We've all heard the standard tips aboutpreventing identity theft and credit card fraud. But what would a real identitythief tell you if he had the chance? Dan DeFelippi, who was convicted of creditcard fraud and ID theft in 2004, says simply this: You can't be too careful.

DeFelippi, 29, mostly made fake credit cards withreal credit card information he bought online. "I would make fake IDs to gowith them, and then I'd buy laptops or other expensive items in the store and sellthem on eBay," he says. DeFelippi was also involved in several other kinds ofscams, including phishing schemes that exploited AOL and PayPal customers. Committingcredit card fraud is still "ridiculously easy to do," he says. "Anyone with acomputer and $100 could start making money tomorrow."

After his conviction, DeFelippi faced eight yearsin prison, but under a plea deal he agreed to community service and to pay backmore than $200,000 in restitution. He also worked for the U.S. Secret Service,helping to infiltrate the online underground and training agents in the latestfraud techniques. His help led to the arrests of five to 15 people over twoyears. Today, he's a Web developer at a graphic design company in Rochester,N.Y. He agreed to take an hour with CreditCards.com to share his story and his toptips on how to protect yourself.

CreditCards.com:How did you get started?
DanDeFilippi: When I was in middle school and high school, I was into what Iwould call innocent hacking. I wasn't trying to be malicious or make money. Iwas just interested to see what I could do. In college, I started selling fakeIDs to make a little extra money. I was pretty active in online chat roomswhere people would talk about this stuff, and I began to realize there was awhole world of credit card fraud where I could make a lot of money with verylittle effort. From there, it was just a huge downward spiral.

CreditCards.com:You said you bought credit card data online. Tell me about that.
DeFilippi: Everycredit card has magnetic stripe on the back with data on it. There are peopleout there who hack into computers where that data is being stored. There arealso people like waitresses and waiters with handheld skimmers who steal thedata that way. Then they sell the data online. I'd pay $10 to $50 for theinformation from one card. Then I'd use an encoder to put that data on a fake card,go into a store and purchase stuff.

CreditCards.com:Do identity thieves like some credit cards better than others?
DeFilippi: Well,a lot of American Express cards have no set limit, so you'd be able to buy alot more. However, the downside is that a lot of merchants require moresecurity for American Express than for other cards. They may ask you to enterthe four-digit code on the front of the card or your ZIP code. That informationusually isn't in the magnetic stripe information. So if a card is skimmed, ifsomeone has its magnetic stripe information, they would still need the number onthe front or your ZIP code to commit fraud.

CreditCards.com:What about debit cards?
DeFilippi: Ialways recommend against them. With debit cards, it's your real money in yourbank account you're playing with. So if someone gets your debit cardinformation and uses it, your cash is gone until you fill out a lot of paperworkand persuade the bank to give it back to you. Credit cards are much better atprotecting you against fraud. And if you're worried about debt, you can alwayspay them off every month.

CreditCards.com: What's your No. 1 tip on how consumers can protect themselves?
DeFilippi: You've probably heard this before, but themost important thing really is to watch your accounts. And I don't mean justchecking your statement once a month. If you're only checking your statementonce a month, someone can start using your card at the beginning of the billingcycle, and they can do a lot of damage before you catch it. You're talkingthousands of dollars, and it will be a lot harder to catch them and dispute it.I use Mint.com, which is a free aggregation service that allows you to put allyour accounts on there and monitor everything at once. I check that every day.It's also a good idea to check your credit report at least twice a year to makesure no one has stolen your identity.

CreditCards.com:Is online shopping safe?
DeFilippi: You'vegot to be careful. It is really easyto create a fake online store or to create a store that sells stuff, but itsreal purpose is to collect credit card information. I'd try to stick toreputable sites or at least to sites that have reviews. A lot of times they'll createthese stores that sell things that are widely searched for at prices that areincredibly low. If a deal is way too good to be true, it's probably a scam andthey just want your information. The more information a website asks for, themore you need to be certain that this is information they really need and it'sa legitimate site. Also, don't buy anything from somebody e-mailing you, nomatter how good the offer sounds. If a company is sending you an ad throughe-mail and you've never heard of the company, don't buy anything from them.

CreditCards.com:How did your phishing scams work?
DeFilippi:People are much savvier now. Back when I started, it wasn't that common. I wasgetting thousands and thousands of responses from single mailings. The firstone I did, I targeted AOL users, because I thought they would be less computerliterate and more likely to fall for my scams. We said, "Your credit cardinformation has expired. Come to this site and update your information or youraccount will be closed."  I did somethingsimilar with PayPal. I sent an e-mail that said, "Someone has accessed youraccount. We've locked your account. Please click here to access your account."We'd link them to a fake website and they'd give us their PayPal log-ininformation. Then we'd say, "For security purposes we've removed your account information.Please re-enter it."

CreditCards.com:Where did you get the e-mail addresses for your phishing schemes?
DeFilippi: There's software that allows you to harvestthem from anyone who has posted their e-mail addresses online, so don't ever putyour e-mail address on a website. If I was targeting a specific group, I'd tryto find e-mails for that group. For the PayPal scam, I was trying to findpeople around my age or younger, so I targeted college and universities. I lookedfor ones in Massachusetts because I could make fake IDs from Massachusetts. Aspart of the scam, I'd get their date of birth, address, Social Security numberand driver's license number. Then I could make a fake ID that had all accurateinformation on it. The only thing that wouldn't be real would be my picture.It's kind of scary how much information I could get.

CreditCards.com:What other mistakes do consumers make on the Web?
DeFilippi: Whenyou're using your computer online, it's sending data back and forth between yourcomputer and website. If someone gains access to that connection -- it's calledsniffing -- they can capture the data between you and the website you'recommunicating with. That's the reason it's so important to access securewebsites if you're putting in any sensitive data, so look for "https" in the Web address. A more recent issue is the free wireless offered all over theplace. If you're using an open Wi-Fi connection, you should pretty much have theexpectation that there is no security.

CreditCards.com:What steps do you take to protect your own data online?
DeFilippi:All financial services companies have two-factor authentication. So youtypically have to put in a password plus something else. A lot of banks usequestions, but that can actually give you a false sense of security because youcan find out a lot of information about people online. So maybe this isextreme, but for those questions, I make up stuff. I don't put in my realinformation. For example, a common question is: "What city were you marriedin?" Well, I'm not married, but I'll answer that question so there's no wayanyone could possibly know the answer. I try to make sure at least one of thequestions has a made-up answer.

CreditCards.com:What's your advice on using ATMs?
DeFilippi: ATMskimming is the big thing right now because it's cash, and cash is king.Basically, that's where someone puts a card reader on the ATM machine, capturesyour PIN, then goes and drains your bank account. The skimmer device goes overthe card slot, and it's designed to look like part of the ATM. Some of theequipment now is very good and it's hard to tell the difference between thatand a real machine. So what you need to do is try to use the same ATM everytime, and watch out for anything on the machine that looks out of the ordinary,especially something stuck on the front where you put your card in. Generally,I like to use ATM machines at banks rather than convenience stores or a bar orclub. There have been incidents where thieves installed their own ATM machinesin places with skimmers inside them. That's much less likely to happen at abank.

CreditCards.com:Is there more the banking industry could do to protect us?
DeFilippi: Thebiggest thing they could do is get away from using magnetic stripes. They aren'tthat secure and anyone can get a magnetic stripe reader (a skimmer) for $5 to$10. The smart chips that are widely used in Europe and internationally aremuch more secure and harder to hack. They offer near 100 percent protectionagainst fraud, at least from a skimming point of view, and they also require a PIN.But the credit card companies have done the math. They think people will usetheir credit cards less often if they had to put in a PIN. It might eliminate alot of the fraud, but there would be less card use and they would end up losingmoney. So they're actually doing just the opposite, moving to a system whereyou can just have your credit card in your pocket -- you don't even have toswipe it to use it. The problem is, that's very unsecure. Anyone with equipmentcan sit out in their car and pick that up.

CreditCards.com:How did you end up getting caught?
DeFilippi:I went to Best Buy with a guy I was working with locally to buy a laptop, andthe manager there was pretty well trained. When he swiped the card, he askedfor my friend's ID. Most stores don't ask for ID.  My friend gave him his fake driver's license,but then when the manager swiped the credit card, it came up "Call forauthorization." A call for authorization, if you're trying to commit credit cardfraud, is really bad; it means the credit card company has seen suspiciousactivity. The manager said he needed to go to the front desk to finishprocessing the order. As soon as he left, we walked as quickly as possible tothe exit and left the store. The problem was, my friend had given the managerhis fake ID with his picture. They ran it on the news and caught him. He toldthem the whole story, so they ended up catching me, too. I really was betteroff getting caught when I did. I was lucky I didn't go to prison. Under theguidelines now, I'd probably have to serve at least two years. So anything Ican do to help people now, to help compensate for what I've done, I'm trying todo.

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