Protect 4

MARCH 2010

THIS MONTH IN PROTECT

Inside This Issue . . .

Most of the stories in PROTECT, the monthly newsletter that helps you avoid becoming a victim of identity theft, are about innocent people victimized by strangers. There is a terrible sense of violation, but at least it is impersonal.

But in this monthʼs edition, several of the stories touch closer to home: the growing incidence of identity theft by people you know. Parents, relatives, friends, roommates, business partners, trusted employees who compromise your personal information, share your passwords, embezzle your funds. Experts report that identity theft of this kind, while still a small portion of the ten million incidents a year, is growing at a healthy clip.

COUNTDOWN TO

THIS TIME IT’S PERSONAL

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 identity. So continue to look for this newsletter every month. Youʼll find useful and authoritative ideas and information to protect your most important possession – your identity.

Even if, sadly, it is from those you know and even love.

CENSUS SCAMS THE PARENT TRAP THE ATTACK ON

VETERANS’ IDENTITY CREATING A

STRONG PASSWORD COLLEGE ROOMMATE RISKS

FIXING CREDIT BUREAU ERRORS

COUNTDOWN TO

CENSUS SCAMS

As the U.S. government gears up for its once-a-decade constitutionally mandated Census, experts are urging people to cooperate – but also warning us about the many risks of identity theft that arise. The first phase of the Census has already begun, as workers verify the addresses of homes across the nation. Eventually, more than 140,000 employees are expected to count every person, gathering as much personal information as possible, such as name, age, gender, race and other relevant data.

THE SCAMMERS ARE LICKING THEIR LIPS AT THE OPPORTUNITIES.

Here is basic advice on how to tell the difference between official Census workers and a con artist.

Official U.S. Census Bureau workers will have a badge, a handheld device, a bureau canvas bag, and a confidentiality notice.

When they come to visit, ask for identification and a badge prior to answering any questions. Donʼt invite anyone into the house.

Real Census Bureau representatives will not “phish” for financial data. Be suspicious if a purported Census employee asks you for a Social Security number, credit card, banking information, a PIN number and the like.

That is beyond the purview of their jobs.

Do not give this kind of information to anyone, even if they insist that they need it.

Legitimate Census Bureau workers are not authorized to solicit donations to any group or charity or political party. Anyone asking for donations is not from the government. This especially includes members of Acorn, the community organizer group, which has been banned from taking part in the national count.

Finally, authorized Census Bureau workers do not use email. They may contact residents by telephone, mail or in person at home, but email is off limits. Email requests for your personal information are fake. Never click on a link or open any attachments in an email that are supposedly from the U.S. Census Bureau.

If you believe you have been contacted as part of bogus or fraudulent activity falsely representing the Census Bureau, call the regional Census Bureau office. In the case of an email scam, forward it to the Bureau. And if the scam comes through the mail, the U.S. Postal Inspection Service is the place to go. See contact information below.

REPORT EMAIL SCAMS REPORT MAIL SCAMS

CLICK HERE TO FIND YOUR REGIONAL OFFICE

THE PARENT TRAP

Strange but true. A growing proportion of identity theft is being perpetrated by parents on their children. The problem first surface publicly just three years ago, and experts now say it is spreading fast. Indeed, the FTC reports that nearly 10 percent of identity thieves are family members or relatives of the victims, though the Commission does not say how many of these are parents.

It comes down to this. Parents have an exceptional opportunity to steal because they know their childrenʼs Social Security numbers — the key to opening credit card accounts and store accounts — and can intercept any mail that could tip off other family members to the crime. They are also in a position to raid custodial accounts, swipe money from trust funds, or sell off savings bonds received as presents. And even if they are caught, parents often believe that they have committed a victimless crime (it was necessary or

they deserved the money or they intended to replace the money at some future date) and children are often reluctant to prosecute (generally out of embarrassment or a misplaced sense of loyalty). So the crime has high reward and low risk.

The reality, however, is that parental identity theft is far from a victimless crime.

For the child, it invariably creates long term problems. These include compromising the childʼs credit rating at key moments in their lives; making it hard for the kids to prove to lenders that it was their parents who did the damage; and leaving emotional scars in the same vein as sexual abuse.

As for how to address the problem once it is revealed, experts suggest that children adopt a “tough love” strategy.

That means filing a police report so as to get your credit cleared or, at minimum, seeking private mediation to get the parents to privately admit in writing to the wrongdoing. Only with such public admissions or documentation can the child easily clear his or her credit rating and reputation. Other common sense steps to avoid additional thefts in the future: children should consider changing their Social Security number, an admittedly difficult procedure, and they should always be vigilant about checking credit reports or should hire an identity protection service.

SEE INTERVIEW WITH VICTIM OF PARENTAL ID THEFT

CREATING A

STRONG PASSWORD

Passwords are a necessary part of your life these days. The average internet user, studies show, is asked for it by more than 20 websites a month. But if your password is compromised, you are vulnerable to identity theft, money stolen from bank accounts, fraudulent purchases via online shops, and much more mayhem. A fraudster who manages to find or figure out your password(s) will have the keys to your entire online life, and can do anything with your accounts that you can.

3. Further to point 2, make the password as long as possible, include as many diverse characters as possible, do not use real words spelled forwards or backwards, and do not use simple combinations (like 1,2,3,4,5) that are easy to spot when you type them in.

4. Keep your passwords secret, even from friends and family members, because the more people who know a password, the more likely it is to leak.

An important safeguard against the risk of, or serious corollary damage from, identity theft is to be smart about 5. To be extra safe, change your creating and protecting your password. passwords regularly. The experts says that making changes every 30 to 1. Have a different password for 90 days is a good rule-of-thumb. each and every important account Commonsense, yes. But recent or transaction; one would not have research in Britain found that nearly the same key to every door lock. half of internet users use the same password for most accounts, one in 2. Craft strong passwords that are ten use memorable dates and names random combinations of letters and that an identity thief could figure out, words rather than obvious dates or and four in ten share their passwords names or other personal information with friends or family. that an identity thief can glean.

Children始s names, spouses names, WATCH A VIDEO ON CREATING your address, your birthday are all A STRONG PASSWORD bad ideas.

VETERANS UNDER IDENTITY ATTACK

Members of the Armed Forces are among the most vulnerable people to identity theft. This is because of their non-standard work hours, frequent lengthy absences from home, relocations and duty assignment in remote locations, and their communal living situations where civilians, foreigners and others have easy access to their information.

More on these risks and how they should be dealt with in the next issue of PROTECT.

But one event that put virtually all veterans at risk of identity theft had nothing to do with the experience of actions of individual soldiers.

It was a system wide failure in which the Veterans Administration lost 26.5 million Social Security numbers. This still stands as the largest identity theft of a federal government agency and a cautionary tale of massive proportions.

In 2006, a long-time analyst at the Veterans Administration was blamed for the lapse after he took home sensitive data and his home was burglarized. The burglary included the employee始s laptop and external drive, which contained the names, Social Security numbers, dates of birth and numerical disability ratings of millions of vets. Luckily, no medical records or financial information were compromised.

The analyst promptly notified his superiors but because of bureaucratic delays, veterans and the public were not informed until three weeks after the event. Eventually every veteran and many of their spouses received a warning letter from the government. The laptop was later recovered by the FBI and it remains unclear if the personal information was actually improperly used. Still, the inspector general of the Department issued a blistering report about the sloppy procedures for protecting personal information at the VA, and the agency始s slow response to the theft.

Flash forward to 2010. The Veterans Affairs Department is now in the process of paying out a total of $20 million to veterans for exposing them to possible identity theft.

This is the result of a class action suit recently brought and won by five veterans groups.

The money is being used to pay veterans who can show actual damages from identity theft or costs incurred for credit monitoring.

If any of the money is left over, it will be donated to various veterans始 charities.

STUDYING THE RISKS OF A

COLLEGE DORM

Check The Bank Statement

Students are notorious for failing to reconcile their bank accounts. Doing so is one of the quickest ways you can spot existing account fraud and stop identity thieves.

Ask For An Alternate ID

College students comprise nearly one-third of all identity theft victims.

Dorm living makes information easily accessible. Roommates and casual acquaintances are not always honest.

Credit card offers are increasingly common. Schools often use social security numbers as identity numbers.

The list goes on. Though students think about theft because they rarely have much money, the truth is that they are favorite targets of identity thieves because of their relatively clean credit records.

Ask the institution not to use Social Security numbers as identification or to post grades. Urge the university or college to switch to a system that generates completely random identification numbers for student ID cards.

Secure The Computer

It is important that a student始s computer or laptop be outfitted with security software and strong passwords so that roommates or classmates or passersby do not have access. This includes installing anti-virus software so that problems cannot be spread through viruses.

Get A Shredder

Students throw out tons of stuff that can be fodder for thieves. Credit card offers, student loan documentation, correspondence with the university, junk mail with data on it.

Thwart dumpster diving criminals by using a shredder.

HERE ARE SOME TIPS FOR PROTECTING THE IDENTITY OF YOUR COLLEGE STUDENT.

CLICK HERE FOR SPECIAL DISCOUNTS ON SHREDDERS FOR ID SHIELD SUBSCRIBERS

important papers regarding enrollment, student loans and other similar topics, it is a good idea to have a place where that information can be safely stored without leaving it accessible to nosy friends, roommates or dorm neighbors.

A safe or a locked cabinet can do the trick.

Since students are at seriously at risk for identity theft, and you simply cannot protect against every eventuality in a dorm setting, consider purchasing a professional identity monitoring service.

Lock It Up. Because students receive

Purchase Identity Protection

BEWARE THE TRUSTED EMPLOYEE

At small businesses, it is often the long time trusted employee — or even a business partner — who steals. Such a person has access, knowledge and, perhaps, motivation, to forge, to steal, to scheme. Because of the relationship, there is often a long delay before the boss catches on, making the damage even worse.

Here is what experts say about how to prevent the loss and the heartbreak goes with it.

First, know the common methods of employee theft. Frequently, an employee creates a fictitious vendor who is paid for goods never received or services never performed, and pays with a check that he then cashes. Sometimes, an actual vendor and the employee work a deal by marking up prices and collecting kickbacks. Another common approach is for an employee to open an account with the same name as the company, then take customer checks and deposit them in that account. The books are changed so the customer transaction does not exist. Last, but not least, there is old-fashion theft of petty cash or inventory.

Second, know how to prevent it. Here, the key is vigilance. There should not be one person

exclusively responsible for the accounting function, and there must be an independent accountant who comes in to audit the books on a regular basis. It also helps for the owner to be more hands-on. At minimum, this means reviewing checks and bank records each month. A rule set in stone against gifts from vendors can also be useful. And technology can help: judicious use of video cameras and chips in inventory can cut down on stealing.

Third, remember that identity theft can be as serious as property theft. Disgruntled or dishonest employees can steal co-workers' personal information, especially through access to payroll records which include addresses and Social Security numbers. Personnel files, benefits data, payroll records and tax records all potentially offer thieves the opportunity to steal tens or hundreds of identities in one fell swoop.

Employers who donʼt use basic precautions, such as evaluating their computer security practices regularly and storing personnel files in locked cabinets, raise their likelihood of being sued for negligence. Experts recommend that small businesses bring in IT specialists to create secure computer systems and to otherwise limit access to sensitive information.

Lastly, when the crimes are discovered and you have a suspect, the experts advise against immediately confronting them. Being wrong can lead to defamation suits and other ugliness.

Instead, consult the professionals. A lawyer can help you take the case to the police or district attorneyʼs office. An accountant can go through your books and try to determine who had access to them and who likely committed the crime. Also, if personal information is involved, issue a warning to the innocent employees and contact the three major credit bureaus to notify them of the problem and to seek advice on how to protect the credit ratings of your employees.

FIXING ERRORS IN

CREDIT REPORT SERIES #4

YOUR CREDIT REPORT

PROTECT is publishing a series on understanding your credit report for a simple reason: knowing what is in these reports is vital to your economic health and safety. You need a clean report to apply for a mortgage on a house, to buy a car, or to finance any big ticket item.

In the first three installments, we looked at what is in the report, how your credit score is calculated, and how to improve your credit score.

The most common credit report errors are rather predictable. These can include accounts mistakenly attributed to you, out-of-date home address or employment information, and more serious problems such as the presence of a delinquency that you've already remedied, or an old collection action that is still being reported as overdue.

If you find an error, the Fair Credit Reporting Act requires credit bureaus to investigate your claim within 30 days and to correct the mistake. It is up to you, however, to initiate the request for an investigation. This can be done in three ways.

ONLINE DISPUTE RESOLUTION First, you can dispute your claim online. All three credit bureaus offer online dispute resolution and it is generally a convenient and popular place to start. The companies provide clear step-by-step instructions on how to proceed.

Click on the name of the credit bureau below to file your claim online: EXPERIAN EQUIFAX TRANSUNION

PICK UP THE PHONE

Second, you can address the problem by telephone. Here, the credit bureaus have customer service representatives who, again, will walk you step-by-step, through the resolution process. And a phone call to ask some basic questions may make give you information that makes it easier to ultimately conduct the dispute online or in writing. The phone numbers are listed below:

Send the letter “Return Receipt Requested� and expect a wait of about 4 to 6 weeks before receiving a status update. The latter is important, since you need to verify your claim of inaccurate information. Proof is anything from canceled payment checks to past billing statements. If a payment dispute is at issue, your creditor will have past statements on file as required by the Fair Credit Billing Act. CLICK HERE FOR A CLEAR SAMPLE LETTER PROVIDED BY THE FTC

THE END GAME

The experts say that there are three keys to pursuing a successful conclusion. First, keeping records is crucial to the correction process. Every step of the way, be sure to Experion: 888.397.3742 keep good records of all of your phone Equifax: 800.685.1111 conversations and copies of each letter TransUnion: 800.888.4213 and email. Second, be patient. These things take time and some effort but, to WRITE A LETTER correct a meaningful mistake, it will be Finally, sometimes a letter is the best way to lay out all the information and background worth it. Third, know your rights. If the detail to your dispute. Here you will need to dispute results in a change to your credit provide, at minimum, your complete name, report, the credit bureau will give you the written results and a free copy of your address, date of birth and Social Security number; the name of the company you have report. If you are unsuccessful in removing information from your credit file and reach a dispute with and account number of the an impasse, you do have the option of disputed item; and the reason for your attaching a letter of explanation to your dispute, any corrections to your personal credit file; send it to all three credit bureaus information and a request for correction. and the creditor. Or you can even take If you are including documentation of your legal action. claims, such as proof of payment, be sure to send a copy rather than the original.

NEXT MONTH BUSTING THE CREDIT SCORE MYTHS

TRUE STORIES WHERE始S THE BEEF?

A North Dakota cattle buyer has been sentenced in federal court in Billings, Montana, for a massive fraud in which he showed bankers cows he claimed to own but didn始t. Todd Kenneth Horob, 41, will spend 11 years in prison for making false statements, bank, wire and bankruptcy fraud, money laundering and aggravated identity theft. The scheme totaled about $7.8 million and involved loans from Wells Fargo and Dakota West banks, which Horob obtained by putting up 7,000 head of cattle as collateral. In reality, he had only 60 head of cattle. When bankers investigated, Horob showed other people始s herds, arranged for stockyard owners to lie for him, and provided false brand inspection certificates and other false documents to hide the fraud.

A TAXING TALE

Federal prosecutors say an Atlanta man collected more than $1.3 million of fraudulent tax returns from 24 states using the Social Security numbers and birth dates of other people. Michael Stringer, 29, pleaded guilty in federal court to wire fraud and identity theft for filing a false tax return. He faces a mandatory two-year prison term for the identity theft plus up to 20 years for the wire fraud. Stringer said he filed the tax returns electronically through a tax service in California, apply for false refunds.

BERNANKE RING BUSTED

A couple of months ago, PROTECT reported that Federal Reserve Chairman Ben S. Bernanke was victimized by identity theft when his wife始s purse was stolen from the back of her chair at a Starbucks. Now, the leader of the crime ring has been sentenced to more than 16 years in prison. Prosecutors said the purse snatching was the work of a nationwide identity theft ring that has caused more than $1.5 million in losses to at least ten banks and financial institutions. One of two ringleaders, Leonardo Darnell Zanders, 49, pleaded guilty during his trial to charges of conspiring to commit bank fraud by cashing stolen checks on, among other things, the Bernanke family bank account. A transcript shows that another defendant, Darrell Earl Price, earlier admitted guilt.

GOING POSTAL Leonard Jenkins of Baltimore was sentenced to three years in prison for mail fraud, theft of mail and aggravated identity theft arising from the use of his position as a letter carrier to steal U.S. treasury checks. According to his plea agreement, Jenkins stole treasury checks that were to be delivered to recipients on his route and other carriersʼ routes. In exchange for cash payments, Jenkins gave over $100,000 of the stolen checks to his conspirators, knowing that they would use fake identification documents to cash those checks at local check cashing stores. Twelve defendants have been convicted and more than 50 individuals and businesses were victims of the scheme.

LICENSE TO STEAL A Pennsylvania woman has been charged with identity theft and device fraud after forging driver's licenses and selling them to third parties. Cursheena Patterson allegedly stole the names, addresses, Social Security numbers, and birthdates of at least 17 individuals from her place of work in the

identity theft fraud. Patterson then obtained counterfeit driver's licenses in those victims' names. To perpetrate the fraud, she used photographs of several of her illicit customers on the drivers licenses, providing them with fake IDs, which they then used to obtain lines of credit in their own fraud, conducted by running up credit at major retail outlets such as Best Buy, Home Depot and Loweʼs.

DRUG STORE SCORE Be careful what you toss into trashcans outside drugstores. In the latest crime trend to hit Delaware, police report that people looking for drugs such as Oxycontin and Vicodin are stalking customers who throw away prescription bags containing paperwork with details about their pills and themselves.

The thieves rummage through garbage cans near pharmacies and then use the personal information — patientʼs name, doctorʼs name, date of birth, medication and dosage — to call in prescriptions and charge them to the victims' insurance. Then they turn around and sell the drugs. Prosecutors say organized crime is involved.

SOCIAL SECURITY SUBTERFUGE

Two Mexican nationals, in the U.S. illegally and originally arrested for domestic violence in Franklin County, Ohio, are now facing identity theft charges. Jeremias Vasquez-Lopez, 23 (shown here) and Nehemias Samuel Lopez-Perez, 34, are charged with using other peopleʼs Social Security numbers to obtain jobs and forge permanent residence cards. Both Social Security numbers are valid, one belonging to an Arizona man and the other to a resident of Puerto Rico.