Carl Weinschenk spoke with Cooper Bachman, product analyst for ID Analytics. In late July, the company released a study of employees’ criminal misuse of stolen identities.

Weinschenk: What did the study explore?
Bachman: The purpose of the study was to get a more granular view of differences between internal and external data theft. We looked at more than 12 data breaches due to an internal event. Using our proprietary ID Network, we used that data to analyze the relationship between identities involved in a data breach and those that weren’t. For example, [suppose] there are three identities with no relationship to each other, with no shared phone number or shared address. If there is a breach event and we start seeing these identities share elements and produce anomalous identity behavior, than you can say that these are not normal consumer patterns.

Weinschenk: Does this happen a lot?
Bachman: What we have seen in the past could be on the level of hundreds of identities and thousands [of such behaviors]. They could use the phone number or the address and apply for credit cards and goods and services. Out of these suspicious relationships, we did case study analysis. On one level, we ran large breach files to isolate the riskiest groups of identities that began to demonstrate suspicious or anomalous relationships with each other. The second part is a case study analysis on those risky groups of identities to determine if there is organized misuse.

Weinschenk: What did you find?
Bachman: We found of over a dozen breaches, eight had incidents of organized misuse. Four major themes were found.

Weinschenk: What was the first?
Bachman: The first was that the identities that were stolen by employees or fraudsters were used in a close proximity to where the data was original stolen, from two to 20 miles. That suggests that once bad guys started to misuse identities, they did not often use Internet channels or online. They are not moving out of the geographic areas. This suggests that they are not selling the data and having it disseminated. They are using data for applying for goods and services, not distributing the data over the Internet.

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