Last week, the Wall Street Journal announced that one of the leaders in online financing formed a business partnership with one of the major players in identity theft protection. This definitely demonstrates to potential customers that this online lender is serious about the safety of personal financial information when customers apply for a loan with their firm. Is this the beginning of a trend for the more reputable online lending realm?
According to an online article in CNNMoney.com from August of 2008, approximately 15 million Americans become victims of identity theft each year. An article on lending scams, from last December, pointed out that the Federal Trade Commission investigates thousands of personal loan scams each year. Many of these scams originate over the Internet.
Normal lender business procedures require borrowers to fill out a standard application when applying for an online loan. The application process will request sensitive personal information such as current address, telephone number, place of employment and length of time employed, as well as specific banking information. However, such online applications can be one-sided if there is a pseudo-business on the other end of your transmission. The business of “phishing” for information has become a thriving enterprise among thieves who are seeking to obtain the information that innocent victims naively provide.
What information are Identity Thieves After?
Identity thieves are after any easily obtainable personal or financial information they can get:
• Your full name and date of birth • Your address and telephone number(s) • Your social security number • Your complete bank account number(s) • Your employer and work address
• Your rate of pay
What can identity thieves do with this information? • Apply for a credit card(s) with your name, date of birth, and social plus “new” or “updated” personal information • Apply for personal loan, auto loan, or auto lease with your name, date of birth, social, bank info, and employer name
• Open up a new bank account, with your name and social
It is truly scary when you realize that with the simple completion of an online application, your life could be turned upside down. Yet, it happens every day.
According to a 2008 research study on fraud, an identity theft occurred every 79 seconds. Unauthorized access to your financial information is possible even when legitimate online businesses do not provide adequate security (encryption) for electronic transactions or do not maintain adequate company security standards for the storage of data. This is probably why the wedding of the lending company and the identity theft business was a good match.