Tag Archive for: John Sileo

Is CHIP & PIN Credit Card Security Worth $100M? (Are You Serious?)

I’ve had dozens of media requests for interviews and countless more email inquiries from people concerned about the Target data breach.  At first, everyone just wanted to know details of how it happened, how big the breach was, and what they should do about it if their credit cards were at risk.  Now that the initial shock of it is over, we are on to a bigger question:

How do we keep breach from negatively affecting so many Americans? 

Breach will always happen. If it’s digital, it’s hackable. It’s coming to light that the Target breach may have been due to the computer access an HVAC WORKER (no, not an entire company, an individual WORKER) had to Target’s systems. While there is no guaranteed way of preventing fraud, there is a pretty reliable answer out there, and it’s been around for decades.  That answer is for the US to finally catch up to more than 80 countries around the world and start using chip and PIN enabled credit cards, also known as EMV, smart cards, or microchip cards.

By placing microchips in credit cards, it makes it much harder for criminals to clone the cards than the relatively easy-to-crack magnetic stripes.  Chip cards take the cardholder information and turn it into a unique code for each transaction. They also often require additional authentication, such a personal identification number, or PIN. So in the case of the Target breach, the stolen data couldn’t be used to easily create duplicate credit cards, drastically reducing the value of the stolen data. The possibility for online abuse of the numbers (known as Card Not Present transactions) would remain a threat from the breach, but it would be a fraction of the problem (and solvable in other ways).

France has been using this technology since 1982, the UK since 2001, and Canada since 2007. In the first five years after the UK started using chip & PIN, fraud went down 70%.  In that same time period, the cost for fraud in the US had DOUBLED. It’s not that the technology is perfect, it’s that the increased security convinces criminals to target those who don’t use the technology (which to this point has only been, well, the United States). 

If there is such a great guarantee on fraud reduction by switching to chip and PIN cards, why is the US resisting it?  The answer:  MONEY.  Banks, credit card companies, and retailers have been caught in a battle of wills for many years now, with retailers not wanting to spend money on installing new chip-friendly card readers unless banks are committed to spending money on issuing new cards.

The cost of implementing the card system can be staggering. Target is expected to spend around $100 million to install new chip card readers in an effort to protect against cyber theft.

So is it worth $100 million to implement chip and PIN technology?

Without question. And even Target thinks so, or at least it did ten years ago when it was at the forefront of implementing chip & PIN technology.  From 2001-2004 they spent $40 million to adopt chip-based credit-card technology and installed 37,000 new point-of-sale terminals to handle chip cards across its U.S. stores.

Ultimately they backed out because their marketing strategy at the time just didn’t catch on with consumers and because it was taking “A FEW SECONDS” longer per customer to get through the line.  I don’t know about you, but I’d wait an extra two seconds in order to know my data is secure.  And I bet Target victims would take back the time it is taking them to change their credit card information with every online site or monthly automatic payment company their now-compromised card was used for.

To put the cost in perspective, $100 million is about $1.00 per Target breach customer. I bet the average credit card holder would be willing to foot the $1 bill to dramatically reduce their risk (even if it’s not a perfect solution). In fact, the cost of fraud gets passed on to customers anyway (higher credit card rates, higher retail prices), so why not spend that same money (or far less, in fact) on securing the transactions in the first place? 

  • A survey of 936 credit unions indicates the Target breach has cost credit unions an average of about $5.10 per card affected by the security lapse.  The Credit Union National Association said these costs most likely do not include any fraud losses, which are likely to occur later.
  • In 2012, the Ponemon Institute’s annual study showed the average cost of a data breach in the US is $188 per person notified.
  • For credit issuers, the average cost per record breached is set at $280.
  • Aite Group reports that card fraud in the U.S. already costs the card payment industry (primarily issuers) $8.6 billion a year.

 You tell me if it’s worth it! (Seriously, I want your thoughts and comments below)

How do we get there?

It seems crystal clear to me that fraudsters have gotten so sophisticated that we either need to join together (retailers, banks, and credit card companies) or we will fail to stop this trend of Mega-Breaches.  Pardon the pun, but clearly we have put the “target” on our own backs; criminals have increasingly focused on the US because we are so far behind.

James Dimon, CEO of J.P. Morgan Chase sees this as an opportunity for real change.  He said,  “All of us have a common interest in being protected, so this might be a chance for retailers and banks to for once work together, as opposed to sue each other like we’ve been doing the last decade.”

I see 4 overarching steps that need to be taken:

  1. Retailers, credit card processors, banks, VISA, MasterCard and American Express need to stop focusing on their own self-interest (profit) and start to work together for the common good. Of course, they won’t do this without incentive, so…
  2. Congress should create  a U.S. equivalent of the U.K. Card Association that sets policy and has the authority to fine those stakeholders who fail to act.
  3. In other words, we will need legislation to ensure that the “liability shift” dates projected for 2015 are met.  This means that if credit card companies have issued chip and PIN cards, but retailers have not installed machines to read them, the merchants would be held accountable for any losses due to fraud.
  4. Everyone needs to understand that there will be costs associated with the change, just like there are costs when you install a security system, a lock on a door or a vault in a bank.

Will chip and PIN cost retailers? Yes. Will chip and PIN cost banks? Yes. Will it cost consumers? Yes. Will it cost (in total) as much as the fraud resulting from even a single major breach like Target. NO. It’s time to start thinking about security from a long-term perspective, and long-term profitability will follow.

John Sileo is an author and highly engaging speaker on internet privacy, identity theft and technology security. He is CEO of The Sileo Group, which helps organizations to protect the privacy that drives their profitability. His recent engagements include presentations at The Pentagon, Visa, Homeland Security and Northrop Grumman as well as media appearances on Rachael Ray, 60 Minutes, Anderson Cooper and Fox Business. Contact him directly on 800.258.8076.

Benefits and Risks of Wearable Technology

Over the next ten years, wearable technology could change the way you live even more than smartphones have. Wearable technology combines all of the tracking, collecting and communicating power of current mobile devices with an intimate level of personal information captured in real-time. Common wearables include: Fitness Bands, GPS-enabled Cameras, Digital Glasses, Medical Devices and Smart Watches. Wearable technology can be a force for good, but you need to consider the privacy and security implications of the devices as well.

For the moment, wearable technology is more like a trendy hobby for early adopters than it is a means of recording highly accurate & useful information. In the future, businesses will likely utilize wearables to monitor everything from hours spent working to employee whereabouts throughout the day. It is this enterprise usage that will ultimately fuel the adoption of wearable technology in the consumer market. For now, your smart watch is a fun and shiny object with a few killer apps much like the computer back when email was introduced. Ten years from now, you might wonder how you lived without the increased convenience and connectivity.

John Sileo is an an award-winning author and keynote speaker on identity theft, internet privacy, fraud training & technology defense. John specializes in making security entertaining, so that it works. John is CEO of The Sileo Group, whose clients include the Pentagon, Visa, Homeland Security & Pfizer. John’s body of work includes appearances on 60 Minutes, Rachael Ray, Anderson Cooper & Fox Business. Contact him directly on 800.258.8076.

Going on Vacation? How to Keep Travel Identity Theft from Ruining Your Trip!

Click Here for a Downloadable and Printable
25 Point Travel Safety Checklist (PDF)

Here are the same tips in text format

Before you go:

  • Only book through a legitimate agency or website, as there are many travel scams out there. Read the fine print before signing.
  • Pay for your travel arrangements with a credit card – it gives you some control in disputing charges.
  • Stop your mail before leaving so that data thieves aren’t opening your financial mail for you.
  • Turn on automatic account alerts on your credit card to easily monitor all transaction (via smartphone) without having to look at statements.
  • Turn on remote tracking and wiping software on your phone so that if it is lost, you can locate and/or wipe the data off from anywhere.
  • Make sure that your laptop computer has long, strong, alpha-numeric password encryption (BitLocker for Windows, FileVault for Mac).
  • Leave most of your identity at home, especially checkbooks, Social Security cards and excess credit and debit cards.
  • Take your passport (if international), driver’s license (use this for ID, not your passport), credit card and a dedicated ATM/debit card with enough money in the account to cover your trip. I recommend these as backup and cash as your main form of payment. This limits your exposure to exactly how much you have on you.
  • Make a photocopy of those items, front and back, in case of loss. Take the photocopy with you (store separately) in case you lose your ID.
  • Request a nameless, travel-only ATM/debit card with a 4-digit PIN from your bank.
  • Never post on social network sites that you are leaving (it let’s robbers know you aren’t home) and refrain from posting pictures on the road until you return. Secure your home as much as possible with lights, locks and alarms.

On the road:

  • Protect your identity and small devices in a travel wallet or secure pocket. Pickpockets can open backpacks and purses without your ever knowing.
  • Free Wi-Fi hotspots are simple for thieves to eavesdrop on. Instead, surf on your cellular data plan (call your provider for international data plans and “tethering” instructions).
  • Never type anything sensitive on a public computer (hotel, cafe, library) as your data is probably being recorded and possibly exploited.
  • Be obsessive about keeping control of your smartphone, as it’s a mobile computer connected to your wealth. Turn on the passcode, enable remote tracking and never leave it lying around or loan it out, especially in public.
  • At ATMs, make sure that there isn’t a skimming device attached by wiggling anything that sticks out from the machine. Shield your PIN# from those behind you and never let anyone help you get money out, pay for tickets, etc.
  • Lock your digital devices, valuables and traveling papers in your hotel room safe when you don’t need them.
  • For added protection, put the privacy sign on your door and let housekeeping know that you don’t want service. Unmade beds are better than stolen documents or devices.
  • Never give credit card or other information over the phone in your hotel – many scams look like the front desk calling for your information.

Back home:

  • Review credit card statements for any fraudulent charges that happen after the fact (common).
  • Turn off your dedicated ATM/debit card.
  • Restart your mail and make sure no critical statements are missing.
  • Turn off your international data plan.

See our whole series on Travel Safety Tips to Prevent Identity Theft!

John Sileo is an an award-winning author and keynote speaker on identity theft and cyber security. John specializes in making security entertaining, so that it works. John is CEO of The Sileo Group, whose clients include the Pentagon, Visa, Homeland Security & Pfizer. John’s body of work includes appearances on 60 Minutes, Rachael Ray, Anderson Cooper & Fox Business. Contact him directly on 800.258.8076.

Travel Safety Tips Part 4

You’ve made it home safely after braving gastronomic adventures at greasy spoons, drinking from questionable water sources, and surviving white-knuckled taxi rides.  Now, post those vacation pictures on social media and wrap up the loose ends of protecting your identity.

Monitor Your Accounts: Shortly after you return from your travels, pay special attention to your account statements to make sure that nothing out of the ordinary appears. If a credit card number or bank account number was stolen during your trip, this is how you will catch it early and keep it from becoming a major nightmare. Contact your provider and alert them to the breach immediately.

Get a credit report: Hopefully you’ve monitored your accounts throughout the trip.  When you get home, request a report at www.annualcreditreport.com.  Check your credit report for any suspicious activity. Even if you don’t see any unfamiliar transactions, that still doesn’t mean you’re safe.Identity thieves are known to take their time and act when you least expect it, so continue monitoring!

Rotate Your Account Numbers: If you feel like your identity might have been compromised (e.g., your credit card number stolen), call your financial institution and have them issue a new card. This makes the old number obsolete, should anyone try to use it in the future.  Also, turn off your dedicated travel ATM/debit card.

If you have used your international data plan, be sure to turn it off.

Pick Up the Mail: Don’t leave it in anyone else’s hands any longer than necessary. Make sure you shred any mail that you no longer need.

(Click here if you missed the first three posts: “Planning Your Trip”, “Before you go” or “On the Road”.)

I know this may seem like a LOT to do, but the peace of mind you will have knowing you’ve done all you can to protect yourself will make your vacation just that much more enjoyable.  Happy trails!

John Sileo is an an award-winning author and keynote speaker on identity theft, internet privacy, fraud training & technology defense. John specializes in making security entertaining, so that it works. John is CEO of The Sileo Group, whose clients include the Pentagon, Visa, Homeland Security & Pfizer. John’s body of work includes appearances on 60 Minutes, Rachael Ray, Anderson Cooper & Fox Business. Contact him directly on 800.258.8076.

Travel Safety Tips Part 3

Welcome to the third (and longest!) part of our four-part series on travel safety. We’ve covered “Planning Your Trip” and what to do “Before You Go” Today we’ll go through the many important things to consider while you’re “On the Road”.  Be sure to check back tomorrow for our final installment of what to do “When You Return”.

Travel Light:  If you don’t have to take it with you, increase your safety and leave it at home.  This includes:

Checkbooks: Do not carry checks or take only one or two for an emergency, placing them with your cash in your money belt. Checking account takeover is one of the simplest crimes to commit and one of the most devastating types of financial fraud from which to recover. The easy alternative? Use a credit card or cash.

Debit cards: You can reduce your vulnerability to having your checking account plundered while on vacation by leaving all debit cards (check cards) at home. Don’t be fooled into thinking that Debit/ATM cards are safe just because they have a PIN or password. Be aware, too, that debit cards don’t have the same financial fraud protections as most credit cards.

The Solution?  Actually, you have two!  You can get a nameless, travel-only ATM/debit card with a 4 digit pin from your bank.  Or you can ask your bank for an ATM-Only debit card (it won’t work in stores, only at an ATM) and make sure your password isn’t seen by roaming eyes when you are at the ATM.

Better yet, use a credit card or cash.  The exception to this is when you are traveling in a foreign country and your debit card is the most efficient way of obtaining cash from an ATM.

Excess credit cards:  Every piece of identity you take with you creates more avenues for potential fraud. I recommend that if you are traveling with another adult, you each take one credit card. (If possible, take cards from two different credit card companies. That way, you each carry only one card that can be lost or stolen, but you have a backup card if the other person’s card is lost, stolen or shut down because of fraud).  Make sure that your credit card company knows the dates and places you are traveling so that they don’t shut it down when charges are made out of town. Also, make sure you have a large enough credit line to cover your purchases while traveling. You can ask for a phone number you can call from overseas if your card doesn’t list one. The 800 number on the back of your card might not work outside the U.S.

Social Security card: It is not necessary to have your Social Security card while traveling (or at any time other than your first day of work with a new employer), so leave it locked up at home.

Bills: Don’t try to take bills to pay while traveling.
 Instead, schedule all payments before you go.

Identity Documents: Leave birth certificates, passports (unless travelling internationally), library cards, receipts, etc. at home while you travel. Anything you don’t absolutely need should be left at home locked in a fire safe. If you can travel with only a credit card, driver’s license and health insurance card (as long as it doesn’t have your SSN on it), you will be much safer.  Also, don’t put all of your info on your luggage.  A last name and phone number will suffice.

Boarding Passes: Tear up and throw away used boarding passes (or shred if you can). Those boarding passes so many of us leave behind in airplanes or hotels often contain full names and other personal information.

Excess digital gadgets: The more gadgets you bring, the more potential for theft.  Keep it simple.

Guard your devices

Passcodes: Smartphones and tablets carry as much information as laptops. Turn on the auto-lock passcode to keep others out of your data.  Also make sure that your laptop computer has long, strong, alpha-numeric password encryption(BitLocker for Windows, FileVault for Mac).

Public Access Internet Facilities: While using your laptop to access online banking or other password-protected services from Wi-Fi networks, be sure the Wi-Fi hotspots are secure. If you’re using a public computer in hotel business centers or cyber-cafes, never access any sensitive information.  Key-loggers (software that can track your keystrokes) may be tracking you.
 Better yet, install tethering between your mobile phone and tablet or laptop so that you are surfing securely.

Ask for Privacy: Instead of leaving oodles of data exposed in your hotel room (a major source of theft), hang your privacy sign on the door and let house cleaning know that you do not want to be disturbed. Lowering traffic lowers risk.

Have a plan for a stolen phone: Enable your phone’s GPS locator and “wipe” function (if available). Many phones have a setting you can switch on that helps you locate the phone via GPS if it’s stolen. Similarly, the “wipe” feature will let you wipe your data clean if it’s stolen.

Social Media:  Turn off your location settings and try to refrain from gloating about your glorious trip by posting pictures until you’ve returned safely home.

 Use the hotel safe

I can’t emphasize enough the importance of using the in-room safes that are now a part of almost every hotel room. They are easy to use and significantly increase traveling safety (decreasing theft by cleaning staff and other travelers). In addition to your traditional items such as jewelry or extra cash, use them for:

All important devices: your laptop, cell phone, tablet, iPod, thumb drive, etc.

Passports: Unless you are traveling in a country where you it is mandatory to keep your passport with you at all times, lock it up in the safe the whole time you are staying at the hotel.

Other Identity Documents: Store your plane tickets, receipts, and any other identity documents (birth certificates, extra credit cards, visa, etc.) in the safe when not in use.

Beware of scams

Hotel credit card scam: The way this typically works is that while you are sleeping, you receive a call “from the hotel’s front desk”.  The pleasant “night clerk” informs you their system has crashed and they need your credit card number to complete a night audit.  Do not give them your information over the phone.  If they don’t relent,  walk down to the desk!

Message about fraud: If you get a phone call or e-mail about suspicious activity on your card, call the customer service number on the back of your credit card instead of automatically calling back the number on the message.  That’s a common ploy by ID thieves to capture personal information. If the call was legitimate, you will be connected to the appropriate department.

Other Time-tested Tips

Mind the Lions at the Watering Hole: Increase your awareness in airports, hotels, conferences and restaurants.  Remember, where there is a crowd, there is a pickpocket, just waiting for you to be too busy with your camera or map to notice their activities. Be on the lookout also for untrustworthy passengers on the plane, especially shoulder surfers who watch you enter login credentials, PINs, credit card numbers and other personal data on your laptop, smartphone or tablet in the hopes of catching something they can use later to steal your identity.

Carry it Safely: I recommend carrying all of your identity documents (passport, credit card, driver’s license, tickets, etc.) in a travel pouch that fits around your neck or your waste (and inside of your clothing). It is a minor inconvenience, but it lowers instances of pick pocketing and unintentional misplacement. Thieves have unbelievably nimble fingers that can slip into your pocket or purse undetected so here’s an essential habit to cultivate: just before you leave your hotel room (especially in cities), verify that your money pouch is securely fastened around your waist or neck, under your clothes.

Use a Backpack: When possible, carry laptops and other large identity-storing items in a backpack that stays zipped and on your back at all times. It is easy to set down a purse, book bag or piece of luggage while at a ticket counter or retail store. Backpacks, on the other hand, are easy to keep on our person at all times, and are harder to break into without alerting the wearer.

Watch Your Cards: When paying with a credit card in a restaurant, try to keep your eye on the card. If the server removes it from sight, they may be able to create a “clone” by using a portable card skimmer that will copy the information from the card’s magnetic strip. Many restaurants are now able to process the card at your table or you can take it to the register and observe the transaction.

 ATM Machines: Use your “ATM Only” card (one that requires a PIN and does not contain a Visa or MasterCard logo) at ATM machines found at banks or credit unions that are in well-lit areas. Be sure to examine the ATM machine carefully for signs of tampering. Be on the lookout for anything that looks suspicious. Save all transaction receipts in a specific envelope to make it easy to reconcile your bank statement when you arrive home.

Use a Dedicated Travel E-mail Address: I shake my head every time when I see messages arrive from overseas via work e-mail accounts. If someone gets access to your work e-mail account, the amount of damage they could do to your livelihood is inestimable. Certainly there are times when you need to log in to your work account, but you will want to use caution in the extreme at those times.

My suggestion is to use a personal e-mail address when possible while traveling, one at which you store no sensitive information and at which a fake log-in won’t be disastrous, and communicate from that e-mail address exclusively. On occasion you will see addresses like johndoetravelemail@gmail.com; this travel-exclusive e-mail method can work quite well.

If you’re not using Bluetooth, turn it off: Some thieves can “hack” into your phone through Bluetooth, so if you’re not actively using it, turn it off!

John Sileo is an an award-winning author and keynote speaker on identity theft, internet privacy, fraud training & technology defense. John specializes in making security entertaining, so that it works. John is CEO of The Sileo Group, whose clients include the Pentagon, Visa, Homeland Security & Pfizer. John’s body of work includes appearances on 60 Minutes, Rachael Ray, Anderson Cooper & Fox Business. Contact him directly on 800.258.8076.

Travel Safety Tips Part 2

This is part two of our four-part series on travel safety.  Yesterday we covered “Planning Your Trip” and in the next few days we’ll discuss “On the Road” and “When You Return”.  For today, we’ll look at steps to take after your trip is planned, but before you go.

Photocopy the contents of your wallet/documents: Or make a list of all the contents and all your travel documents to carry with you in a protected place as you travel. It’s also a good idea to leave a copy at home with a trustworthy person whom you can contact. It will save you hours of frustration if anything is lost or stolen.

Protect your accounts: Place a travel alert on your credit card accounts so the bank will know why charges from some lovely resort are suddenly showing up.  You can also freeze your credit so no new accounts can be opened while you are away.   Finally, turn on automatic account alerts on your credit card to easily monitor all transaction (via smartphone) without having to look at statements.

Hold the Mail: Your mailbox is an identity jackpot. Before you leave, place a “postal hold” on your mail so that your mailbox isn’t susceptible while you are gone. Arrange with your post office that you (or your spouse) are the only people allowed to pick up your mail. Don’t have it “mass-delivered” the day after you return, as this puts everything at risk all at once. Instead, pick it up at the post office once you return.  (Hold your newspaper, too, so you’re not publicizing that no one is home.)

Social Networking Sites: Don’t post your “Going on Vacation” status on your social networking sites just as you wouldn’t tack a note about it to your front door. Broadcasting this news opens the door to criminals using that information while you are away. Think twice about anything you share on social networking sites.

Secure your home: Of course you will lock all your doors and secure your windows, but make sure you also check your office and other places where you might have identity-rich information sitting around. Store all important documents and items, maybe even your external hard drive with all of your files backed up on it, in a locked safe. 

John Sileo is an an award-winning author and keynote speaker on identity theft, internet privacy, fraud training & technology defense. John specializes in making security entertaining, so that it works. John is CEO of The Sileo Group, whose clients include the Pentagon, Visa, Homeland Security & Pfizer. John’s body of work includes appearances on 60 Minutes, Rachael Ray, Anderson Cooper & Fox Business. Contact him directly on 800.258.8076.

Travel Safety Tips Part 1

Today I begin a four-part series on travel safety to protect your identity before during and after your trip.  I’ve tried to make this series comprehensive for all stages of travel.  Today we’ll cover Planning Your Trip  , to be followed in days to come by:  Before You Go, On the Road and When You Return.

While you may be aware of the basics, the lists in these blogs show you how to think like the criminals think.  Be proactive and outwit them at their own game!

Use a legitimate agency: Verify the business you are booking your trip through. If you are going to use a travel agency or online booking company, make sure they are authentic first. Go online and do your research – if people have been swindled before by the company, the Internet is the first place they will go to vent. You can even ask the company for references so you can check up on some satisfied customers.  Also, investigate the travel companies with the Better Business Bureau (www.bbb.org) and the attorney general’s office in the state where the company does business. (www.naag.org).

Read everything carefully before you sign: Sometimes there are concealed fees or clauses where they can change the airport you are flying into or out of without telling you – even up to 100 miles away!  Make sure you know the airline and hotel before signing. This way you can confirm their legitimacy. Feel free to contact them and make sure that this is a great deal.

Always pay with a credit card: Reputable credit card companies allow you to dispute fraudulent charges so that you are not held liable for the money. If the company requires you to pay with cash or check or money order, GO SOMEPLACE ELSE! Legitimate travel companies will let you use a credit card.

Make sure you get EVERYTHING in writing: If your unbelievable deal does turn out to be a rip-off, you will need something to show the credit card company in order to dispute the charges.

If it sounds too good to be true, then it probably is: If they are offering you a flight to Mexico that is regularly $500 for $100, then chances are, it’s a scam. While there are great ways to book your hotel + flight + food + drink together to save money, most don’t offer an 80% discount!  Don’t be afraid to try a website like TripAdvisor.com to do some background investigation.

Buy directly from the companies themselves: This includes airline, hotel, transportation, tickets, etc. Many times the actual companies promise the cheapest possible fare on their own website (United does this, for example). Even if it does cost you a bit more, you will sleep better at night knowing that your trip is booked and confirmed.

John Sileo is an an award-winning author and keynote speaker on identity theft, internet privacy, fraud training & technology defense. John specializes in making security entertaining, so that it works. John is CEO of The Sileo Group, whose clients include the Pentagon, Visa, Homeland Security & Pfizer. John’s body of work includes appearances on 60 Minutes, Rachael Ray, Anderson Cooper & Fox Business. Contact him directly on 800.258.8076.

Top Tips to Stop Tax-time Identity Theft – Part 1

“Tax Time ID Theft – Part 1″ href=”https://sileo.com/top-tips-for-tax-time-security-peace-of-mind-part-1/”>Part 1 – Tax Preparers | Part 2 – Protecting Computers | Part 3 – IRS & Tax Scams

Tax season can be a stressful time of year for individuals and business owners alike, especially those who fail to plan in advance and then sacrifice focus and performance as they race to meet the filing deadline. But that stress is nothing compared to the potential destruction of your financial reputation brought on by tax-time identity theft. And tax-related identity theft is on a precipitous rise.

An audit published on July 19, 2012 by the U.S. Treasury Department, found that the IRS paid fraudulent tax returns to identity thieves worth a total of $5 Billion in 2011. The study also predicted that the IRS (and therefore, you as a taxpayer) will lose an estimated $21 Billion in fraudulent claims over the next five years. Tax-related information is the Holy Grail of identity theft because it contains virtually every piece of information, including a Social Security number (SSN), which a fraudster needs to defraud you.

Tax-related identity theft affects individuals in a couple of ways:

  1. Refund fraud. In refund fraud, an identity thief illegally uses a taxpayer’s name and SSN to file for a tax refund, which the IRS discovers after the legitimate taxpayer files. The legitimate taxpayer is then forced to spend time and money proving her innocence, setting the record straight with the IRS and protesting fines and penalties assessed because a refund was given where taxes were potentially owed. According to an article in the Wall Street Journal, “The National Taxpayer Advocate, an IRS watchdog group, got 55,000 requests for help with tax-identity theft in 2012.  The group has seen a 650% rise in the number of identity theft cases it handles since 2008.  And the IRS since last year has doubled to 3,000 the number of staffers working on such cases.”
  2. Employment fraud. In employment fraud, an ID thief uses a taxpayer’s name and SSN to obtain a job. When you as the employer report income for the employee to the IRS, the legitimate owner of the SSN appears to have unreported income on his or her return, leading to enforcement action.

There are steps that you can take that will minimize your chances of being affected by this growing crime. It is your responsibility to protect not only your own tax-related information, but also the sensitive data you handle on behalf of your business, employees and customers if you work in a job that requires you to handle such data.

This is the first of a three-part series in which we’ll provide you with practical checklists to help prevent tax identity theft and/or deal with it once it’s happened.

Today’s Tax-Time Identity Theft Tip: Choose a security-minded tax preparer.

Your greatest risk of identity theft during tax season comes from a surprising source: a dishonest or disorganized tax preparer. Ask yourself (and your preparer) these questions:

  • Does your tax advisor have an established track record and years of satisfied clients? Google them to find out.
  • When you visit your tax preparer’s office, are client files well protected? Do they leave tax-related folders in the open for the cleaning service to access, or are they locked in a filing cabinet or secure office? Do they meet with clients in a neutral, data-free, conference room?
  • Have you interviewed them on how they protect your private data, whether or not they have a privacy policy and if they provide employee data security training?
  • Have you expressed your desire that they take every precaution to protect your data? Asking professional tax preparers these questions sends them a message that you are watching!
  • Is your tax preparer working on a secured computer, network and Internet connection?
  • When filing W-2/W-3 and 1098/1099 tax forms, have you obtained them from a reputable source to make sure that they aren’t fraudulent?

Tax Time Identity Theft: Part 2 – Protecting Computers | Part 3 – IRS & Tax Scams

John Sileo is an author and highly engaging speaker on internet privacy, identity theft and technology security. He is CEO of The Sileo Group, which helps organizations to protect the privacy that drives their profitability. His recent engagements include presentations at The Pentagon, Visa, Homeland Security and Northrop Grumman as well as media appearances on 60 Minutes, Anderson Cooper and Fox Business. Contact him directly on 800.258.8076.

Beware Cyber Security Grinches & Holiday Scams

[youtube https://www.youtube.com/watch?v=gERBwp1o-yE&rel=0]

‘Tis the season to receive holiday scams in your email, on your Facebook page and via text. But you won’t be singing tra la la la la if you click on links that install malware on your computer! More and more of us seem to be conducting our holiday shopping online, and the cyber security Grinches are taking advantage of this new-found holiday convenience. There are several varieties of holiday scams that seem to come around each year.

The first red flag might be the Subject line of the email: “Order Confirmation”, “Acknowledgement of Order”, “Order Status”, “Thanks for Your Order”, “Problem With Your Order”, “Delivery Failure”, “Canceling Your Scheduled Delivery”, etc. It may tell you that an order is ready for you and you just need to click on the link to get the information about how to redeem it. Or, it may play on your fear of not getting a package out before Christmas and say you haven’t provided a correct address – this is a fear-based holiday scam.

Holiday scams usually appear to come from well-known companies, are VERY realistic looking and even use actual logos.

Once you click on the link, however, malware is installed on your computer that may gather email credentials, credit card data, logins and passwords in addition to making your computer a magnet for junk mail. It can also deploy a scanning technology that uses your computer to scan websites for vulnerabilities and then hack them!

Cyber Grinch or Real Deal? How to Tell the Difference…

If you do receive an email, scammy or otherwise, even if you did indeed order from that store, follow these steps:

  1. DO NOT CLICK ON ANY LINKS IN THE EMAIL!
  2. Instead, open your web browser and type in the merchant site and log in to your account (which you had to establish to order from them).
  3. If it the email you received was about a legitimate order, they will provide you with an order or reference number which you can type into their website to verify activity.

In other words, verify that the email is legitimate by going directly to the site; don’t depend on the email. If for some reason you did click on a link that brought you to a website, make sure that you don’t click any more times on that site, and don’t fill out any information that they might be requesting.

(For more solutions to common scams related to the holidays, or really, all year long, check out our entire 12 Days to a Safe Christmas blog series.)

When not protecting readers around the holidays, John Sileo is an an award-winning author and keynote speaker on identity theft, cyber security, internet privacy & technology defense. John specializes in making security entertaining, so that it works. John is CEO of The Sileo Group, whose clients include the Pentagon, Visa, Homeland Security & Pfizer. John’s body of work includes appearances on 60 Minutes, Rachael Ray, Anderson Cooper & Fox Business. Contact him directly on 800.258.8076.
[youtube https://www.youtube.com/watch?v=B1st4gzcdLs&rel=0]

Android Flashlight App Shines Light on Your Data

Android flashlight apps harvesting your data for marketing & cyber crime.

You LOVE that flashlight app you have on your smartphone, right?  Whether you’re in that dark restaurant with a size 2.5 font or wanting to share your love at a concert or finding your keys in your purse…you wonder, how did you ever live without it?

Well, it turns out the creators of that wonderful app love it, too, because it has become a way for them to get ahold of your personal data to use or sell.

Android devices seem to be especially vulnerable.  Snoopbit studied the top ten Android flashlight apps and discovered that every one of them collects unnecessary user data and accesses areas of the device completely unrelated to the purpose of the app.  This includes having the ability to read phone status and identity, view Wi-Fi connections, modify system settings, obtain full network access, and determine your precise location via your phone’s GPS, among other permissions.

Snoopbit tested these flashlight apps: Super Bright LED flashlight, Brightest Flashlight Free, Tiny Flashlight + LED, Flashlight, Brightest LED Flashlight, Color Flashlight, High Powered Flashlight, Flashlight HD LED and Flashlight: LED Torchlight.

If you have any of these apps on your phone, uninstall them immediately.  You can also investigate “permissions groups” to learn more about what an app will be able to access on your device (see below). With permissions groups, you can quickly see what capabilities or information an app may use before downloading it. Also, you can review individual permissions at any time using the Play Store app.

It’s a good idea to review permissions groups before downloading an app. Once you’ve allowed an app to access a permissions group, the app may use any of the individual permissions that are part of that group. You won’t need to manually approve individual permissions updates that belong to a permissions group you’ve already accepted.

To review individual permissions and groups used by the latest version of an app available on the Play Store:

  1. Open the  Play Store app.
  2. Go to an app’s detail page.
  3. Scroll down to “Additional Information.”
  4. Select View details.

After you’ve installed an app, you can review the permissions it can use on your Settings menu.

  1. Open your main Settings menu.
  2. Select Apps or Application Manager.
  3. Select an app.
  4. Scroll down to “Permissions.”

The pre-installed iPhone flashlight app seems safe, and those apps using iOS and Windows Phone OS are not as dangerous, but third-party apps on Windows Phone and at the iTunes store are also accessing unnecessary sensitive user data and location information, and unnecessarily using the internet, collecting data and building user profiles.  Apple Users can find more information on app privacy here: https://support.apple.com/en-us/HT6338

John Sileo is an an award-winning author and keynote speaker on identity theft, internet privacy, fraud training & technology defense. John specializes in making security entertaining, so that it works. John is CEO of The Sileo Group, whose clients include the Pentagon, Visa, Homeland Security & Pfizer. John’s body of work includes appearances on 60 Minutes, Rachael Ray, Anderson Cooper & Fox Business. Contact him directly on 800.258.8076.