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Stop Check Fraud with Security Checks

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How to Stop Check Fraud and Check Washing

stop check fraudCheck washing, a highly common form of check fraud, is the practice of removing legitimate check information, especially the “Pay To” name and the amount, and replacing it with data beneficial to the criminal (his own name or a larger amount) through chemical or electronic means.  One of the many ways to protect yourself against check fraud is so important that it deserves its very own article.

A foolproof way to protect your checks from being altered, whether by washing or by electronic means, is to use security checks offered by most companies.

Here are some of the features to look for when you’re purchasing High Security Checks.  These features will safeguard you not only against check washing, but other high tech forms of check fraud as well:

  • Safety security paper (visible and invisible fluorescent fibers, chemical-sensitive)
  • Foil hologram (cannot be reproduced by copiers or scanners)
  • High resolution border elements (intricate design is difficult to reproduce)
  • True watermark (cannot be reproduced by copiers or scanners)
  • Toner adhesion  (damage is visible if toner is lifted or scraped)
  • Void element (the word void appears if photocopied or chemically altered)
  • False positive test area (instant authenticity test with black light or counterfeit pen)
  • Complex pantograph background pattern and high-security colors
  • Thermochromatic ink (reacts to heat to deter copying)
  • Original document backing (deters cut and paste alteration attempts)
  • Chemical wash detection area (shows chemical alteration attempts)
  • Security warning box (becomes visible when photocopied)
  • Padlock icon (signifies that checks meet industry standards)

One more vital tip to foil the check washers: use a dark ink, gel-based pen, preferably one that states it is a security pen. Take a look at the video to the left to see how easy it is to wash a check if you are not using a high security gel-based pen. 

Yes, you may spend a few extra dollars for security checks and pens, but compared to the staggering cost of recovering from check-washing schemes (small businesses lose more than 7%  of their annual revenue to check fraud  – over $600 billion), it’s a drop in the bucket!  Your peace of mind and saved recovery time are worth it.

Checks Unlimited provides personal Securiguard checks with 7 advanced security features including chemical protective paper, microprint signature lines, and a 2 dimensional holographic foil that is irreproducible on copiers or scanners.  Their Security Center also offers fraud prevention tips and security products!

John Sileo is CEO of The Sileo Group, and a  keynote speaker on cyber security, identity theft and business fraud prevention. His clients included the Department of Defense, Pfizer, and Homeland Security. See his recent media appearances on 60 Minutes, Anderson Cooper and Fox Business.

 

Identity Thieves Score Billions from the IRS and Taxpayers

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Every dollar counts, now more than ever, as the government searches for ways to wisely spend our money. It’s dismaying to learn that an audit report from the Treasury Inspector General for Tax Administration (TIGTA) has found that the impact of identity theft on tax administration is significantly greater than the amount the IRS detects and prevents. Even worse, the “IRS uses little of the data from identity theft cases…to detect and prevent future tax refund fraud” according to Mike Godfrey, Tax-News.

  • The IRS is detecting far fewer fake tax returns than are actually falsely filed. 938,700 were detected in 2011. On the other hand, TIGTA identified 1.5M additional undetected tax returns in 2011 with potentially fraudulent tax refunds totaling in excess of $5.2B.
  • The study predicted that the IRS stands to lose $21B in revenue over the next 5 years with new fraud controls, or $26B without the new controls.
  • Key victims include the deceased, children, or someone who would not normally file a return such as lower income individuals that are not legally required to file.
  • A Postal Inspector in Florida uncovered a tax refund scheme whereby refunds were going into debit-card accounts via thieves using the social security numbers (SSN) of dead people. Direct deposit is preferred as it doesn’t require a mailing address, photo ID, name or a trip to the bank.
  • The IRS allows multiple direct deposits to the same bank account. A key finding in the report showed hundreds of tax returns were filed from a single address. In one case, 2,137 returns resulted in $3.3M in refunds to a home in Lansing, Michigan, and 518 returns resulted in $1.8M in refunds to a home in Tampa, Florida.
  • The IRS lacks access to 3rd party information to verify returns and root out fraud. It is issuing refunds in January before it can verify data from employers and financial institutions in March. This gap provides a huge window of opportunity for thieves.
  • The IRS is not gathering enough information to prevent fraud; i.e., how the return is filed, income information on the W-2, the amount of the refund and where the refund is sent.
  • New screening filters that can identify false tax returns before they are processed have the potential to diminish the number of fraud cases as well as other ongoing anti-fraud procedures employed by the IRS. It is placing a unique identity theft indicator on the accounts of the deceased. As of March, 2012, 164,000 accounts were locked, possibly preventing $1.8M in fraud.

Charles Boustany, the US House of Representatives Oversight Subcommitte Chairman, who sent a letter to the IRS demanding a full accounting for the agency’s continued inability to stop tax fraud related to identity theft, declared that “this report raises serious questions regarding the IRS’s ability to detect tax fraud…”. The lost federal money is extremely troubling but there’s another loss to consider – the potential to erode taxpayer confidence in our system of tax administration.


John Sileo is an award-winning author and international speaker on the dark art of deception (identity theft, data privacy, social media manipulation) and its polar opposite, the powerful use of trust, to achieve success. He is CEO of The Sileo Group, which advises teams on how to multiply performance by building a culture of deep trust. His clients include the Department of Defense, Pfizer, the FDIC, and Homeland Security. Sample his Keynote Presentation or watch him on Anderson Cooper, 60 Minutes or Fox Business. 1.800.258.8076.

Child ID Theft Expert: Your Child is 51X More Likely to Become Victim

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Allowing our children the innocence of their childhood is paramount to us as parents.  Because our children are pretty much the center of our universe, we want to do everything in our power to keep them safe and to safeguard their futures. In this information age, identity theft has become global in its reach and can have devastating consequences for our children’s futures if we’re not vigilant from the day they acquire a Social Security number.

Why are our kids, the very people we most want to protect, so vulnerable? Because they have unused, unblemished credit profiles. Richard Power, Distinguished Fellow, Carnegie Mellon CyLab, recently published the first ever child identity theft report based on identity protection scans of over 40,000 U.S. children. It is extremely alarming that 10.2% of the children in the report had someone else using their Social Security numbers. That figure is 51 times higher than the rate for adults of the same population.

We take so many steps to protect our children. But how often do you check their credit report? “Check my kid’s …credit report?,” I can hear you say. “She is only seven! She doesn’t even have her front teeth yet, let alone a credit card! There are so many years to go before we need to worry about that. Right?”

Unfortunately, no. Because children have untouched and unblemished credit records, they are highly attractive targets. Child identity theft is profitable, hard to detect and a nightmare to recover. Thieves steal a child’s identity early on, nurture it until they have a solid credit score, and then abuse and discard it. If it’s not discovered in time, fraudulent use of your child’s identity could mean the loss of educational and job opportunities and starting off adulthood at a serious disadvantage with someone else’s bad credit in her name. All an identity thief needs to ruin your child’s bright financial future is her name and Social Security Number.

“Shouldn’t my child’s age show up on any credit background check, shouldn’t the merchant recognize that the person in front of them buying a car on credit isn’t seven years old?” you ask. Yes, it should, but the people screening the credit report rarely give it the time and care necessary to detect fraud.

All too often, background checks involve simply matching the name and the Social Security number provided. This leaves doors wide open for scandalous minds to wreak havoc on your child’s perfect credit. The most unsettling part is that the age of the applicant (in this case, the person posing as your child) becomes official with the credit bureaus upon the first credit application. This makes clearing a sabotaged credit record even more difficult because you have to prove to the credit bureau that your child is only seven and isn’t responsible for thousands of dollars of debt.

In no time at all, your child could have a maxed out credit card, unpaid bills and a huge mortgage for beachfront property across the country. You might not discover the illegal purchases until your child opens a bank account, applies for a job, tries to get a driver’s license or enters college. At that point, you are left with the time-consuming dilemma of cleaning up someone else’s fraudulent mess. If only clearing up a credit report was as easy as cleaning up after your kids.

Do the gaping holes in our current credit system and the audacity of criminals leave you enraged? They should. It is imperative that you use your anger as fuel to protect and prepare your children’s future before it is too late. In Part II of this series, we will talk about the specific steps to take in order to protect your child from identity theft.

John Sileo lost almost a half-million dollars, his business and his reputation to identity theft. Since then, he’s become America’s leading keynote speaker on identity theft, social media exposure and weapons of manipulation. His clients include the Department of Defense, Pfizer and Homeland Security. To learn more, visit ThinkLikeASpy.com.

 

Child Identity Theft (Part II)

If you missed the first part of this series, please visit Child Identity Theft  (Part I).

Child Identity theft is the fastest growing sector of the identity theft “industry,” and the numbers are staggering. Although it’s difficult to estimate exactly how many children lose their identities since the crime can go undetected for years, the FTC states that 5% of identity theft cases target children, which translates into 500,000 kidnapped child identities per year, and growing. The Carnegie Mellon CyLab Report states that in 54% of the cases, the child was under the age of 14.

The identity thief is not always a stranger. In many cases, it’s a relative with bad credit who takes advantage of a child’s pristine credit. Conveniently, these family members generally have access to the information necessary to maximize the fraud with little attention. This seems absurd, but imagine a parent who is strapped for cash, has a bad credit score and needs to buy groceries. In this case, short-term thinking blinds the relative or friend to long-term consequences. In other instances, the child’s future is not taken into consideration at all.

Frankly, it doesn’t take much to get the crime underway; all a criminal needs is the child’s name and Social Security number. These pieces of personal information are exposed in a variety of ways:

  • When registering for daycare, schools and recreational sports
  • On medical, dental and hospital records
  • When joining organizations like the Girl Scouts, Boy Scouts, etc.
  • When the above information is permanently stored and accessed by volunteers or employees
  • When one of the above organizations is breached by a hacker or malicious software
  • When an adult befriends your child on a social networking site (MySpace, Facebook) and eventually socially engineers private information out of them

The Three Basic Types of Child Identity Theft

  1. Financial identity theft occurs when the name and Social Security number is used to establish new lines of credit.
  2. Criminal identity theft happens when the criminal uses the child’s identity to obtain a driver’s license or substitutes the child’s identity if caught in a criminal act.
  3. Identity cloning entails using a child’s identity (via information collection or a black market ‘purchase’ of personal information) for medical, financial, criminal and governmental purposes. The most common form of cloned identity theft is committed on behalf of undocumented workers looking for an identity that will keep them working in this country.

For parents, cleaning up the disaster of identity theft for their children is costly and incredibly time consuming. Getting a new Social Security number is almost impossible, and rarely the best option.

Taking steps right now to protect your child from this horrible crime is one of the greatest investments you will ever make in their financial and emotional future.

Protecting Your Children

Acting now on behalf of your child will protect them from consequences common to child victims:

  • Starting adulthood with a credit rating low enough to scare away the hungriest of loan sharks
  • Being denied a first loan, credit card or apartment rental because of a crime committed 10-15 years earlier (the passage of time makes this crime very hard to clear up)
  • Being denied access to college or a new job
  • Having a warrant out for her arrest for crimes that she didn’t commit

In the same way that you can’t protect your children from every bruise and scrape, you can’t entirely remove the risk of identity theft. You can, however, prevent or soften the fall if it does happen. Take these steps first:

  1. Watch for mail in your child’s name. This is a potential sign that credit has been established using their identity. The most common types of mail that signal identity theft are financial (pre-approved credit cards, etc.).
  2. Consider ordering a free credit report for your child. If you suspect foul play, write to the three credit reporting bureaus (Equifax, Experian and TransUnion) to see if your child has a credit profile (no profile, no chance that it is being used illegally). If they do have an active credit profile, you will need to resolve this with the specific credit bureau. Please note that requesting your child’s credit report repeatedly can actually establish a credit profile in their name. For a more convenient option, use an identity monitoring service for you and your family that alerts you when credit is established in any of your names.
  3. Stop giving out your child’s personal information. Until you are confident that it is absolutely necessary to receive the services desired, withhold their personal information. More than 80% of organizations that ask for your child’s Social Security number don’t actually need it to establish services. If you must give it, ask them how they will use it, how long they will keep it and how it will be protected while they have it.
  4. Protect your child’s identity documents. Birth certificates, passports, bank account information, wills and trusts involving children should all be locked securely in a fire-safe or bank’s safety deposit box. Physical document theft is one of the most prevalent ways kid’s identities are stolen.
  5. If you find evidence of fraudulent activity, contact the police, the source of the fraud and all three credit bureaus. Filing a police report helps to establish your child’s innocence in an official way.Have the credit bureaus FREEZE your child’s credit for maximum protection. Keep detailed records of all correspondence between yourself, the police, the merchant and the credit bureaus. It will come in handy should you ever find yourself in court, as I did.
  6. Educate your children on the importance of protecting their personal information. Teach them about the value of their personal information: their name, address, phone numbers, email address, Social Security Number and any passwords and PIN numbers. Reinforce that they own their private information and that it should not be shared with friends, over the internet or with anyone whom they don’t know or trust.Education is absolutely the best financial gift you will ever give to them.

In the case of child identity theft, an ounce of prevention is worth a lifetime of financial security. Don’t let the center of your universe become just another statistic. Because you love and protect your children as much as I do, start this process immediately.

John Sileo lost almost a half-million dollars, his business and his reputation to identity theft. Since then, he’s become America’s leading keynote speaker on identity theft, social media exposure and weapons of manipulation. His clients include the Department of Defense, Pfizer and Homeland Security. To learn more, visit ThinkLikeASpy.com.

Study Shows Identity Theft of Children 51X More Likely

Based on a recent assessment of 40,000+ SSNs of children, it was found that more than 10% those SSNs were being used by someone other than the child, far in excess of the rate of misuse in the adult population. The study points out the major issues that surround child identity theft and why we need to start paying attention now. It is more prevalent than many think and the threat is growing. Here are a few of the statistics that were found:

  • 4,311 or 10.2% of the children in the report had someone else using their Social Security number – 51 times higher than the 0.2% rate for adults in the same population
  • Child IDs were used to purchase homes and automobiles, open credit card accounts, secure employment and obtain driver’s licenses
  • The largest fraud ($725,000) was committed against a 16 year old girl
  • The youngest victim was five months old; 303 victims were under the age of five

Read the Entire Report

Parents need to stop ignoring child identity theft. It is one thing to ignore it for yourself, but failing to protect children, who are otherwise helpless to this crime, shows a definite lack of parental responsibility.

Acting now on behalf of your child will protect them from consequences common to child victims. Click on Child Identity Theft Protection Tips to learn more about the steps you should take.

 

John Sileo’s motivational keynote speeches train organizations to play aggressive information offense before the attack, whether that is identity theft, data breach, cyber crime, social networking exposure or human fraud. Learn more at www.ThinkLikeASpy.com or call him directly on 800.258.8076.

 

Fraud Statistics – Colorado High on Scam Scale

Last week a list of 10 most scammed states was released, and Colorado ranks #3. The statistics, based on information from the Federal Trade Commission.  According to their report, Coloradans receive more scam invitations via email, mail and phone than most other states. Add to this the number of new victims thanks to all of our information sharing on social networking sites like Facebook, and identity theft becomes relatively easy.

Here are the rankings for the top 10 states: 1. Washington D.C., 2. Nevada, 3. Colorado, 4. Maryland, 5. Florida, 6. Arizona, 7. Oregon, 8. Washington, 9. Delaware, 10. California

While many people think of scams that affect their pocket book directly, most thieves want to steal an entire identity from their victims. They are looking for as many pieces of personal information as possible, including: full name, Social Security number, address, phone number, mothers maiden name and passwords. This type of information allows them to use your identity to take out loans and purchase houses, not just wipe out your savings account or spend a bit on your credit cards.

The study found 412.4 fraud complaints and 95 identity theft victims for every 100,000 Coloradans. Some other Identity Theft Statistics include:

  • Identity Theft counts for 21% of all fraud cases, followed by Third Party Creditor and Debt Collection Scams.
  • 40% of fraud complaints were from credit cards while 21% were from wire transfers.
  • 48% of network fraud complaints came via email.
  • 25% of victims were between the ages of 40-49.
  • There were a total of 25,497 victims in Colorado and 25% of those complaints were regarding employment fraud.
  • 62% of victims notified the police department regarding the fraud. This means that victims are starting to take charge of their identities and that the awareness level on this topic is increasing.

There are several ways to monitor your identity to minimize the chances you are a victim of identity theft:

  • Check your bank, brokerage and credit card statements regularly.
  • Set up automatic account alerts (banks, credit cards, brokerages) so that you are notified anytime a transaction occurs on your account (allowing you to catch fraudulent transactions quickly).
  • Monitor your credit report for free at AnnualCreditReport.com once every 3 months. Make sure that every loan, account and credit card on your report is legitimate. The next time you  check your credit report, make sure nothing fraudulent has been added.
  • Sign up for a sophisticated identity monitoring service.

John Sileo is the award-winning author of the identity theft prevention book Privacy Means Profit and speaks on information control, identity theft prevention and data breach avoidance. His clients include the Department of Defense, Pfizer and the FDIC. To learn more, contact him directly on 800.258.8076.

Identity Theft Statistics: Online Shopping & Cyber-Intrusion

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According to a new survey, most online consumers are not taking the proper precautions when shopping online, putting them at a far higher risk of cyber-fraud. 75% of participants thought that a firewall alone could protect them while online. 62% of those polled thought that anti-virus software was enough protection to stop spy-ware. Are you part of these statistics?

While firewalls and anti-virus software are two important aspects of protecting yourself online, there is much more you need to do to keep yourself safe.

Here are additional statistics from the survey:

  • While online, 45% of consumers are most concerned about identity theft,  41% about privacy,  and 45% about computer viruses.
  • While 28% of consumers thought that their identities were secure on mobile devices, most are more aware that their mobile devices are also vulnerable to malicious cyber-crime.
  • 85% of those polled knew that they were being profiled by advertisers through their internet activity. This shows how high our tolerance is for cyber-intrusion into our private lives.
  • 85% also said they were aware they were actively being stalked by cyber-criminals. It amazes me that the awareness can be so high and yet people continue to utilize the internet without a great deal of real concern.

Here are a few tips to help you protect your Identity online.

  • Have a plan that includes privacy and identity protection (perhaps [intlink id=”2172″ type=”post”]identity monitoring[/intlink]) , computer system ssecurity software, browser protection, and a fraud alert service.
  • Hide your IP address. An IP address reveals seemingly harmless information such as your city, state, zip code, and what browser you’re using, which can be exploited by online thieves. Consider installing software that hides your IP address, and therefore your identity and online activities, from criminals, search engines, and advertisers.
  • Use Wi-Fi protection. Virus protection and protection against malicious software don’t protect you from cyber-criminals who might be lurking on unsecured connections. Make sure that you don’t reveal any sensitive identity information (passwords, bank account numbers, etc) while on an unsecured Wi-Fi connection.
  • Think twice before you type. Posts are permanent, public and exploitable! Sometimes by talking about your cat, Mr. Kitty you are revealing more than just his sleeping patterns, you may be revealing your email password.

John Sileo speaks on information control, identity theft prevention and data breach avoidance. His clients include the Department of Defense, Pfizer and the FDIC. To learn more, contact him directly on 800.258.8076.

Identity Theft Prevention this Holiday Season

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AAA Hawaii’s Annual Holiday Season Travel and Shopping Poll of 250 local residents reveals that 76% plan to primarily shop this holiday with credit or debit cards. However, almost four in ten of surveyed shoppers have little or no concern about identity fraud happening to them this holiday shopping season! Identity theft is rampant throughout the holiday season. Over the past 3 years stolen data being used in less than one week jumped from 33% to 71%, meaning that they steal today and shop today.  Identity thieves count on our lackadaisical attitude toward monitoring our wealth.

Not only does legitimate business pick up during the holiday season, but Identity theft and fraudulent Business seems to be on the rise as well. Especially during these hard economic times Identity thieves are on the prowl more than ever looking for a quick fix to their financial problems.  It is just not possible to observe and ward off every threat to our identity. There will be documents that you forget to destroy or lock up, accounts that you won’t cancel, checks that you will mail, and waiters that will disappear with your credit card. It is not practical to think that we can cover every situation that threatens the safety of our identity. But we are not helpless in these situations.

Like an experienced spy, we have a solid backup plan. It is extremely important to monitor the key components of our identity especially during the Holidays. Over 50% of all Identity theft is self detected. Here are a few tips to stay safe and keep an eye out for Identity Fraud this Holiday Season:

Monitor Your Credit Report Look for any suspicious activity or unknown accounts. If you find anything new that you haven’t applied for contact the responsible financial institution immediately.

Credit Monitoring Services Services that companies offer make it easy to ensure that fraudsters aren’t accessing your personal information, accounts, or credit. Allowing them to do it for you will put you more at ease this Holiday Season.

Sign up for Account Alerts This way you will know immediately if anyone is making fraudulent charges on your account.

Switch to Online Statements This way you can more easily access your accounts throughout the month rather than waiting until the end of the month for a statement.

 

Read More About Protecting Your Identity During the Holidays.

John Sileo became America’s Top Identity Theft Speaker & Expert after he lost his business and more than $300,000 to identity theft and data breach. His clients include the Department of Defense, Pfizer and the FDIC. To learn more about bringing John to your next meeting or event, contact him directly on 800.258.8076.

Identity Theft Statistics & Holiday Shopping

Identity theft statistics, dry as melba toast, have something to teach us about shopping this Holiday season. Listening to the media, you would think that the Internet and cybercrime are to blame for most cases of identity theft. They are biased toward technology stories because they are new and interesting (actually, they are starting to get old). If it’s not hackers and phishers, then its war driving and key logging.

But their technological bias is Wrong.

Cybercrime only accounts for 11% of actual identity fraud cases in the latest Javelin study and online shopping accounts for a meager 1%!

When it comes to victims having their identity stolen while making in-store purchases, women have a 94% incident rate and men only 43%. Women tend to shop more in stores, men online.
There is an important lesson in this confusion between reality and perception: don’t automatically believe everything you hear, especially in the media.  It’s sexy to write about cybercrime, but the disproportionate amount of attention it receives gives us a false sense that it is the leading cause of identity theft. As you start your holiday shopping, don’t be afraid to shop online, but only if you have protected your computer and internet connection properly.

Here’s what you need to know:

  • Technology plays a smaller role in identity theft than we perceive
  • Most known cases of fraud are committed when the criminal has direct, physical access to the victim’s information
  • 43% of identity theft cases are the result of a lost or stolen wallet, checkbook, credit card or physical document
  • Friends and family members end up being the thief in a significant number of identity theft cases

– Statistics from The 2009 Identity Fraud Survey, Javelin Research

John Sileo speaks around the world on identity theft, privacy, social networking exposure, cyber crime, social engineering and other topics of information survival. His clients include the Department of Defense, Blue Cross, FDIC, Pfizer and hundreds of organizations of all sizes. He also coaches select clients on information survival. Contact him directly on 800.258.8076.

15 Data Security Tips to Protect Your Small Business

Thanks to SmallBusinessComputing.com and Jennifer Schiff for this article!

In August 2010, the Privacy Rights Clearinghouse published its latest Chronology of Data Breaches, which showed that since 2005 more than a half-billion sensitive records have been breached. Of those breached records — which contained such sensitive data as customer credit card or social security numbers — approximately one-fifth came from retailers, merchants and other types of non-financial, non-insurance-related businesses, the majority of which were small to midsized.

An equally scary statistic: approximately 80 percent of small businesses that experience a data breach go bankrupt or suffer severe financial losses within two years of a security breach, according to John Sileo, a professional identity theft consultant and speaker, who knows firsthand about the havoc a security breach can wreak on a small business.

What can a small business owner do to protect her business from a security breach? Small Business Computing spoke with two security and privacy experts and consulted the leading security and privacy sites to find out. The good news: protecting your business from a data security threat is easier than you think. It’s also much cheaper than the physical, financial and emotional cost of repairing one.

Click Here to Continue Reading……

John Sileo speaks professionally about social media exposure, identity theft and cyber crime for the Department of Defense, Fortune 1000 companies and any organization that wants to protect the profitability of their private information. Contact him directly on 800.258.8076 or visit his financial speaker’s website.