As if 2020 wasn't bad enough, we enter 2021 with another looming danger that continues to expand and wreak havoc in millions of peoples’ lives. It's the 'Cyber-demic,' a cyber-warfare that's spreading like we haven't seen before, caused by hackers who are leveraging COVID-19 to steal, sell, and damage personal identities. Even more unsettling is that, unlike the pandemic, there's no vaccine to slow down these attacks that are rapidly spreading and will continue to haunt individuals and businesses alike.

A detailed article about the 2021 Experian Data Breach forecast paints a grim picture of what's yet to come:

1. Hackers are likely to target digital usage from more remote working. 
2. Hackers may target the ecosystem of the Covid-19 vaccines.
3. COVID-19 tracing apps create a new surface for hackers to exploit.
4. The expansion of 5G will present increased vulnerabilities.
5. The rush to adopt digital and telehealth services puts the healthcare industry at an even greater risk for attacks.

 
Without any warnings, your small business clients could face significant risks on several fronts.
As Covid-19 continues to make the news, the vaccine rollout will present opportunities for criminals to prey on many Americans' fears, confusion, and misinformation. The advent of “contract tracing” organizations is creating new avenues for criminals to steal your client’s personal health information (PHI), or perhaps the thieves will pretend to be contract tracers to maximize the information they can steal.  Health records continue to be the most valuable data to resell on the black market, which opens nearly everyone up to vicious attacks of all kinds. 

With Covid-19 protocols requiring more and more people to set up Home Working environments and the 5G Networks' evolution, cyber-hackers have innumerable opportunities for attacks.  These technological hacking geniuses know all the vulnerabilities of Home Networking. The extensive connectivity of 5G technology makes your clients’ employees all more vulnerable to being caught off guard.  According to the 2021 Experian Data Breach Industry Forecast, with the technological control of a business' security and other devices, criminals will more regularly hold a business hostage in exchange for ransom, valuable information, or just for the potential fame.

Add to all of this the fundamental uncertainty of day-to-day restrictions and potential mandates on the public, and it is easy to understand that your clients are wondering how to best protect their lives, their businesses, and their assets. 

Have you considered new ways to generate revenue that will expand your clients' trust in the services you provide to them? You can protect your small business clients with new services that include robust protective monitoring and ID theft and fraud recovery. This monitoring can include Dark Web monitoring to alert businesses and individuals when their non-financial data (i.e. PHI) is being attacked or used against them.  These kinds of services are available, and several components can extend to their employees’ families.  Bringing these enhanced services goes a long way to increase client loyalty while helping you generate additional revenue. 

Yes, the vulnerabilities of data breaches are ever-present for today’s businesses, and fraud is getting worse all the time.  Why not heed the "cyber-demic" warnings of the 2021 Data Breach Industry report and use this as an opportunity to show your clients you care by providing them with an invaluable service that they can’t afford to go without?

We are facing an unprecedented time in our lives with the coronavirus upon us and people taking every imaginable precaution to “be safe” and survive the aftermath. With the wave of fear going on, it might be a great opportunity for I-Sigma members to look at the financial aspects of this unprecedented time and determine what other ways that your customers could be supported.

With data breach and ID theft related issues becoming a major concern for the medical industry, it may be prudent for your business to look for stronger ways to protect these clients. Criminals know that businesses in general, especially healthcare operations, are extremely distracted by the news and how to survive the fallout.   

Your clients might really appreciate a gesture of added protection and concern from you at this time….anything positive could solidify a relationship.  Although you can’t provide a medical solution, you can provide enhanced protection against the threats of a data breach, fraud, or ID theft, plus provide increased client awareness to be on guard.   

The coronavirus scams are already in full swing by criminals. We should expect it to only get worse as people continue to get bombarded with every imaginable negative news associated with this pandemic…driving up fear and uncertainty.  Significant distractions that criminals prey upon.

There are a wide variety of solutions out on the market that incorporate business protection against data breach events, which could give clients the ultimate safety net against criminal fraud & ID theft attacks.  If nothing else, incorporating these kinds of services signifies to clients the intent to be protective in whatever means possible….and help calm fears.  It might even be practical to provide these services at no cost to clients for an extended period of time, thus showing a sensitivity to the economic effects of all of this as well.
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These unprecedented times call for unprecedented action and I-Sigma members have a powerful voice with their clients to guide them and offer a positive message of breach protection and safety while they are dealing with all the other dangers at the same time.  Any kind of positive news at this time could be received by your clients in the most significant way and remind them how you’re ready to go above and  beyond to enhance their business when times are tough. 

Synthetic Identity Fraud is the fastest growing type of identity theft that is affecting auto dealers. It’s a type of fraud in which a criminal uses fake information, sometimes combined with real (usually stolen) data, to create a fictitious identity. A Credit Profile Number (CPN) is essentially a synthetic social security number, which is often used to create a fake identity. These made-up identities are established for the sole purpose of deceiving creditors to borrow money and open accounts. 
 
Due to the new chip cards, fraudsters are no longer as successful at counterfeiting credit cards, so they have targeted fraudulent auto loans at a higher rate, which impact auto dealers. It can be easy for auto dealerships to fall prey to synthetic identity theft since much of the information criminals provide them with is legitimate. According to TransUnion, the outstanding balance on auto loans linked to suspected synthetic identity fraud more than tripled from 2012 to 2017.
 
How “Phantom Borrowers” Threaten the Auto Industry:
One of the reasons that more criminals are using the synthetic identity scam is because lenders have gotten better at protecting against traditional identity theft, which often involves using stolen data about real consumers. When bypassing actual consumers, scammers send fewer “red flags.”  
 
How a “Phantom Borrower” is Born:
 

• After a data breach, fraudsters purchase personal identifying information on the dark web. 

• Scammer applies for loan using fake identity.
• Query to credit-reporting firm reveals no borrowing history. Applicant likely gets rejected.
• Query results in a new 'credit file,' a precursor to a credit report. Suddenly, a new identity has been born.
• Scammer applies for more loans, expanding credit file, giving lenders perception that applicant is real. Most likely, fraudster will get approved with a low limit credit.
• The fraudster uses the card and pays the balance on time to establish a good credit history
• The fraudster uses its good history to get more credit cards and accounts – and eventually applies (and is approved) for an auto loan.

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Synthetic identity fraud exploits a weakness in America’s consumer-credit system. Lenders often consider a loan applicant legitimate if the applicant has a credit report at one of the three credit bureaus. But a new “credit file”— essentially a precursor to a credit report—often gets created when someone simply applies, even if the loan gets denied. If one lender approves a loan for the fictitious individual, that information can make the file a full-fledged credit report.
 
TransUnion and Experian say it is difficult to distinguish between a “phantom borrower” and a real borrower who’s applying for credit for the first time and has identifying information that isn’t on file. 
 
The Real Cost of Synthetic ID Fraud to Dealers:
Synthetic identity fraud can cost a dealership greatly. Synthetic identity enables people who normally wouldn’t qualify for credit to purchase a car, which results in the dealership writing off the fraudulent amount and suffering operational expenses on the backend with the creditor. The balance of auto loans generated by suspected synthetic identities was more than $504 million in the fourth quarter of 2017.

In the event of a breach, the dealer’s “good” customers are also at risk since their information becomes prey to synthetic identity fraudsters. In fact, 33% of consumers lack confidence in the security of their personal and financial data when buying a vehicle at a dealership.  

What Auto Dealers Can Do to Reduce Their Risk:
Dealers need processes and programs that protect themselves and help keep their customers safe from the fraudsters that are waiting for opportunities to attack.Synthetic identity can cost a dealership thousands of dollars and numerous unrecoverable hours. Protecting your dealership from becoming a victim of synthetic identity fraud and/or breach requires strong security and recovery programs.

1. Implement Strong Security Processes
   The use of biometrics and cross-referenced background checks for identity verification can help stop synthetic identity thieves. Dealers should take extra precautions when applicants have limited credit history. With the growing risk of data breaches happening at auto dealerships, dealers need to seek greater breach recovery and response programs that will provide maximum protection when a breach event occurs. 
2. Provide Fully Managed ID Recovery 
   Give your dealership and employees the right tools and support to keep them safe from any formof ID theft or fraud. With major breaches such as Equifax, employees are at a growing risk of becoming victims of identity theft. Dealerships that implement fully managed recovery services provide their staff with an employee benefit that offers peace-of-mind and protection. A Fully Managed Recovery (FMR) program puts your employees’ first and will act on their behalf during the entire identity restoration process. 

Having greater cybersecurity preparedness needs to be the top priority for auto dealers.  This will help dealerships avoid becoming victims of synthetic identity fraud, as well as will create the basis for the ultimate response to any data breach or identity theft when it happens.  
 
 
 
 
 
 
Sources:
 
"The New ID Theft: Thousands of Credit Applicants Who Don’t Exist”WSJ, 6 March. 2018, https://www.wsj.com/articles/the-new-id-theft-thousands-of-credit-applicants-who-dont-exist-1520350404.
 
“Balance of auto loans linked to synthetic fraud soars” Automotive News, 7 May 2018, http://www.autonews.com/article/20180307/FINANCE_AND_INSURANCE/180309580/balance-of-auto-loans-linked-to-synthetic-fraud-soars
 
“Dealers vulnerable to hackers, survey warns” Automotive News, 20 June 2016 http://www.autonews.com/article/20160620/OEM06/306209973/dealers-vulnerable-to-hackers-survey-warns