• by Greg Peverill-Conti , Columnist, October 23, 2014

Last night, I attended the Digital Identity Forum in New York. The event was designed to help digital advertisers, publishers and the technology companies that support them better understand the changing nature of digital identifiers. To begin the event, Frank Abagnale Jr., the former fraudster made famous by the book, movie and Broadway show “Catch Me If You Can,” talked about the issues of fraud and identity.

I’ve seen Abagnale speak in the past and his is a fascinating story. (I won’t attempt to tell it here but recommend you hear it yourself some time.) In a nutshell though, at the age of 16, Abagnale found himself on his own in the world and turned to a life of fraud and false identities to support himself. Eventually, Abagnale was caught and convicted and spent years in prison. He was released early on the condition that he assist the FBI in detecting and stopping fraud, something he has now done for 38 years.

As he spoke last night, Abagnale made two points that focused on working with teens. One was a piece of advice, the other a warning.

His advice was that teens should not be given debit cards, but instead should receive supplementary credit cards associated with their parents’ account. He gave a number of sound reasons for taking this approach:

• It helps establish a child’s credit – debit cards have virtually no impact on a credit score so using one – even responsibly – doesn’t help. By using a credit card, on the other hand, the child benefits from their parent’s good credit, which can help when it’s time for the child to rent an apartment, buy a car or make other purchases for which a credit history is valuable (or required).

• It shields a child from loss to fraud – Abagnale himself uses credit as his primary payment method and here’s why: if a criminal uses his card, they are spending the credit card company’s money. As soon as a problem is detected the card is cancelled and another one issued almost immediately. If, on the other hand, a fraudster accesses a bank account they are stealing the consumer’s funds directly. Those funds aren’t returned until the bank investigates, which can be a lengthy process. 

• It provides a degree of parental oversight – because any charges appear on the parent’s bill, they are able to see where and how a child is spending their money. This allows parents to understand and educate their children on credit and wise buying behavior.

His warning around teens was ominous: they, more than high net worth adults, are the preferred targets of identity thieves. This seemed counterintuitive until Abagnale explained. When criminals breach a bank, business or government agency, there are two types of data they typically get their hands on: payment details and personal information.

Payment information has a short shelf life. Compromised credit cards or bank accounts need to be used immediately, since they will be closed or new cards issued as soon as suspect activity is detected. Identity information, on the other hand, becomes more valuable over time. Often, criminals will warehouse this data for years before putting it to work. And when they do, the consequences can be grave: for example, accounts can be opened or lines of credit established using a pilfered identity. 

Using the identity of a teen has a number of benefits over the identity of an adult:

• Teens typically have no credit history – this means a criminal can create a parallel “life” for their victim that can be built over time to fit a specific nefarious need.

• Teens – and their parents – are unaware of the danger – this means they are unlikely to receive credit reports or subscribe to credit monitoring services. As a result, the problem can go undetected for years.

• There is little that can be done – unlike an account that can be closed, personal details – name, birth date and Social Security number – can’t be changed. That makes untangling the problems caused by a compromised identity a costly and time consuming process.

So how can we, as marketers, use this information?

For those involved in banking and financial services, there is the opportunity to provide teens and their parents with sound advice on the best products to use for establishing good credit and reducing the threat of fraud. For all marketers, we need to be sensitive to the importance of protecting the data and identity of young customers. Obviously standards like COPPA are in place to protect young peoples’ privacy but the danger runs deeper.

Good data hygiene needs to be practiced by every functional part of an organization but marketing, which relies on data to better understand and reach customers, have a special responsibility. In the wrong hands, the rich data used for targeting can be used to build out identities or to trick people into providing account information that can, in turn, be used to compromise additional accounts.

The world can be a scary place and the ease with which criminals can navigate it is shocking. Teens are more vulnerable than most people and everyone – parents, communities, law enforcement – and even marketers – need to do all they can to protect teens from being caught up in the dark world of cyber crime.