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300,000 stolen identities shows need for updated credit card process

Nov 18, 2011 Matt Roesly

A California resident was sentenced to eight years in prison for identity theft after authorities tracked his phone with a GPS device and found a hard drive with more than 300,000 stolen identities on it, CNET reports. Robert Delgado, 40, of Monterey Park, California, pleaded guilty earlier in the year to bank fraud conspiracy and court documents reveal that he was accused of stealing credit card numbers, and forging credit cards and government-issued identification to acquire electronic devices and jewelry. Eve Williams, a U.S. Postal Inspector, became suspicious and investigated the issue when an identity theft victim informed the Post Office that their mail delivery was cancelled and credit card accounts were illegally opened in their name. Thanks to an informant and Facebook, Williams was able to locate Delgado's phone number on the social network. She learned that Delgado was making purchases with fraudulent credit cards at shopping malls. Williams obtained a warrant from a federal judge to track Delgado through his phone in southern California shopping malls, the news source states. In California, there were more than 38,000 consumer complaints regarding identity theft to the Federal Trade Commission, well above the national average and third overall in per-capita occurrences. The United States still uses magnet strips for credit cards, which is a cheaper yet more easily hacked device than the smart card in Europe. Richard J. Sullivan of the Federal Reserve Bank of Kansas City outlined the importance of updating United States credit cards and noted smart cards stood as a viable and more secure option. "Smart cards have the potential to provide strong payment authorization and thus put a substantial dent into the problem of identity theft and payments fraud," Sullivan wrote. "The falling costs of infrastructure are tilting the cost-benefit calculation in favor of adopting payment smart cards in the United States. But some significant challenges must be overcome before smart card deployment can substantially improve the security of payment authorization. For a country whose identity theft rate has been on the rise exponentially since the turn of the millennium, increased technological measures should be taken to ensure the safety of consumer information. Regardless, businesses and consumers should always exercise caution before disclosing any personal information to merchants.