How Your Personal Data Is For Sale: The New Frontier of Identity Theft

IntroductionIn today’s hyper-connected world, the notion that someone could steal your identity without ever touching your computer might seem implausible. Yet, this scenario is an alarming reality. The vast amounts of personal data being collected, stored, and sold enable cybercriminals to build disturbingly accurate profiles of individuals without needing to breach their personal devices. This marks a new frontier in identity theft, driven by the commodification of our most personal information.

The Data Economy: Who Is Selling Your Information?

Your personal information is at the heart of the booming data economy. Often referred to as the “new oil,” data drives industries and fuels innovation globally. As the World Economic Forum highlighted in 2023, the global data economy was valued at over $3 trillion, underscoring the immense value placed on personal information.

Data brokers are key players in this economy. They collect, aggregate, and sell vast amounts of data, including personally identifiable information (PII) such as names, addresses, phone numbers, Social Security numbers, and dates of birth. They also gather behavioral data, like browsing habits and purchasing history, as well as financial data including credit card numbers and credit scores.

“Between 2017 and 2023, 147 million American consumers had their sensitive information compromised in data breaches.”

These brokers compile data from a variety of sources — public records, social media platforms, and online transactions — and sell it to advertisers, marketers, and even malicious actors. This makes it all too easy for cybercriminals to exploit this data for identity theft.

The Dark Side of the Data Economy: Cybercriminal Exploitation

The data collected by brokers, while often legally acquired, is not always securely handled. In 2022 alone, over 300 million records were exposed, many of which quickly found their way to the dark web. With this information in hand, cybercriminals can perpetrate identity theft without ever needing to breach your personal devices.

One of the most concerning methods they use is social engineering. Armed with detailed personal information, criminals can carry out highly convincing attacks. They might impersonate you during calls with your bank, use your Social Security number to open new credit accounts, or reroute your mail to access even more sensitive data.

“82% of breaches in 2023 involved the human element, including social engineering attacks,” according to Verizon’s Data Breach Investigations Report. This echoes themes from a previous exploration I made into the manipulation of social cues to bypass even the most sophisticated systems, a tactic that underscores just how potent these methods can be.

Another troubling tactic is synthetic identity fraud. Instead of using your complete identity, criminals combine real and fictitious information to create a “synthetic” identity. For example, they might use your actual Social Security number but pair it with a fabricated name and birthdate. This synthetic identity can then be used to apply for loans, credit cards, and government benefits.

“Synthetic identity fraud accounted for 20% of credit card losses in 2022, costing financial institutions billions of dollars.”

Similarly, credential stuffing has become a prevalent threat. If your email address or password has been compromised in a data breach, cybercriminals can use automated tools to test these credentials across various websites, gaining access to your accounts without the need to directly hack your computer.

“In 2021 alone, there were over 193 billion credential stuffing attacks.” The way these vulnerabilities are exploited — especially in cloud environments — adds another layer of complexity to modern cybersecurity challenges, a topic I’ve delved into in other discussions around cloud vulnerabilities.

Phishing, a more traditional yet evolving method, also benefits from the vast amounts of data available. By purchasing detailed information, attackers can craft highly targeted phishing emails that are far more convincing than generic scams. These emails might reference recent transactions or interactions, making you more likely to fall for the trap.

“In the first half of 2022, phishing attacks increased by 61%, with over 1.2 million incidents recorded.” Phishing isn’t just about random scams anymore; it’s increasingly sophisticated, often leveraging AI-driven tools to enhance effectiveness. The offensive capabilities of AI in such scenarios highlight the growing complexity of modern threats, as discussed in my article on the hidden risks of AI.

The Human Cost of Data Exploitation

The implications of identity theft extend well beyond financial loss. Victims often spend years attempting to clear their names, recover lost funds, and restore their credit. The emotional toll is also severe, leading to stress, anxiety, and a deep sense of violation.

“The average victim spends approximately 200 hours resolving identity theft issues.”

How to Protect Yourself

Given the pervasive nature of data collection and the thriving market for personal information, it’s almost impossible to keep all your data out of malicious hands. However, there are proactive steps you can take to reduce your risk:

1. Monitor Your Credit Reports
Regularly reviewing your credit reports for unauthorized activity is crucial. Many credit monitoring services offer alerts if suspicious activity is detected. Consider using a service that includes dark web monitoring for your Social Security number and other sensitive information. Utilizing free resources like AnnualCreditReport.com to obtain your credit reports from the three major bureaus — Equifax, Experian, and TransUnion — can also be beneficial.

2. Use Multi-Factor Authentication (MFA)
MFA adds an extra layer of security, making it harder for criminals to access your accounts even if they have your password. Whenever possible, opt for app-based MFA rather than SMS-based MFA, as the latter is more susceptible to SIM-swapping attacks. Enable MFA on all critical accounts, particularly those linked to financial services and personal data.

3. Limit the Information You Share
Be mindful of the information you share online, particularly on social media. Even seemingly innocuous details can be used by cybercriminals to piece together your identity. Regularly review your social media privacy settings to ensure you’re not oversharing information. Consider removing any unnecessary personal details from your profiles, such as birthdates, addresses, and phone numbers.

4. Opt-Out When Possible
Some data brokers allow you to opt-out of their data collection services. While this won’t eliminate the risk entirely, it can reduce the amount of data available for sale. Utilize services like StopDataMining.me to remove your information from data brokers’ databases. Register with the National Do Not Call Registry and opt-out of prescreened credit offers via OptOutPrescreen.com to further limit your exposure.

5. Freeze Your Credit
If you’re not planning to apply for new credit in the near future, consider freezing your credit. This makes it much harder for criminals to open new accounts in your name. Freezing your credit is free and can be done online with all three major credit bureaus. In addition to freezing your credit, placing a fraud alert on your credit reports adds another layer of protection.

A Call for Greater Accountability

The reality that your data is literally for sale underscores the urgent need for stronger data privacy regulations and greater accountability from companies that collect and store personal information. As long as this data remains a commodity, individuals must stay vigilant and proactive in protecting their identities. The General Data Protection Regulation (GDPR) in the European Union is one such framework that has begun to hold companies accountable, having imposed over €2.9 billion in fines since its implementation.

The internet, while bringing unprecedented convenience and connectivity, has also opened up new avenues for exploitation. In a world where your identity can be stolen without a hacker ever touching your computer, awareness and action are your best defenses.

Conclusion

In today’s digital age, understanding the risks and taking proactive steps to protect your personal information is essential. By staying informed, monitoring your data, and employing security best practices, you can significantly reduce the likelihood of falling victim to identity theft. Remember, in this data-driven world, your personal information is one of your most valuable assets — guard it wisely.

About the Author

Kai Aizen is a cybersecurity specialist and Social Engineering lecturer. An avid fan of Kevin Mitnick, Kai is deeply engaged in exploring how artificial intelligence can reshape our future — hopefully for the better. Kai’s expertise spans across various facets of cybersecurity, from cloud vulnerabilities to AI-driven threats, which he regularly explores in his writing. Through his work, Kai aims to shed light on the hidden risks and potential solutions in the ever-evolving landscape of cybersecurity. For a deeper dive into these topics, you can explore his writings on cloud vulnerabilities and the offensive side of AI.