Understanding Identity Theft

Transcription

1 Understanding Identity Theft Learn How to Protect Yourself and Your Business A FREE E-book by the Nations Authority on Collecting Money, Michelle Dunn

2 Understanding Identity Theft, learn how to protect yourself and your business Never Dunn Publishing, LLC Plymouth, New Hampshire By Michelle Dunn 2008 Michelle Dunn Published by: Never Dunn Publishing LLC PO Box 40 Plymouth, NH All rights reserved. No part of this book may be reproduced in any form or by any means, without written permission by the author and publisher. This book is designed to provide accurate and authoritive information in regard to the subject matter covered. It is distributed with the understanding that the author is not engaged in rendering legal advice or services. If legal advice is required, please see your attorney. 1

3 Printed in the United States of America. This book is designed to provide information to help you deal with identity theft. It is sold with the understanding that the publisher and author are not giving legal, accounting or other professional advice or services. The content of this book is based on my own personal research and experience. If legal or other assistance is required, please see your attorney or accountant. Every effort has been made to make this book as accurate as possible. However, there may be mistakes. This book is sold as a guide with what information is current as of the date of the original printing. January This book is sold to provide information and guidance. Never Dunn Publishing, LLC and Michelle Dunn shall have no liability or responsibility to any person or entity for any damage or alleged damage caused directly or indirectly by the information contained in this book. Copyright Michelle Dunn No parts of this book can be copies or reproduced without the written permission of the author. 2

4 Table of Contents Chapter One How the new Red Flag Rules impact your business and 11 things you need to do about it now Chapter Two Are you at Risk for Identity Theft? Learn How to Protect Yourself Chapter Three How can you tell if a money order is fraudulent? Chapter Four How do these people get my name? Chapter Five How can I prevent Identity Theft from happening to me? Chapter Six What can you do If you are a victim of Identity theft? Chapter Seven Resources 3

5 Chapter One How the new Red Flag Rules impact your business and 11 things you need to do about it now The Red Flag Rules are rules that apply to financial institutions and creditors who offer or maintain one or more covered accounts. The rules specifically mandate that these financial institutions and creditors create and implement identity theft prevention programs to identify, detect and respond to patterns, practices or specific activities that could indicate identity theft. The Red Flag Rule was developed in accordance with the Fair and Accurate Credit Transactions Act of Under the rule, financial institutions and creditors with covered accounts, accounts that involve making payments on account, must have identity theft prevention programs to identify anything that could lead to identity theft. If you extend credit to your customers or clients, you will have to follow these Red Flag Rules which will be enforced by the Fair Trade Commission and will be in effect on May 1, According to the FTC, any entity that regularly extends, renews or continues credit, or any creditor that is involved in the decision to extend credit must comply with this rule. Examples of creditors who may need to put the Red Flag Rules into place for their businesses are: Finance companies Automotive dealers Mortgage brokers Utility companies Oil companies Telecommunications companies Just what are the Red Flags? According to the FTC s final rule, the red flags can be but are not limited to: Alerts, notifications or warnings from a consumer credit reporting agency. Suspicious documents, such as those that may appear to be forged. Suspicious personal information, such as a social security number that is off, or doesn t exist, or is listed on the Social Security Administrations Death Master File. Receiving requests for new, additional or replacement credit cards, debit cards, cell phones or adding authorized users after receiving a change of address form. Address discrepancies Unusual credit activity, such as increased inquiries. Signatures that are inconsistent with information on file. Information on an ID not matching any address on a credit report. 4

6 Drastic changes in payment patterns. Mail being returned for an undeliverable address yet the account is being used. Customers reporting that they are not receiving bills or statements. The FTC estimates that as many as 9 million Americans have their identities stolen each year, leading to over $56.6 billion in costs. According to the Better Business Bureau, the average amount lost to fraud per case has increased from $5,249 in 2003 to $6,383 in If you are a business that extends credit to customers and do not comply with the Red Flag Rules a civil penalty ca be up to $2,500 per violation to be enforced by the FTC. The FTC will enforce the Red Flag Rules based on consumer complaints. What you can do to comply: 1. Keep customers sensitive personal information secure. 2. Take stock what personal information do you have in your files and computer. 3. Clean out and throw away any outdated or personal information on customers that you no longer need buy a shredder. 4. Write a plan that is easy to follow and that will help you to respond to any security incidents. 5. Require employees to log out in computer programs that have personal customer information, after they are done accessing that information. 6. Use only one computer to store personal customer information and limit access to it. 7. Keep up to date on alerts and vulnerabilities to your computer by visiting 8. Never give out any personal customer information over the phone or in s. 9. Change computer passwords frequently 10. Train employees, visit for a tutorial or If you outsource any business functions- investigate that company s data security policies and practices and compare them to yours, visit their facilities if possible. If you have signed credit applications, personal guarantees, or any paperwork with personal information for your customers, keep it under lock and key. This can include invoices, receipts or statements. Take stock of what personal information you have in your file cabinets, computers, laptops, flash drives, disks, s and anywhere else your company stores sensitive data, Once you have a clear picture of what you are dealing with, it will be much easier to create a plan. Decide who in your business will have access to this information and who will not. Make a firm decision and enforce it. Limit who has a key and limit the number of keys. 5

7 When you are taking stock, if you find you don t need some of the personal information you have on some customers, get rid of it. Shred it and toss it. This paperwork might look like a bunch of trash to you but it is a gold mine for an identity thief! When you are putting your plan into writing remember to list who to notify in the event of a security incident. This might include the customer, or consumer, law enforcement, your attorney, the credit bureaus or other business owners that might be affected by a breach. Your plan doesn t have to be long and complicated, it should be written according to your company s size and complexity. Your plan must: Designate one or more employees to coordinate the information security program, or be in charge of the program. Identify and assess any risks to customer information and evaluate the effectiveness of your current safeguards for controlling those risks. Write and implement a safeguards program, as well as monitor and test it regularly. For example, what will you do if someone s identity is stolen and what do you do now to prevent identity theft? Screen service providers that meet your security measures and make sure they maintain those safeguards, and oversee their handling of your customer s personal information. Evaluate and adjust the plan as things change within your business, with the law or as the result of security testing and monitoring. Your plan can be a single page, or multiple pages with many chapters. Make sure you identify any unique risks your company might have, depending on the nature of your business. If you have employees that work from home, research and write a specific plan for those computers, s and employees. 6

8 Chapter Two Are you at Risk for Identity Theft? Learn How to Protect Yourself Identity Theft is America s fastest growing type of robbery. There have been an estimated 9.9 million victims in America and over 40% of all consumer complaints in the U.S. involve identity theft. About half of the victims do not know how the thief obtained their personal information. The Boston Globe and Newsweek have both covered Identity theft telling us how important it is for us to educate ourselves on preventing and protecting ourselves from this type of robbery. Identity theft can happen anytime, anywhere and to anyone, individuals or businesses. Everyone must be educated and aware so it can be avoided. Michael Blanchard, US Postal Inspector says postal money orders and business or certified checks are one way you can be at risk. Most identity theft involves the U.S. Mail which is why the U.S. Postal Inspection Service is a lead agency in investigating Identity Theft. Identity Theft is a criminal offense. Some scams are internet related, you go into a chat room and chat with people there, someone approaches you as a friend, or about an auction. You become comfortable with these people you are chatting with and start a friendship. The person who has befriended you may tell you such things as, I am in the Peace Corp, and I have a money order that I can t cash where I am, which is Lagos or Nigeria. They may ask you if they send you the money order, if you will cash it and send them the money. This is a scam. The money order you receive can be fraudulent, once you cash and send the money you are out this money once the bank realizes the money order was no good. Another scenario might be if you sell items at online auctions. Someone may you about your item that is for sale. They will tell you that they want to purchase your item, and they are in Nigeria so they will send you extra money to pay for a shipper to send the item to them. They will send you a counterfeit money order or check and ask you to cash eh check and wire the extra money to them so they can pay the shippers to ship your item. They may even ask you to go to a bank to cash the money order rather than the post office. The reason for this is that the post office has a machine that can tell if the money order if fake and they have much more experience with money orders than banks do. Many of these types of scams originate in Nigeria, London and Toronto. If you are aware of this, you can prevent this from happening to you. Most thieves still obtain personal information through traditional rather than electronic channels. In the cases where the method was known, 68.2% of information was obtained off-line versus only 11.6% obtained online. If you receive a fraudulent money order and take it to a bank, rather than the post office, a bank can take a month or more before they notify you that the money order is fake. If this happens, you are then responsible for the funds. If you do get caught up in this 7

9 situation, take your money order to a post office rather than a bank, it is not guaranteeing you will not be taken but it lowers your chances. Chapter Three How can you tell if a money order is fraudulent? Fake money orders to not have a water mark. Hold up the money order to the window or light, can you see the portrait, on the left side? This portrait needs to be backlit by light to be seen and cannot be mimicked. Some producers of fake money orders try to use fake pictures as a water mark; you will be able to tell if you hold it up to the light. These money orders are generally printed in Nigeria, they use the same offset press we use to print real money orders, so check your money orders! You can also check for type size, color and fonts. Another step you can take is to call or go online to the Post Office and give them the serial number off of the money order; they can tell if it is real. If you receive a counterfeit money order, you will want to give it to the post office or police. Possession of a counterfeit item is a felony. Other scams include receiving an or letter stating you have won a lottery, or a prize notification. Some letters or announcements will arrive with a counterfeit check and you pay a processing fee to get the prize. These checks are counterfeit; never send money to anyone who is asking for money from you in order to give you money, whether it is disguised as a prize or lottery. Any prize that requires you to pay anything is no prize. Chapter Four How do these people get my name? If you have a credit card, your name is sold to third parties, if you do not want this to happen, you must contact your credit card companies to inform them that you do not want your information sold. Check the privacy notice that comes with your bill. If you enter contests, your information becomes public. Also, when you buy a new product, and fill out the warranty cards, those companies sell that information you provide to other companies. Since when does your toaster manufacturer need to know your households 8

10 annual income to extend a warranty on your toaster? Thieves use dumpster digging, phishing, and pharming to obtain your information. Things they steal from your trash include: Pre-approved credit card offers they complete them and have the card send to them at a different address. Loan applications they complete the application and have the money sent to a phony address. Bank statements they then have your bank account number and can print counterfeit checks. Becky Palmer, a Consumer Credit Counselor, knew of someone who had their wallet stolen, and they used the credit card to buy a $ gift card at Wal mart, this then becomes very hard to trace. People that are more at risk are senior citizens, people with disabilities and immigrants, but remember that everyone, including children are at risk. Senior citizens are home all day; they might get a phone call from a fake charity asking for money. Immigrants are desperate for credit, they may have just arrive din the US and know they need credit to do anything and are not aware of these scams. People with disabilities are home, and may become a victim of phone or online fraud. There have also been cases of home care providers taking advantage of their clients. Remember, it is not always a stranger that can steal someone s identity. Di you know children can be victims of identity theft? This could affect or ruin their credit before they even are able to build up credit for themselves. There have been cases of parents using a child s name for their electric bill or phone bill when they have bad credit or owe the utility company money. Thieves will obtain the social security number of these children then use that number to get credit cards and rack up purchases. Some of these scammers will call you and say they are form a factious charity. They will offer to have your contribution automatically deducted from your checking account and will ask for your routing number, bank name and account number. DO NOT GIVE OUT THIS INFORMATION! If you pick up a call from a telemarketer, ask them the following questions and if they are a fraud, they will hang up quickly: Who do you work for? They will try to give you the name of the fake charity here, so ask them, Who pays your salary? How much of my donation (percentage) goes to this charity and what is the rest of the money used for? If they are for real, they can easily give you this information. What is the charity s full name, address, phone number and website? Once you have the above information you can check with the state attorney generals office or secretary of state to see if the charity is registered. Also check the charity s rating thru the Better Business Bureau at 9

11 Chapter Five How can I prevent Identity Theft from happening to me? Never leave your receipt or slip in the ATM or gas pump. Pay attention to your habits, lock up or organize and file your bills and bank statements. Shred them using a cross shredder before throwing them away. Some steps you can take to avoid becoming a victim of Identity Theft are: Get a copy of your credit report from all three credit bureaus. Opt out of mailing lists by contacting the credit bureaus. Opt out by reading eh privacy notice that comes with your credit card and following the instructions. Call the National Do Not Call Registry at or visit and be sure to call from the number you want to register. Do not carry your Social Security Card in your wallet. Do not print your Social Security number on your checks. Do not get your Social Security number printed on your driver s license. Do not carry your medicade card with you, Medicade # s are your Social Security number. Delete any s from Nigeria, or lottery or prize notifications, do not open them. Stop credit card offers by calling OPT-OUT Remove your name from National mailing lists by visiting Install firewall and virus protection software on your computer. Password protect your computer and private personal files. Format your hard drive or physically destroy it when disposing of your old computer. When you order new checks, get your first initial printed on them instead of your first name. Use a cross shredder to shred your bills and bank statements or any junk mail. Bring your mail to the post office or a secure mail box rather than leaving it in a rural box. Use only one designated credit card for online purchases. Be sure all online purchases are made through a secure server notice the lock icon and how the URL address changes from http to https. The S means SECURE. Do not carry your PIN# in your wallet. Do not use your date of birth as a password or PIN. Do not give out personal or financial information over the phone. Grind up or shred back up CD s you are throwing away. 10

12 Check your online banking account at least 3 times a week and change your password often. Chapter Six What can you do if you are already a victim of ID theft? Contact the fraud departments of the three major credit bureaus, to place a fraud alert on your credit file. Close all accounts that have been affected and request copies of frau-dispute forms and complete and return them immediately. KEEP COPIES! File a police report in each jurisdiction the theft occurred. Send copies of the report tot your creditors or anyone that requires proof of the crime. File a complaint with the FTC at or call 800- IDTHEFT and the post office. Contact the Identity Theft Resource Center at or Request a new driver s license from the state of motor vehicles and have a fraud report attached to your driving record. Notify check-verification firms about any fraudulent checks: International check service Call CALL-FCC and file a complaint. Change your passwords and PIN immediately. Be aware that 40 million crooks obtained credit card numbers this past year, Be Suspicious ; also be aware that most identity theft is not reported, especially when it involves family members, so the statistics are off. These statistics show that consumers lost $5 billion last year when in actuality it is closer to $50 billion. There have been an estimated 9.9 million victims in America. 11

13 Chapter Seven RESOURCES For more information on the rules or to educate yourself or your staff contact Michael Barnett at Barnett Training, or visit the FTC website at U.S. Postal Inspection Service Federal Trade Commission IDTHEFT or TTY U.S. Secret Service Department of Justice Federal Deposit Insurance Corporation Equifax Experian Trans Union Training or 12

14 About Michelle Dunn Michelle Dunn helps companies that want to have customers that pay on time or early, she works with companies that are struggling with customers that pay late or don t pay. Michelle has over 21 years experience in credit & debt collection, is the author many books and possesses a depth of knowledge and a whole tool kit of products and services that can make a big difference for your company 13