Identity Theft More Profitable Than Car Theft – Krebs on Security

Buying a car or making any other expensive purchase can be a hassle. And when it’s necessary to finance a purchase, there’s one more hurdle. If you want merchant financing, you’ll often be required to fill out a credit application or, at the least, to provide information like a credit card or your Social Security number.

Recent hacker break-ins at a half-dozen car dealerships nationwide are a reminder of just how easily one’s personal and financial information can be jeopardized by poor security at any of of tens of thousands of organizations that have access to that data.

Earlier this month, Farmington Hills, Mich. based RouteOne LLC sent a letter to more than 20,000 dealerships around the country, warning of probable malware infections at six dealerships that use its service. Formed in 2002, RouteOne is a joint venture by GMAC (now called Ally Financial), Ford Motor Credit, Toyota Financial Services, and DaimlerChrysler Financial Services. Dealerships use RouteOne’s credit application software and Web portal to run credit checks and process financing for car buyers. The service also allows authorized users to pull credit reports from the three major credit reporting bureaus.

In September 2011, RouteOne issued a “security bulletin,” to its affiliates, stating in part:

Identity Theft More Profitable Than Car Theft – Krebs on

A letter from RouteOne to partner dealerships.

“Over the recent past, RouteOne has received information regarding a small number of dealerships (6) that have experienced compromises in their system security environments (including misappropriation and misuse of their RouteOne log on credentials likely as a result of their dealership computers being infected with spyware). RouteOne is in contact and working with affected dealerships in an attempt to help them address their security issues.”

The bulletin states further than RouteOne “takes these matters very seriously and therefore has been in contact with the FBI and the U.S. Secret Service. Ryan Holmes, the Secret Service agent assigned to the investigation of the attacks on RouteOne’s customers, said he could not release any information on an active investigation.

Mass data collection, and the resulting potential for cybertheft, is a relatively recent problem. Ten years ago, data aggregation points like RouteOne didn’t exist. RouteOne was created to speed credit and financing processes at dealerships, which previously had to navigate to and authenticate at multiple finance vendors, lenders and credit bureaus. Today, dealerships can access all this information with a username and password at, or via a RouteOne iPhone app.

Dan Doman, vice president and general counsel for RouteOne, said the company became aware of the unauthorized activity after it was notified by the affected dealers.

“It’s important to note that RouteOne has not been breached in this instance, or ever in the past,” Doman said. “What we do when we learn of these matters is we try to get it out to our dealers as quickly as possible so they can take appropriate steps to fix it.”

Identity Theft More Profitable Than Car Theft – Krebs on

ID theft services for sale.

Technically, RouteOne is correct. It did not have a data breach: Some of the customers who use their service did. But that distinction is irrelevant to thieves who prize such access, and to consumers who find their identities hijacked and themselves saddled with unexpected debts from fraudulent new lines of credit opened in their names. The criminal underground is full of services that allow miscreants to look up Social Security numbers, dates of birth, maiden names, and other sensitive information. It’s not clear where that data comes from, but the most likely sources are compromised accounts at businesses and organizations that have easy and frequent access to consumer data.

This blog post isn’t intended to single out RouteOne; that is just a recent example of a vast problem for individuals who must share personal data. The same kind of data aggregation exists in many other businesses and tens of thousands of organizations that routinely access sensitive consumer data, including medical, dental and real estate services. Thieves can access a gold mine of consumer data just by compromising PCs at any of these places.

Then comes the question of who’s responsible for alerting consumers who had their data breached in an attack like this? RouteOne’s Doman said the company is confident it has no obligation to disclose a breach.

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RouteOne’s iPhone app.

“We have not had a system breach, and therefore none of the triggers under the law that would require RouteOne to provide notice to individuals has been crossed,” Doman said.

Jeff Neuburger, a leader of the technology, media and communications group of law firm Proskauer Rose, said Doman is probably right, and that any duty to notify affected consumers would rest with the affected dealerships.

“There are 47 different state [data breach notification] laws on the topic, and each one is a little different, but most of the laws say that if you collect information from a consumer and that information gets compromised, you’re obligated to notify the consumer,” Neuburger said.”Unfortunately, this also puts companies in a position where they have to comply with 47 different state laws, no matter what state they’re in.”

Because personal information is required in so many situations, it’s almost impossible to avoid sharing it. As the RouteOne incident reveals, individuals aren’t always notified of data intrusions.

To protect yourself, you should check your credit reports frequently. Free credit reports are available once a year (and more frequently if you are a victim of identity theft) from each of the three major credit reporting bureaus at This central site allows you to request a free credit file disclosure once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. (This site should not be confused with similar-sounding organizations that charge for essentially the same information).

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