Fraud

It’s not always easy to spot con artists. They invade your home through the telephone, computer, and mail; advertise in well-known newspapers and magazines; and come through your door. Most people think they’re too smart to fall for a scam, but the opposite is true.

The National Consumer League’s National Fraud Information Center reported that from January to September 2005, online auctions accounted for 42 percent of all complaints received. Far worse, the average loss was an astounding $1,129. The loss to consumers from identity theft was $5 billion in 2004, with an average loss of $400, $1,440 if the crime was committed online.

One particularly insidious type of crime preys on the goodwill of the American public: charity fraud, which increases at times of national tragedies and natural disasters. (According to the Better Business Bureau’s Wise Giving Alliance, Americans gave $200 billion to charity in 2000.) Anyone can fall victim to these crooks: Almost without fail, they’re well-mannered, friendly, and helpful—at least at first.

Tips

• Make sure you understand how an online auction works before you bid on merchandise.

• Investigate the seller as much as possible. Be wary if the seller has only a post office box address or an email address.

• Bid at auction houses only if there’s insurance to protect the buyer or an escrow account where your money will be held until you receive your merchandise.

• Always use a credit card for your auction purchase so that you can dispute the charge if necessary; never use a wire transfer, money order, or personal check.

• To protect yourself against exorbitant charges, make sure you know the shipping and handling charges up front.

• To foil identity thieves, never give out your Social Security number or other personal information.

• Shred all bills, bank statements, and “pre-approved” credit card offers before you put them in the trash.

• Don’t have new checks mailed to you at home; pick them up at the bank.

• When someone asks you for a contribution to a charity, call the charity and make sure it is soliciting in your neighborhood.

• Make your check out to the name of the charitable organization, never to the person who is doing the soliciting, and mail it directly to the charity.

 

Personal Safety

Many people cite crime and fear of crime as a determining factor in how they feel about their neighborhood, but in fact criminal victimization in 2004 was at its lowest level since 1973, according to the Justice Department’s Bureau of Justice Statistics.

Figures for murder, rape, robbery, and assault were highest in the early 1980s, peaking in 1982 at 52.3 victimizations per 1,000 people age 12 and over. But by 2004 this figure had dropped to 21.1 per 1,000. The decline in violent victimization was experienced by persons in every demographic category surveyed - gender, race, origin, and household income.

Young people ages 12 to 24 were still the victims of the most violent crimes (an average of 83.7 victimizations per 1,000 people), while those 65 or older were victimized at a much lower rate (9.1 per 1,000 persons). While violent crime was down, crimes that used modern technology were up: identity theft cost consumers some $5 billion in 2004, according to the U.S. Postal Service. Preventing crime is everyone’s business - children, youth, adults, and seniors must all work together to protect themselves, their families, and their neighborhoods.

Tips

• Ask law enforcement for a free home security survey.

• Make sure you have sturdy metal or solid wood doors at all entries into your home and that sliding glass and similar doors are properly secured.

• Trim the shrubbery around your doors and windows so crooks don’t have a place to hide.

• Do not give out personal information over the phone, through the mail, or over the Internet unless you have initiated the contact or know with whom you are dealing.

• If you’re a senior, use direct deposit for your Social Security check and other regular payments.

• If you notice someone following you when you’re driving, head for the nearest busy, brightly lighted area. Write down the license number and make and model of the car. Call 911 or your local emergency number.

• Always lock car doors and take the keys when you leave your car, even if you’ll be gone “just for a minute.”

• Don’t leave valuables in view in the car. Leave them in the trunk or, better yet, take them home immediately.

• As you walk down the street or through the parking garage, walk alertly and assertively. Don’t weigh yourself down with too many parcels. Take several loads to the car if necessary.

• If you carry a purse, hold it close to your body; if a wallet, keep it in a front pocket.

• Don’t display your cash or any other inviting targets such as pagers, cell phones, hand-held electronic games, or expensive jewelry and clothing.

• When traveling, carry only the credit and ATM cards you absolutely need. Leave the others at home, safely stored.

• Make sure your home is secure when you are traveling—all deadbolts locked, lights left on timers, newspapers stopped, and mail held at the post office or collected by a trusted neighbor who has your travel schedule.

 

 

Keep Your Identity To Yourself

What Is Identity Theft?

n      One person, using information gathered from some source, takes on the identity of another person without permission and conducts a variety of activities using that identity.

n      The intent is to use that identity for personal gain, generally with the intent to defraud others.

 

Why Worry About Identity Theft?

n      It is the fastest-growing crime in the nation.  More than 27,000 people a day fall victim. 

n      More than 10 million people are victimized by it each year,  the most victimized group being those between the ages of 19 and 29.

n      It can cost an average of 80 hours and more than $1,400 to clear up a simple case of identity theft that is caught early.

n      Some victims lose many thousands of dollars as well as their good credit rating and consumer reputations. 

n      It costs our economy $40 billion or more each year.  There were 73,000,000 lost or stolen ID's in 2006.

n      Deterrence and apprehension are not yet effective.  Prevention is the best defense.

n      There are jurisdictional problems concerning where the crime occurs.

n      It is an attractive crime to criminals because of its low risk and high return.

 

How Identity Theft Works

 

STEP 1—Getting the Identity

n      The thief or thieves look for information in any number of ways:

–         Discarded documents in the trash

–         Receipts from purchases

–         Lost or stolen wallets or purses

–         Online “phishing” for personal data

–         Stolen mail from mailboxes

–         Thieves are thinking of new, inventive ways  every day.

STEP 2—Exploiting the Identity (cont.)

n      The thief may simply begin leveraging one piece of information to obtain or establish other information or assets. These may include

–        New credit card accounts

–         State or local licenses

–        Accounts with utility companies, apartment leases, or even home mortgages

STEP 3—Discovering the Theft

n      The thief continues to build a “persona” using the victim’s name, good credit, and even good character references.  The thief never pays the bills, but the victim is left with a bad name and ruined credit.

n      Eventually, the victim tries to get a new credit account and is turned down, gets a bill for a credit card he or she never owned, or starts getting calls from bill collectors. 

n      The thief might abandon the victim’s identity because he or she has “spoiled” the name of the victim (e.g., with a criminal offense or bankruptcy).

n      When the crime or ruined credit is discovered, the victim is left to clean up the mess.

STEP 4—Reporting and Restoring

n      The victim reports it to the local police and to the nation’s major credit bureaus. 

n      The victim asks credit bureaus to note ID theft crime on his or her credit report. 

n      The victim may need to consult with a local victims’ assistance agency or an attorney for specific steps necessary in a given state.

n      The victim also files a complaint through the Federal Trade Commission registry at www.ftc.gov.

n      The victim completes an ID theft affidavit, available at www.ftc.gov

 

Where and How Do They Get My Information?

n      Telephone calls asking you to “update records”

n      Theft of incoming bills, which show your account number

n      Theft of outgoing mail and bill payments

n      Redirection of stolen mail, where the thief files a change of address on your credit card bills

n      “Phishing” in which the sender sends out an email or pop-up message that looks like it came from a real bank or credit card company and asks for identifying information. Legitimate groups will never do this.

n      They create a phony reason why you need to give them your  personal information (e.g., bank routing number, Social Security number).

n      They use the ease of online transactions to their advantage, hoping you will be fooled.

n      Going through trash to recover bills

      -Credit Card Skimmers - A waiter may use a small device to swipe your credit card and record the information on it.

n      Credit card receipts that you discard or toss out with a shopping bag

            Casual use of Social Security numbers and other similar identifiers

 

Why Is ID Theft on the Rise?

n      Computers have made record-keeping faster but have removed human analysis, making it easier for someone to steal an identity or pose as another person.

n      More and more transactions are being handled electronically, and that trend is continuing to increase dramatically.

n      More computer hackers now go for monetary returns, not for the thrill of conquering another computer.

n      Mobility means that many of us shop in stores all over our community, the region, or the country, so we are more anonymous than ever.

n      Many of us find it hard to believe that ID theft could happen to us, even though millions are victims each year.

 

What Can We Do About It?

n      Consumer education, like the information we’re sharing today, helps you reduce your risk of becoming a victim.

n      Education is an ongoing process as new techniques emerge.

n      Information about prevention and ways to stop ID theft spread quickly as well.

n      New ways are being found to tighten security on electronic payment systems and to detect “out of the ordinary” purchase patterns.

n      Some credit card payment systems now signal only the last four digits of your card number, so that someone who steals your receipt can’t steal your good name.

n      New shredders are coming onto the market, making thorough document destruction easier at home.

 

Who Is Vulnerable?

People who

n      Keep their money in bank accounts

n      Use credit or debit cards

n      Generate trash with unshredded paper in it

n      Casually toss credit card or other receipts into public receptacles

n      Get personal bills by mail or electronically

n      Don’t check their credit card reports and bank statements

n      Don’t regularly check their credit bureau reports

n      Have accessible mail boxes

 

Prevention

n      Check your bank, credit card, and similar statements monthly. Make sure you receive them, and make sure the charges are yours.

n      Immediately call your bank or credit card company if you don’t receive your bill.

n      Opt out of getting pre-approved credit solicitations by calling 1-888-5-OPTOUT

n      It's illegal for a telemarketer to call you if you've asked not to be called. In fact, the federal government has created the National Do Not Call Registry — the free, easy way to reduce the telemarketing calls you get at home. To register, or to get information, visit www.donotcall.gov, or call toll-free 1-888-382-1222 (TTY: 1-866-290-4236) from the phone you want to register. You will receive fewer telemarketing calls within three months of registering your number. It will stay in the registry for five years or until it is disconnected or you take it off the registry. After five years, you will be able to renew your registration.

n      NEVER provide account information over the Internet or the telephone unless you originated the call and unless you are absolutely certain of the party you are speaking to.

n      Rip up receipts if you will not need them for warranties or returns.

n      Shred any unwanted credit, loan, or credit card offers – or at least cut them up with scissors – before putting them in the trash.

n      Do not authorize others to use your credit cards.  They may not take the same care that you do.

n      Deposit mail in a U.S. Postal Service mailbox. 

n      Make sure your mailbox is secure.

 

How To Handle Identity Theft

n      File a police report immediately.  70% of the victims in 2006 never reported it to police.

n      Notify the three major credit bureaus and each of your credit or debit card issuers of the identity theft, and ask that appropriate alerts and closures be filed.

n      File a report with the Federal Trade Commission’s Complaint Center, and obtain an ID theft affidavit, which is available online at www.ftc.gov.

n      Check credit reports, immediately report any incorrect activity, and ensure that a fraud alert is still active on your account.

n      Carry copies of documents with you – the police report, the affidavit, and any other formal records that attest to your identity – in case of emergency.