Electronic Identification as Economic Commodities in the Black Market

The business world has transformed from small localized physical markets into a massive global virtual marketplace. As this electronic marketplace continues to grow and expand there is increased dependence upon the reliability of electronic identities. These virtual identities are the basic foundation of this electronic economy and their use facilitates everything from simple telephone calls to the purchase of on-line goods and services. All transactions in this marketplace rely on an electronic identifier in some form and thus ensuring the security and authenticity of this information is of the up most importance. The current gaps in security has provided criminals an opportunity to profit from the acquisition, trafficking, and use of these electronic identities. Every acquired identity can provide a criminal with anonymous access to high valued goods and services with a very low risk of prosecution. The U.S. Government Accounting Office reported in 2002 that the prevalence and cost of identity theft is growing at a rate of 40 to 50 percent per year(1). The federal trade commission reported that identity theft cost consumers and businesses over $50 billion in 2003 alone and is growing at an alarming rate(2).

As with any valuable commodity, these electronic identities themselves have an intrinsic value and are actively exchanged in underground virtual marketplaces around the world. The subject of this article addresses the trafficking of stolen electronic identities and how various elements of that market impact the street-value of the commodity. The data for this article was obtained through interviewing investigators from federal law enforcement agencies and the financial service sectors, who are actively investigating electronic identity theft, as well as former ‘informants’ who have at one time participated in this shadow economy.