What Do the Dark Web and Bitcoins Have to Do with Card Fraud and Identity Theft?

The answer is – plenty.

In case you aren’t familiar with the terms, let’s start with three definitions:

Dark web – a collection of websites that exist on an encrypted network and cannot be found by using traditional search methods or visited by traditional browsers. Dark web sites often deal in illegal activities.

Bitcoins – a worldwide cryptocurrency and digital payment system. Called the first digital currency since the system works without a central repository or single administrator.

Deep web – the aggregate term for websites that are not encrypted but, like the dark web, cannot be accessed by traditional search methods. Contains millions and millions of sites, but content is usually legal.

According to Anna Lothson in a post on Rippleshot in August, the dark web market has become a haven for hackers to access credit card data and then commit credit card fraud. The packaging and auctioning of compromised cards occurs faster than a bank can detect it. The monetization of compromised cards has become a sophisticated industry using the dark web. Also, the reselling of stolen credit and identity data through the dark web is running rampant and creating a whole new business for hackers.

According to Suzanne Woolley in a recent Bloomberg article, high-limit credit cards are selling on the dark web for the bitcoin equivalent of between $10 and $20. Business credit cards are even more valuable, as they often have very high or no spending limits.

In addition to credit card data, underground markets also sell full identities of individuals for as little as $10 apiece. They are called fullz – “dossiers that provide enough financial, geographic and biographical information on a victim to facilitate identity theft or other impersonation-based fraud,” according to the Bloomberg report. Fullz allows fraudsters to get past those highly personal questions asked to verify identity, like your mother’s maiden name. Researchers from SecurWorks, an information security service, recently found one vendor selling W-2 and 1040 tax returns as a package for $30. If a buyer wanted information on the victim’s adjusted gross income, they could get it for an additional $20.

It’s interesting to note that bitcoins have become the de facto currency of the dark web. Bitcoins played a major role in Silk Road transactions. Silk Road was an online black-market site dealing mainly in illegal drugs. It was founded in 2011 and shut down by the FBI in October of 2013.

Differences between the Deep Web and the Dark Web

Many people confuse the deep web with the dark web. Combined, they comprise the majority of the billion-plus websites that exist. It is estimated that traditional web search engines, such as Bing and Google, can only index about one in every three thousand pages on the web.

The main difference between the dark web and the deep web is that the dark web is truly dark, often involving illegal activity. Fortunately, the largest part of the deep web, which is huge compared to the dark web, consists of legal statistics and data bases often tied to US government agencies. One surprising fact is, every time you access a website designed for your eyes only, like your bank account, email, or even your personal Netflix account, you are actually on the deep web.

Fear of the Unknown

Scary stuff? You bet. An average individual may feel defenseless against illegal web activity. It has been suggested that credit monitoring and credit freeze services may offer the only hope of protecting oneself from dark web credit fraud and identity theft. There are numerous credit monitoring services that, for a fee, will notify the customer of activity regarding them posted to the three main credit bureaus. They will also report any suspicious activity or changes to personal information, such as address.

Some believe using a credit freeze is preferable to credit monitoring. A credit freeze allows a user to “seal” their credit reports and use a personal PIN to temporarily “thaw” their accounts if legitimate inquiries are needed. This prevents thieves from establishing new credit in a user’s name even if they have obtained personal information fraudulently.

Credit bureau and information services group Experian has recently been advertising a free “one-time scan” of the dark web scan to see whether your personal information has been compromised. But many believe that even credit monitoring and credit freezes will not stop credit card fraud or identity theft due to the ever-increasing sophistication of thieves on the dark web. Time will tell.

This post was originally published in 2017 and was updated February 15, 2018.


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