uses it, your cash is gone until you fill out a lot of paperwork and persuade the bank to give it back to you. Credit cards are much better at protecting you against fraud. And if you're worried about debt, you can always pay them off every month.
VIDEO ON MSN MONEY
I supposed it's good that this guy is sharing his "secrets" and if that prevents some of this stuff from happening, great. All the same, I'd still like to hit this smart guy in the head with a baseball bat. These guys that abuse the system and the rest of us who are out trying to make an honest living, I don't know, I think we cut them too much slack. It ends up costing us weeks, months and sometimes years to get our credit straightened out, lots of hard money in higher interest fees and a lot of money in product pricing to cover theft and fraud. I say hang em high and let them sell their apologies to their maker.
hey dude22, out here in the flyover states we rarely have a murder, the biggest news stories are fires, so yes, the tv stations DO put pix of criminals and would be criminals on air and ask for the public's help in identifying them. From fake door to door contractors and fake charity solicitors working the area to people pushing shopping carts of shoplifted items out of Wal-Mart to would be thieves at convenience stores, they all see their pix posted on air, and they usually do get identified and caught.
to 8srwild- what happened to the old adage "let the punishment fit the crime"? If it takes 2 years and x amount $ to clear up a stolen id, then the punishment should be that amount of time times the number of victims. If the crime pays many times more than the punishment costs, let alone the odds of not being caught, then there is substantial incentive to do the crime. I think the main reason for giving white collar criminals a slap on the wrist is that the prisons are overflowing with violent criminals, and some states are even releasing murderers early to relieve the crowding. Our prisons seem to function more as a training ground for criminals to improve their criminal skills than to rehabilitate them so our "punishment" needs to be rethought. While violent criminals need to be removed from society as protection for the rest of the society, most white collar criminals could be treated in more creative ways that would keep them out of prison but which would be most unpleasant to them, and which would include their [supervised] working fulltime at nasty jobs others don't want until they've paid back what they stole. Only after BOTH their time in the program AND full payback would they then be eligible for parole. Of course their assets would be seized as well and would count towards payback, an incentive for the biggest thieves to cough up their hidden assets. The biggest thieves would still have to be incarcerated [doing the worst jobs available in prisons] as their hidden assets could buy an escape. Since many gross jobs don't pay well, the more they stole, the longer it would take for their wages to equal the amount they stole. I think the possibility of spending years of doing things like cleaning sewage grinders might be a deterrent to the type of people who commit white collar crime.
NO WONDER THE ECONOMY IS SCREWED UP DUE TO A BUNCH OF LAZY **** BASTARDS, PLAYING THE SYSTEM, RIPPING OFF HONEST SHOP KEEPERS & CLIENTS OF THEIR MONEY
A THIEF IS A THIEF, NO MATTER WHAT
THIS NONSENSE MUST STOP
Q: You said you bought credit card data online. Tell me about that
Yes you can get to buy credit cards online from alot of spammers and not hackers.. now ask me the difference between a Hacker and a Spammer. Hackers are the good guys. they build all the computer programs you can ever think of but a Spammer are only out there to exploit you and steal your information. so back to the question. you can buy any credit card information for as cheap as $2.5 and full details with SSN, MMN and DOB for as cheap as$10.
Do identity thieves like some credit cards better than others?
Not really .. It all depends on what you need the cards for, if they need to make purchases they prefer a credit card but if you are in need of real time cash they go for a debit card coz it as good as cash at hand.(Western Union, Money Gram, Xoom and other personal merchant sites).
How do i get to protect myself?
The truth is you cant protect yourself until your government. The US government put some kinda security measures in place to curb it coz it cant be stopped. an average US store is vulnerable to any spammers attack. The only way you can get to protect your self is avoid any online transaction and pay in cash or be very careful with whom you share your information with.
I hope this helps.
Speaking as an actual victim of identity theft yes it sucked , it was a time consuming process with the banks and Paypal with their foreign customer service (whose reps can speak english but can not comprehend it) but the problem with today is not that carders get light sentences and plea deals.
The problem with our criminal courts are that it is perfectly legal to steal our money if you are fdic insured. And talk about light sentences and plea deals that issue should be raised about the child molesters who prey on our children time and time again because they are released time and time again!!!
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
RECENT ARTICLES ON IDENTITY THEFT
Which store penalizes you for too many returns? And which one will let you retroactively apply coupons?