Several leading IT companies, including Microsoft and eBay, yesterday joined forces with leading financial service providers such as Visa to form a coalition to fight online identity theft.

ID theft is becoming an increasing problem, costing US lenders around £1bn per year, with figures from analysts at Gartner showing around seven million consumers fell victim to some form of online fraud last year alone.

Last week, customers of US-based online trader Best Buy were targeted by a fake email posing as a warning from Best Buy's legal team. The email asked customers to submit their personal details, including credit card and social security numbers. This is just one example of how fraudsters are gaining personal information. Others set up fake auction sites encouraging users to bid for non-existent products.

"Most identity theft comes from offline sources such as personal information and documents thrown away by the trusting consumer in their usual trash disposal," said Harris Miller, ITAA president.

"While a small percentage of the problems come form online sources, recent email frauds have involved notifying a consumer about fictitious account problems and asking the individual to supply a user ID and password or other sensitive data. Scam artists then use the information to operate phoney auctions, purchase merchandise under an assumed name or conduct other illegal activity.

"Ultimately, the solution is a shared responsibility among industry, government and consumers to advance education and awareness, enforce stronger penalties and encourage co-operation within the industry and law enforcement to prevent the spread of this problem into e-commerce," he added.

The group will address four main areas:
— To expand public education campaigns against online identity theft to protect consumers.
— To help promote technology and self-help approaches for preventing and dealing with online identity theft.
— To document and share non-personal information about emerging online fraudulent activity to stay ahead of criminals and new forms of fraud.
— To work with the government to cultivate an environment that protects consumers and businesses and ensures enforcement and criminal penalties against cyber thieves.

Other members include the Business Software Alliance, ITTA (The Information Technology Association of America) which will be responsible for the group's administrative functions, McAfee, RSA security, TechNet, Verisign and Zone Labs.

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