APRIL 2011
Inside This Issue . . . TARGETING THE TAXPAYERS BEWARE YOUR
TAX PREPARER IS YOUR STATE AN ID THEFT LEADER?
THINK FIRST AND POST SECOND THIS MONTH IN PROTECT
If identity thieves have any team spirit, theyʼre happily chanting “Weʼre Number 1.” This spring, the FTC released its new list of top consumer complaints in America. Once again, for the eleventh straight year, identity theft ranked first. To add insult to injury, it led the next most frequent complaint by nearly two-to-one. As we note in this edition of PROTECT, the threat of identity theft should be on your mind as you go about your daily life, and this is especially true in the midst of tax season when your sensitive personal and financial data is front and center.
PROTECT is here to help you all year around. Each issue of this newsletter explains the latest crimes and scams, and how to avoid them. PROTECT is brought to you by the people who operate I.D. SHIELD 360, a leading service that helps shield you from the criminals determined to steal your most important possession – your identity.
BRITNEY SPEARS IS NOT STARRING IN YOUR MOVIE
MURDER IN THE MIX
DOES YOUR TAX PREPARER ADD UP?
In addition to this monthʼs overview article on “Targeting The Taxpayer” – you will find it later in this newsletter — lets drill down on one specific fast growing scam. According to the Internal Revenue Service, we are seeing a rise in unscrupulous tax preparers, whose goal is steal your personal information outright or to falsify your returns for their profit. Choosing the right tax preparer, say the experts, can be as important as choosing a trustworthy doctor or lawyer.
On one simple level, consumers can be fooled by fraudsters who claim to be real tax preparers. These flat-out imposters often associate themselves with the names of well-known tax preparation companies like H&R Block to persuade victims that they are legitimate. Any personal and financial information turned over to these criminals is gone with the wind. A more sophisticated tax preparation scam involves actual preparers who manipulate returns — adding fictitious expenses, false deductions, excessive exemptions, and unallowable credits to your return. They either file electronically or have the taxpayer sign blank forms. When refunds are sent to the preparer,
based on the bogus information, he or she keeps some or all of the money. This is particularly troublesome since it is the IRSʼ position that the taxpayer is ultimately responsible for additional taxes, interest and penalties that arise from the preparerʼs misdeeds. While most preparers provide excellent service to their clients, the IRS is urging taxpayers to be careful when shopping for their services. Here are several helpful hints from the experts:
1. Be skeptical of tax preparers who claim they can obtain larger refunds than other preparers.
2. Avoid preparers who base their fee on a percentage of the amount of the refund. 3. Use a reputable tax professional who signs your tax return and provides you with a copy for your records.
4. Consider whether the individual or firm will be around to answer questions about your tax return months, or even years, after the return has been filed. 5. Personally review your return before you sign it and ask questions on entries you don't understand. 6. Never sign a blank tax form.
7. Find out the personʼs credentials and his professional memberships. 8. Seek references from friends, family or other satisfied customers.
THE FTC’S TOP 10
In early March, the Federal Trade Commission released the list of top consumer complaints received by the agency in the past year. Identity theft came up number one in the nation, and Florida outranked the other 49 states. The report breaks out complaint data on a state-by-state basis and also contains data about the 50 metropolitan areas reporting the highest per capita incidence of fraud and identity theft. For the first time, so-called “imposter scams” – an identity theft-related fraud where imposters pose as friends, family, respected companies or government agencies to get consumers to send them money – also scored in the top ten. THE TOP CONSUMER COMPLAINTS, IN ORDER OF FREQUENCY, ARE: 1. Identity Theft 2. Debt Collection 3. Internet Services 4. Prizes, Sweepstakes, Lotteries 5. Shop At Home/Catalog Sales 6. Imposter Scam 7. Internet Auctions 8. Foreign Money/Counterfeit Checks 9. Telephone/Mobile Services 10. Credit Cards
AS FOR THE STATES WITH THE MOST IDENTITY THEFT COMPLAINTS, THEY ARE, IN ORDER: 1. Florida 2. Arizona 3. California 4. Georgia 5. Texas 6. Nevada 7. New Mexico 8. New York 9. Maryland 10. Illinois
The FTC reports reminds consumers that it exists to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.
FILE A COMPLAINT WITH THE FTC
YOUʼLL
DISLIKE
THE NEW FACEBOOK SCAM
Facebook scams just keep on coming. The latest is a rogue “Dislike” button feature that lures users to give away personal information to identity thieves. Facebook is now warning its members to avoid this button. The scam, like previous ones that promise users certain content for clicking on a link, tricks members into giving away permission to access their profile pages. Playing off the official “Like” button legitimately in place on Facebook, the scammers create a fake “Dislike” button that looks quite real. Phony posts invite friends to click on it, giving the symbol the aura that it is coming from a trusted source.
Once it is clicked on, a link then sends people to an application that does not download a “Dislike” button. Instead, it requires the completion of an online survey in order to eventually proceed to the “Dislike” button. All the while, it silently reads your profile and updates your Facebook status to promote the link that tricked you in the first place, thus spreading the message virally to your Facebook friends and online contacts.
Experts note that the “Dislike” button is just one the growing number of scams on Facebook that are piggybacking on fleeting pop culture obsessions. They say that Facebook users should:
• Think very carefully before they click on an unknown link. • Do not be lured in by unknown links on a friendʼs status update, as these scams are becoming increasingly common. • It is especially risky to provide personal information in a survey or allow an application to access your profile. • Use the beefed up Facebook reporting system by using the “flag” button to report any content suspected to be spam or having the potential to compromise a user's account.
TARGETING THE
TAXPAYERS
Death and taxes, philosophers and comedians tell us, are the two certainties. Now add a third: fraudsters trying to scam you during tax season. The IRS and the experts say that the key to protecting yourself is to keep careful track of your documents, do not get fooled by con artists pretending to be IRS agents, and monitor your income and credit reports on a regular basis. Here are some thoughts on the problem:
Monitor your mail especially carefully at this time. Many Americans are receiving W-2's and official forms that contain sensitive financial information, including income details, Social Security numbers and bank account numbers. Keep a lookout for the key documents; missing or delayed documents may suggest trouble.
Keep documents safe, secure and private. Once the critical documents arrive, keep them protected. They are loaded with the kinds of data identity thieves feast on.
Beware of people trying to impersonate the IRS. This usually takes the form of emails, tweets or similar internet approaches, though phones and faxes have are also used. Remember, the IRS does not send unsolicited emails to taxpayers so do not respond to them. Further, the IRS does not discuss tax account information with taxpayers via e-mail or use e-mail to solicit sensitive financial and personal information from taxpayers. And the Department does not request financial account security information, such as PIN numbers, from taxpayers. So, again, do not respond.
Check your W-2 for discrepancies. People can and will steal your Social Security number and use it to get a job. So check your annual income statement from the government. Make sure no one else has reported income under your number, a sure sign of theft as well as a possible duplicate filing to grab your tax refund. Don’t be shy. If you suspect you have been victim of a fraud, immediately contact the IRS. They now have a toll-free number to assist identity theft victims. They will mark affected accounts to resolve identity theft issues more quickly. The phone number for the IRS Identity Protection is 1-800-908-4490.
Plan better for next year. Tax season is a good time to take stock of your tax preparation practices. Review your annual credit reports or make sure you have a reliable identity protection service in place. Start preparing for a more orderly and safe process next year by creating a file to organize receipts, official forms and documents on an ongoing basis for peace-of-mind and easy access to reference your important information in the future.
CLICK HERE TO WATCH A VIDEO ON IRS-RELATED EMAIL SCAMS
TRUE STORIES COOL AS ICE
Federal officials have returned $160,000 to an 87year-old Southern California widower who was tricked by a Quebec-based telemarketing scam targeting elderly people. ICE, the Immigration and Customs Enforcement agency, say the man, a retired engineer, fell victim to a common fraud. The victim was contacted last April by two women posing as representatives of the IRS and the U.S. Department of Justice, who told him he had won a $3.3 million Canadian lottery prize. To claim the prize, they instructed him to send money to pay the taxes on his winnings. He sent three checks. Luckily, they were intercepted by Canadian postal authorities, who were monitoring the scammers, and eventually returned to their rightful owner.
TAX RETURN RETURNED
A 23-year-old Vineland NJ man was just trying to file his tax return when he learned he was a victim of identity theft. The man told police he used an online tax preparation service to electronically file his annual return. But about two hours after filing, he received an email alerting him there was a problem with his submission. The IRS stated that someone already had filed a tax return using his Social Security number on January 31; the man said he could not have filed a tax return on that date then because he was in jail at the time.
THINK GLOBAL ACT LOCAL
Dozens of Denver metro area residents got a text message from what they thought was Sooper Credit Union, a respected Colorado financial institution. It turned out to be a scam. The text told people that
A KILLER STORY
Dmitry Yakovlev, a Russian immigrant charged with stealing the identities of several missing people, has been found guilty by a jury. Though prosecutors made clear their belief that Yakovlev killed the people whose identities he stole, he was not charged with any murders due to a lack of evidence. Prosecutors believe that Yakovlev, a surgeon prior to emigrating, dismembered his victims and disposed of them before assuming their identities for financial gain via bank fraud and stolen credit cards. The victims include a jewelry importer, a Ukranian translator, and a retired New York Police Department employee.
their card had been deactivated, and asked them to enter their credit card number in order to reactivate it. The fact that the text came from a local area code (303) encouraged a number of people to respond. Dale Mingilton of the Better Business Bureau said scammers using a local number didn't surprise him one bit: “Scammers are figuring out that people want to deal with local (numbers) because we've been telling them that.”
WHEREʼS BRITTANY?
Two California men have been arrested for alleged mail fraud after convincing people to invest in a movie to star Britney Spears that never existed and never will. In addition to Spears, Harry Connick Jr., Jennifer Hudson and Nick Nolte were supposedly co-starring in the independent film. Bart Douglas Slanaker owns a boiler room, and it was from there that partner Joseph Roth and their sales people cold-called individuals to invest in the phony project. The scam occurred over the span of seven months, during which Roth and Slanaker raised roughly $300,000 after also
downplaying the investment's risk. Slanaker withdrew the bulk of the money from a bank account after the prospective investors' checks were deposited.
NOT PET SMART
Many people looking for a pet are being victimized by a growing global scam. Online listings claim that very cute dogs coming in from a foreign country, or already in a cargo hold, are waiting to be adopted. The pitch: the owner needs the required insurance and ownership fee payments be made before the dogs are released. Hundreds of thousands of dollars have been bilked this way and, of course, the dogs do not exist. Experts say to stay local when it comes to pets; in every city there are thousands of homeless, abandoned and displaced animals looking for loving homes under the auspices of legitimate animal services organizations.
TAXI DRIVER
A Phoenix AZ taxi driver has been arrested for stealing the credit
card information of his customers in order to make the fake cards for himself and his friends. The driver, 28-year-old Jhoan Quiala,
gave away batches of cards to friends. One such friend, Roberto
Sambra, used the stolen credit card to purchase groceries at the store. Since he used his personal “club” card at one of the stores,
officers were able to track Sambra down and make the arrest. During the police interrogation, Sambra told officers he was given seven bogus credit cards by the cab driver.
THEY’RE AFTER YOUR
KIDS
The age of innocence is over. Children are an excellent target for identity theft, since their credit records are spotless, they do not make use of their credit, and no one may notice the theft for years. More than half a million children a year are victims.
There are two ways to prevent most child identity theft. One is to protect their Social Security number. This is the number most asked for by the government for tax purposes, for doctors and hospitals, for banks and businesses, and for schools, daycare centers and sports teams. As a result, it is the most open to attack of all childrenʼs documents. Recommended safeguards include keeping the Social Security card and other important documents, such as the birth certificate, locked in a safe place. Further, when a medical provider, bank or institution asks for the Social Security number, always ask why. It is your right to refuse to provide it unless the reason is sound. Do not give the number to your child before they need it. Be skeptical of any telephone call or website that asks for the number. And never, ever,
put it online for any purpose. Finally, check your childʼs credit reports frequently and ask for a Social Security earnings record. The latter can alert you as to whether someone is using the number to apply illegally for a job.
The second key to preventing child identity theft is to monitor their computer use. There are predators out there who threatening both safety and identity. To combat this, talk to your kids and educate them to keep personal information private when they are online. Children should not use their real name in an email account or give too much detail on social networking sites. You can help them. Check out the sites your kids visit, see what kinds of information they are being asked for, be selective about what websites they have permission to see, and become familiar with your rights to control or delete your childʼs personal data under the Childrenʼs Online Privacy Protection Act (COPPA). This legislation, enforced by the FTC, gives parents control over what information websites can collect from their kids. All websites for kids under 13, or any general site that collects information from kids, are required to comply. Finally, report any website that you believe has wrongly collected or disclosed information from your kids.
THE PROBLEM WITH POSTING
It is the new national pastime. Not baseball or football or watching reality shows – but posting ideas and information online. It is fun and it is cool. It is also the portal to trouble and danger, from identity theft to slander to bullying and worse. When it comes to posting information online, here are seven key safety guidelines that the experts recommend. THINK FIRST, POST SECOND Good advice in general. Some specific tips: do not post falsehoods or allegations that you can't prove; do not bully; do not plagiarize; and do not react thoughtlessly or angrily to othersʼ comments.
THE WORLD IS WATCHING Do not post anything you are not okay with the whole wide world seeing, because that is the awesome reach of the internet. No matter how secure or obscure a site may be, there is no assurance that your post will remain private. NAMES AND PHOTOS Be careful how you use your name and photo, as these are the building blocks of identity theft. Try to avoid using your full name; first names alone are best as long as they are not too distinctive. Do not post photos that are easy to steal such as full face, high res photos. Other safety and etiquette tips: don't post photos of others without their permission and never post photos of children on unsecured sites.
ADDRESS AND PHONE NUMBER Why risk danger? Keep your street address and your main email address private. Use a “disposable” email address for posting. As for putting you phone number on a site, one quick question. Are you nuts? LOCATION, LOCATION, LOCATION Don't give information about your planned movements, which would let a burglar or kidnapper or other strangers know when you're not at home and where you might be.
CLOSE THE LOOP Consider having a closed group on social networking sites or blogs that can only be accessed by invited users. Also, most sites have a published privacy policy. It is worth reviewing; and be concerned if there is no privacy policy.
WEB CRAMMING WOES A long-running scam, web cramming, is now emerging as a national problem. The FTC has placed web cramming on the list of fastest growing scams, and is beginning to act aggressively against it.
This deception starts with a telephone call to a small business owner. The caller offers one of two things: a free trial of internet services for 30 days or a customized website for 30 days free of charge. Sometimes victims are told they will be automatically billed after the 30 days is up. Sometimes they reject the proposal but are billed anyway. Most times victims are told they won't be billed unless they specifically authorize the continuation of the service. Whatever they are told, the billing begins automatically month-in-and-monthout. And, to add insult to injury, the websites that are constructed are usually poorly executed, filled with typos, and essentially useless to the business.
These scammers are violating the FTC Act on many levels: by billing consumers without their consent; by failing to disclose adequately that consumers must cancel the services before the end of the free trial; and by failing to explain to consumers how to cancel the trial service or otherwise avoid the charges. The FTC offers some suggestions to help protect small businesses from internet service scams and other unordered services:
Know your rights. If you receive bills for services you did not order, do not pay. The law allows you to treat unordered services as a gift.
Review your phone bills as soon as they arrive. Be on the lookout for charges for services you have not ordered or authorized. If you find an error on your bill, follow the instructions on your statement. Assign purchasing to designated staff and document all your purchases. Ask for documentation in writing if you purchase a web service, or any service, over the telephone.
Train your staff about this type of scam and how to deal with scammers on the telephone; designate one or two employees to do all the purchasing, and all others to say they are not authorized to make purchases.
Buy from people you know and trust. Be skeptical of cold calls and feel free to reject high pressure sales tactics.
SEE A FTC BUSINESS ALERT ABOUT WEBSITE WOES