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Card Fraud: Tips from a Reformed Fraudster

As much as we “do-gooders” try to foresee what criminals are going to come up with next so we can try to figure how to cut them off at the pass, it’s very hard for most of us to think like a crook. Therefore, I’m always interested to learn about fraud from the criminals’ perspective. In an interview[1] earlier this year, a former credit card fraud operator shared what he does to protect himself from becoming a fraud victim. A few of his comments were particularly insightfulAs much as we “do-gooders” try to foresee what criminals are going to come up with next so we can try to figure how to cut them off at the pass, it’s very hard for most of us to think like a crook. Therefore, I’m always interested to learn about fraud from the criminals’ perspective.  In an interview[1] earlier this year, a former credit card fraud operator shared what he does to protect himself from becoming a fraud victim. A few of his comments were particularly insightful for me:
  • He monitors his accounts VERY frequently. Most anti-fraud sites encourage you to monitor your accounts “at least weekly,” but this ex-criminal checks his accounts daily.
  • He uses “fake” information as answers to security questions. The security question and answer process simply provides an additional way of confirming that you are the person using your card. The answers don’t have to be truthful, they only have to match what you told the bank you would say when answering those questions. In fact, fake answers are harder for crooks to figure out, providing even stronger security.
  • He pays attention to card machines he uses. He uses the same few ATMs so he is familiar with how they look and feel, and therefore more likely to recognize any physical change to them, such as when a criminal has attached a card skimmer over the card slot or a brochure rack that could hide a camera. He jiggles odd looking card slots to see if they are firmly attached and keeps an eye out for glue residue that may remain when the crooks has pasted something over the original payment equipment.
So how can we apply these ideas to improve our own fraud prevention practices?
  • Use the alert services offered by banks and credit card companies.  Checking your bank accounts and credit cards daily may be a little onerous for some. Sign up for consumer alerts that will notify you immediately if a suspicious activity occurs.
  • Create a fake security question and answer profile. Develop a fictitious profile for your “alter-ego” so you can remember the bogus information you use as answers to security questions.
  • Be observant of all card payment devices. Card and PIN skimming can occur at ATMs or any card payment devices. In recent years criminals have frequently targeted gas stations, convenience markets and drug stores, but it can easily happen in any place that uses card payment devices. Be attentive to the look and feel of all card devices and don’t be afraid to give a suspicious card reader or number pad a little tug.

[1] “Secrets of a former credit card thief, card theft is cheap, easy and you could be next”, Michelle Crouch, Creditcards.com, January 8, 2011, http://www.creditcards.com/credit-card-news/secrets-former-credit-card-thief-dan-defilippi-1282.php.  

Medical Identity Theft - A Rising Fraud with Adverse Effects

Medical identity theft is among the most devastating and dangerous of identity-related crimes perpetrated against consumers. It occurs when someone misrepresents who they are in order to obtain health-related services. When someone steals your medical identity your Personal Health Information (PHI) can become contaminated with the thief’s medical information. This can lead to misdiagnosis and potentially put your life at risk.Medical identity theft is among the most devastating and dangerous of identity-related crimes perpetrated against consumers. It occurs when someone misrepresents who they are in order to obtain health-related services. When someone steals your medical identity your Personal Health Information (PHI) can become contaminated with the thief’s medical information. This can lead to misdiagnosis and potentially put your life at risk. What if you’re given the wrong blood because your records indicate another person’s blood-type? What if you receive a drug you are severely allergic to because the records are incorrect? What if your appendicitis goes undiagnosed because your medical records state your appendix has already been removed? Life-threatening issues notwithstanding, when confronted with this crime you can face burdensome costs and enormous amounts of time attempting to recover and correct your PHI. It is most often discovered when bills arrive for healthcare-related service you didn’t receive. Getting your medical records purged and corrected can be a nightmare. According to a 2010 Ponemon Institute Survey, the average cost a consumer faces in attempting to resolve a medical identity theft incident is more than $20,000, and 48% of the consumers surveyed actually lost their health insurance coverage. Therefore, it’s important for you to know you have the right to review your medical records for accuracy and request an amendment of your PHI.
New laws and regulations are changing the way healthcare providers keep records, including providing monetary incentives to electronify data (HITECH Act) and protect that data or risk fines and penalties (HIPAA Security Rule). However, electronifying PHI data will still present an increased risk of exposure by data breach, and could make it easier for rogue employees working for organized crime rings to steal your information to sell on the black market, or use your name and insurance information to make fraudulent insurance claims. It is also too soon to know whether electronification of your PHI will make identifying errors easier, or whether it will add to the complexity and difficulty of correcting your information should medical identity theft occur. There are steps you can take to lessen your exposure to medical identity theft. As always, the first line of defense starts with you
  • Leave your insurance card in a safe (and preferably locked) place, and don’t carry it with you unless you need it.
  • Monitor any explanation of benefits received from your insurance company, or ask for an annual list of payments made on your behalf for medical care. If you find an incorrect item, even if no money is owed, contact your insurance company immediately.
  • Safeguard any insurance-related paperwork, much like you would your credit card statements.
  • Review your credit reports annually.  You have a right to an annual free credit report from each of the credit bureaus. Be sure your reports are free of any medical liens.
  • Be cautious providing your personal and insurance information when offered “free” medical services. Often fraudsters use this as a way to obtain your PHI.

So, Your 6-year-old Has a Criminal Record?

OK, we have taken a little literary license to get your attention, but it is true that your kids may already have a tarnished "identity" and you don't know it. The recent breach of 1.6M individuals’ records from a children’s health care system[1] is just one case in point. Criminals using your child’s SSN can often get away with years of unlawful activity before it is discovered, such as when your kid enters the adult world to get a driver’s license, buy a car or maybe apply for a college loan, and is denied because their SSN is associated with criminal activity. Your child will have the trauma of straightening out the mess the crook left of his/her identity - not to mention all the losses suffered by others and all the money that has fallen into criminal hands. To proactively monitor your and your children’s financial identities, consider these actions:
  1. Order and review annual credit reports for the whole family.  Annual reports are available for free by visiting the OFFICIAL free credit report site.  While the adults in your family should have credit reports for you to review, what you are hoping to hear from each credit bureau is that they have no credit reports on your children’s SSNs.
  2. Reduce the use of your kids’ SSN for identification purposes. If anyone asks for your child’s SSN, ask if there is a legal requirement to provide it. If there is no legal requirement, ask for an alternative identification
  3. Keep SSNs off the internet. You may want to wait to tell your child their SSN until they need to know it for themselves.  Explain to them why they should never give it out, especially online, and without checking with you first.
  4. If you need help monitoring your family’s SSNs, there are companies that specialize in providing credit report monitoring, for a fee. Each provides a selection of services for different price ranges, so shop around.
If you start receiving offers for loans or credit cards or – worse – start getting collection notices or phone calls in your child’s name, these are strong indications that your child’s SSN may have been compromised.  If this is the case, refer to our section on Identity Theft for immediate steps you should take.
 
[1] http://www.healthcareinfosecurity.com/articles.php?art_id=4139

ID Theft: Better Shred than Read

This week is the 4th Annual National Protect Your Identity Week (October 16-22, 2011), led by the National Foundation for Credit Counseling (NFCC) and co-hosted by the National Sheriffs’ Association and the National Association of Triads. This year, special emphasis is being placed on the dangers of Child ID Theft. Recognizing that prevention is the best answer to this program, events are being held all over the country, including document shredding and cell phone recycling[1]. To find what events may be near you, visit the Protect Your Identity Now website.