Uncovering the Dark Side of the Digital World: The Black Market for Identity Data

Blog / The Digital Black Market for Identity Data

The digital age has brought with it many benefits, but it has also created new opportunities for criminals to profit from the illegal trade of personal information, including identity theft. The digital black market for identity verification data has become a thriving underground economy, where sensitive information such as Social Security numbers, credit card numbers, and login credentials are bought and sold for profit.

This type of crime is becoming increasingly prevalent as more personal information is stored online and accessible to cybercriminals. With the increasing reliance on technology, individuals are at greater risk of having their identity stolen, which can lead to significant financial loss and damage to their reputation.

In this article, we will take a closer look at the digital black market for identity data, including how it operates, the dangers it poses, and what individuals and organizations can do to protect themselves from identity fraud. Understanding the threat is the first step in staying safe in a digital world where personal information has become a valuable commodity.

What is the Dark Web?

The Dark Web is a hidden network of websites that exist on an encrypted network and can only be accessed using specialized software, such as the Tor browser. The anonymity provided by the Dark Web makes it a popular platform for illegal activities, such as the buying and selling of illegal drugs, weapons, and stolen personal information gained by identity theft on black market websites.

The Dark Web operates differently from the regular World Wide Web that we use every day, as it is not indexed by search engines and is not accessible through traditional browsers. This means that users must have a specific set of technical skills and knowledge to be able to access and navigate the Dark Web.

While the Dark Web is often associated with illegal activity, if it is also used for legitimate purposes, such as for whistleblowers to communicate with journalists securely or for political activists to communicate in countries where free speech is restricted.

It is important to note that the Dark Web is not a safe place and can be a dangerous environment for those who need to become more familiar with the technology and risks involved. The anonymity provided by the Dark Web can also attract criminals and hackers who are looking to exploit unsuspecting individuals.

Online businesses face types of fraud, including identity theft and financial loss. Explore the common types of online fraud

The Illicit Market for Personal Data: How Does it Operate?

Personal data is a valuable commodity in today's digital world, and the illicit market for this information is a major concern for individuals and organizations alike for identity verification. The dark web provides a platform for the purchase and sale of sensitive information, but it is also a place where users can remain anonymous and conceal their transactions. This lack of oversight and standard security measures makes it challenging to halt identity fraud or undo the harm done to customers.

Cybercriminals obtain personal data through various methods, including malware, phishing scams, and confidence tricks through emails, social media sites, and digital accounts. In some cases, cybercriminals may even gain access to business databases through large-scale hacks. In 2019 alone, over four billion data records were stolen through data breaches, a 54% increase from the previous year.

Once criminals have access to personal data, they may use it for their own purposes or trade it on the dark web. The anonymity and lack of supervision on the dark web make it a safe haven for cybercriminals to operate and profit from the illicit market for personal data with identity theft.

The Digital Black Market's Mechanics

Phase 1: Malware development to compromise consumers' internet security.

There is a company behind every virus, worm, bot, and other malware. Heads of criminal networks communicate with programmers to create malware, hackers to breach into networks, or other scammers and fraudsters to create spam and phishing assaults. The victims are often Windows users and online users who have been duped while searching for particular information, banking, or networking.

If you fall victim to one of their internet security hoaxes, your information may be kept on servers that hackers may access. They may use it to get into your accounts and engage with identity theft to steal your money, or they can sell it on the internet black market.

Phase 2: Involve the promotion of illicit internet goods.

The Internet black market, like legitimate commodities markets, is very competitive. To be lucrative, cybercriminals must advertise their "goods" to other criminals. They create promos, demonstrations, service guarantees, and even discounts for big "purchases," all of which are promoted on underground forums and, sometimes, social networks. This proves how identity fraud methods have become sophisticated recently.

Phase 3: The sales procedure

A cybercrook becomes intrigued by the offer of another cybercrook. What is the sales process like? Negotiate with the client/vendor through private chat or email using generic addresses. To distribute the goods, use existing underground internet shops. Determine the mode of payment, which should always be one that everyone utilizes, such as Western Union. If the product isn't functioning, contact customer service; for example, if a credit card number isn't valid, they'll replace it with one that is.

Phase 4: Money laundering

This stage relates to cybercriminals who steal money from customers' bank accounts via bank transfers after they breach identity verification processes. As you would expect, this is dirty money that must be cleaned before it can be utilized on legitimate markets. This is when additional victims join the picture: money mules lured in by cyber crooks through bogus employment promises. They are offered large rewards just for collecting stolen funds in their bank accounts and then transferring them to overseas accounts - cybercrooks' accounts. These victims' online security, as well as their physical security, is jeopardized.

Identity Verification is a tool for businesses since it may drastically limit cybercrime attack vectors.

Value of Personal Information 

Each piece of personal information has a cost for the identity verification steps. A Social Security number may be purchased for as low as $1. Credit cards, debit cards, and banking information may fetch up to $110. Usernames and passwords for non-financial institution logins cost $1, while login information for online payment systems may vary from $20 to $200.

Other kinds of information may fetch hundreds or thousands of dollars, such as:

When data is acquired as a result of a large data breach or a successful phishing effort, you can guarantee that even apparently tiny quantities pile up quickly.

Prices fluctuate, as they do in any marketplace, leaving the criminals waiting for the ideal opportunity to sell your data—it may be years before your stolen data is utilized. As a result, you may not discover a problem until a long time after the first event.

The Dangers of Using Stolen Identity Data

When criminals obtain personal information through hacking, phishing scams, or data breaches, they can use it to commit various forms of identity theft, such as:

  • Fraudulent bank transactions and transfers
  • Opening new credit card accounts
  • Taking out loans or mortgages
  • Filing false tax returns
  • Applying for government benefits

Using stolen identity data can have serious consequences for both the victim and the person using the stolen information. Victims of identity theft can experience financial loss, damage to their credit score, and a great deal of stress and frustration as they work to resolve the issue.

For those using the stolen information, the consequences can be severe, including criminal charges and imprisonment. Additionally, using stolen identity data can lead to long-term consequences, such as a tarnished reputation and difficulty obtaining employment, loans, or other financial services in the future.

As digital identity becomes more valuable, criminals are finding new ways to exploit it

Preventing Identity Theft: The Power of AI-Powered Automated Verification System

The irony of identity theft and financial crimes is that the vast majority of them occur because businesses leave the back door open for thieves owing to inadequate internal security measures. While data breaches and phishing assaults cannot be fully avoided, businesses can catch identity frauds by using automated identity verification systems.

These solutions, which are driven by AI technology, are used at the first step of client onboarding. When an identity thief tries to log in to a victim's bank account or patient health portal, AI models identify inconsistencies in the information to detect false or counterfeit identities. Furthermore, biometric facial recognition technology may be used to allow remote identity verification through face scans. These methods prevent identity theft during the early phases of account creation and enable businesses to comply with required Know Your Customer (KYC) requirements. 

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