Intersections’ Consumer Security Adviser, Neal O’Farrell joins us today. In this article, Neal talks about a disturbing trend – the rise of gang activity and identity theft.

One of my greatest identity theft fears has been the involvement of other criminals in identity theft. By that I mean criminals who have traditionally focused on other crimes, like burglary, switching to identity theft because they realize that identity theft is a much better business opportunity and career path for them.

We do know that burglary and identity theft are already connected, because most burglars realize that a stolen Social Security number or birth certificate is worth far more than a stolen TV or jewelry. Not only is personal information worth more, it can be sold over and over again, and there’s far less risk of being caught. And of course drugs like meth have long been associated with identity theft, in part because in the early days of identity theft the chemicals used to wash stolen checks were also a key ingredient in the synthesizing of meth.

But what if more organized criminals, like street gangs or drug dealers, realized that there was more money to be made in identity theft than selling drugs on street corners? What if they switched business and moved en masse into identity theft? It could spark another massive escalation that would be very hard to stop.

Well, it seems that my worst fears are being realized. A few weeks ago I wrote about Operation Rainmaker, an identity theft scheme busted by law enforcement in Florida. The thieves may have netted as much as $130 million by using stolen identities to file fraudulent tax returns. The most disturbing part, apart from the fact that the thieves managed to pull off such a massive heist so easily, was that the thieves were street level drug dealers who took courses in how to use the internet to commit identity theft.

They realized that if they just learned some basic skills they could make much more money, with much less risk, if they focused on identity theft over drug dealing. Drug dealing is hard work and brings a lot of risk, from arrest to death. And the dealers almost always have to rely on other people – the distributors to provide them with the drugs, the sellers on the streets to move the “product,” and of course customers willing to buy from them instead of their competitors.

But with identity theft these dealers don’t need anyone else. They can commit the crime themselves from the comfort of their own home, there’s a lot less risk, and they don’t need partners or suppliers. Unless of course you count the stolen identities they exploit.

If more drug dealers come to the same conclusion, if could be good news for the fight against drug use but terrible news for identity theft. And signs are other criminals are catching on. According to an analysis just released by the FBI, “gangs are also engaging in white collar crime such as counterfeiting, identity theft, and mortgage fraud, primarily due to the high profitability and much lower visibility and risk of detection and punishment than drug and weapons trafficking.”

And according to the National Gang Intelligence Center (NGIC) many gang members are now using the Internet for identity theft, computer hacking, and phishing schemes. Earlier this year, law enforcement officials arrested dozens of members of the Armenian Power gang on a variety of charges that included including a $2 million credit card scam and a large-scale check fraud scheme.

The FBI estimates that there are around 33,000 known gangs in the United States, with nearly 1.5 million active members. If these gangs start moving seriously into identity theft and other frauds, there’s no telling how bad identity theft will become. And especially with law enforcement already stretched to the limit.

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There are news reports almost daily about how hackers are able to gain access to the bank accounts of innocent victims and rip off thousands and thousands of dollars. In today’s article, Intersections’ Consumer Security Adviser Neal O’Farrell explains what you need to do to keep your hard-earned money out of the hands of hackers and criminals. A must read!.

The title of this article could just as easily have been “How to make half a million bucks a month from the comfort of your computer.” I was reading recently about how a twenty-something hacker from Russia managed to steal more than $3.2 million in just six months simply by pushing out malware designed to sneak on to unprotected computers, steal banking passwords, and empty bank accounts. His efforts paid off to the tune of around $17,000 a day, give or take.

The hacker goes by the nickname Soldier, and according to research by security firm Trend Micro, he managed to infect more than 25,000 computers in the three months leading up to June of this year using a malware toolkit that is freely available on the internet.

His success, at infecting so many computers and making so much money in such a short timeframe, should be a warning to every consumer to be ever vigilant when it comes to online banking. Soldier is one only of probably thousands of hackers using the same or similar crime kits to plunder online bank accounts.

So if you want to avoid being Soldier’s next victim, here are some simple tips to beef up your defenses.

1. Lock down your computer. Every computer should be protected by multiple layers of security, including anti-virus and other malware protection, encryption to protect your data, browser security to steer you away from malicious web sites etc.

2. Beef up your passwords. Weak passwords are your worst enemy – make them strong, random, and original. No sense in creating one strong password and then using it for every web site you know.

3. Sign up for alerts. Most financial institutions provide email or text alerts when certain things happen with your account – a transfer is attempted, an ATM withdrawal is made, or a check more than a certain amount is presented. Sign up for these alerts because they can be your earliest warning that something’s not right.

4. Be very careful with the apps you use. Apps are great, especially if they’re free. But apps are the wild west of security, with little control over who makes and sells them, and how securely the code is written. So use as few apps as you need and only from trusted sources.

5. Think twice about mobile banking. While banking from your smart phone sounds like a great idea, it’s still in its infancy and new security holes are being discovered daily. If you’re not completely confident about the security of your smartphone, stick to doing your online banking from a computer you do trust. Or at least trust a little more.

6. Don’t access your bank account over a public Wi-Fi network. It’s very easy to snoop on any computers using Wi-Fi networks in places like coffee shops and hotels. So much better to wait until you get home before checking your balances or paying bills.

7. Limit access to your computer. The fewer people who have access to your computer, the less risk you have of compromise. So it might be smart to ban family members from using the computer you use to bank online. That way, you won’t be at risk from their mistakes or bad habits.

8. Consider using a separate computer just for online banking. That’s the advice of the security expert who discovered the first banking Trojan a couple of years ago. If you use a separate computer just for online banking, you reduce the risk of malware sneaking on to your computer through drive-by downloads, infected attachments etc.

9. Use a keylogger prevention system, like PRIVACYPROTECT® which comes free with your IDENTITY GUARD® TOTAL PROTECTION(SM) membership, to protect your passwords from being snooped upon. Keyloggers are able to sniff and steal logins and passwords by monitoring what you type on your keyboard, but products like ID Vault allow you to bypass the keyboard and enter your login credentials using a virtual keyboard instead.

10. Take Facebook security very seriously. It’s not only an easy way for thieves to deliver the kind of malware that can steal your bank account login and password, it’s also a great way for thieves to find the answers to the most common “secret” questions – like the city you were born, your first pet, favorite teacher, and mother’s maiden name.

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