The importance of full disk encryption solutions for laptops and other digital media has been espoused a myriad of times by numerous security vendors like AlertBoot. We’ve all heard the stories regarding identity theft, and the importance of keeping Social Security Numbers safe. Then there are those unique stories that cause one’s jaws to slacken. Those unique, imaginative capers that remind me again and again why protecting data is no laughing matter.
For example, SSNs could be used to build up your wealth two cents at a time. Wired.com is reporting that a man in
Brokerages will often test the validity of a brokerage?account to checking?account link by depositing a small amount of money, usually measured in cents, into your checking account (this is usually known as an ACH setup). These small monies are known as micro?deposits, and as far as I know, it’s free money. I know I’ve never been asked for two?seven cents back by my brokerage account.
What Largen allegedly has done is create scripts programmed to open tens of thousands of online brokerage accounts. There is no need to deposit any money after opening a brokerage account—I mean, usually there is a minimum balance not to be charged brokerage fees and whatnot; but if you don’t deposit the money, what can the brokerages do? I guess they could file a lawsuit to recover two cents. Meanwhile, you can do whatever you want with that micro?deposit.
Based on Wired’s story, it sounds like Largen wouldn’t have been caught had it not been for a clause in the Patriot Act that requires financial firms to verify the identity of their customers. Schwab.com, one of the companies affected by Largen’s shenanigans, found that over 5000 accounts were opened with fake information. Ultimately, Largen was able to accumulate over $50,000 from various companies using the above method, according to the affidavit filed by a Secret Service agent in charge of the investigation.
My question is, if the accounts were not set up under fake names and SSNs, would Largen have been found out? I mean, the guy was using the names of cartoon characters and made?up SSNs, so no doubt these must have raised red flags for the auditors. But if Largen had used real names and their corresponding SSNs, would the brokerages have caught on? My guess is that the answer is yes…eventually—5000 recently opened, inactive accounts would be the first whiff of something being wrong.
However, I imagine that the use of invalid SSNs helped to alert the Schwab account auditors that something may be awry much sooner, leading to Largen’s successful arrest. New, inactive accounts may be problematic, but new accounts with fake data are even more problematic. If Largen had used stolen IDs, he may have been able to gain some time and pull off the scam.