Top 5 Tricks of Identity Thieves

From an article at Yahoo! Finance of the same name, written by Stacy Curtin September 29, 2010

Identity theft affects 9 million Americans each year. Knowing the most common methods identity thieves use could save your financial and medical health.

Paying with a credit card, updating friends on social networking sites and throwing out the trash are fairly common activities for most Americans these days. But however routine or harmless these behaviors might seem, they could potentially cost you your identity.

According to the Federal Trade Commission (FTC), a federal consumer protection agency, identity theft affects 9 million Americans each year.

The FTC website says, "Identity theft occurs when someone uses your personally identifying information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes."

If your identity is stolen, your credit rating, finances and even your medical health could be at risk.

Identity theft is very difficult to detect. However, there are things you can do to protect yourself.

As is often the case, the best defense is sometimes a good offense.

Knowing the most common methods thieves use to steal identities is a good way to fight back. So this week in Financially Fit, we'll cover five of the top tricks of identity thieves.

#1 Skimming

Skimming can happen while you're paying for gas at the gas pump, when you're removing money from the ATM or even when you're handing over your credit card to pay for dinner.

"Skimming is when information is captured from your credit card illegitimately," says Leonard Gordon of the FTC.

At gas pumps and ATMs thieves install special equipment called skimmers that are not visible to the naked eye. These skimmers make two copies of your credit card information.

"One [copy] to process the transaction and one for the bad guys to later download," explains Gordon.

Skimming is a very lucrative scheme. In a recent Los Angeles case, a gang of thieves netted $2 million after placing skimmers on the credit card readers at gas pumps.

Gordon says skimming is a big problem — one that costs consumers and banks billions of dollars a year.

#2 Medical Identity Theft

Medical identity theft is on the rise, and it's scary. This type of identity theft not only has financial risks, it could cost you your life. Here, thieves use your identity to gain access to doctors, dentists, prescriptions and procedures, and then send you and your insurer the bill.

In 2009, 1.4 million Americans were victims of medical identity theft according a report by Experian.

"If a person who is impersonating you has had medication administered [and] a procedure performed and then you go into the emergency room, and you are not conscious, and your medical records reflect that you have had this procedure performed [and] you have had this medication administered, when in fact you hadn't, there are some real medical risks there," Gordon says.

If you start to receive bills for procedures that you didn't have or from providers that you don't use, that's a key way to determine that someone else might be using your medical benefits.

#3 Social Networking Abuse

Social networking allows us to keep up with friends, family and colleagues, but these websites also serve up our identities on a silver platter to identity thieves.

According to a survey by the CMO council, one in every five users has been touched by social networking abuse.

Key personal details, such as age, hometown, employer and personal favorites, can be used against you.

Fraudsters on the web frequently use "pretexting" to steal your identity. The FTC website defines pretexting as "the practice of getting your personal information under false pretenses."

For example, after looking at your profile pages for basic information about you, a "pretexter" could call — pretending to be from an organization you trust — and ask for important personal data such as your birthday or social security number.

#4 Family and Friends

Theft source number four is surprisingly common — family and friends commit nearly half of all identity crimes. It often happens at the places we feel the safest, including at work, a college dormitory or even at home.

"Don't leave your pocket book laying around, don't leave your wallet around [and] check your credit card statements as soon as you get them," Gordon says.

It is important to look over all credit card statements carefully for any unidentified charges, says Gordon. He also recommends checking your credit report twice a year to spot all types of identity fraud.

#5 Dumpster Diving

Just taking out the trash is another routine activity that could put your identity at risk.

Every year, each of us throws away 175 pounds of paper, and much of that includes personal information thieves can use to steal your identity.

Credit card offers, bank account numbers and even just your name and address are clues thieves can use to help unlock your identity.

Visit the Federal Trade Commission website for additional information and identity theft-prevention methods.

Charlie

Personal Security - Protect against Electronic Vehicle Theft

A friend of ours sent us this information and asked us to post it for everyone's benefit.

How to Lock Your Car and Why.

I locked my car. As I walked away I heard my car door unlock. I went back and locked my car again three times. Each time, as soon as I started to walk away, I would hear it unlock again!!

Naturally alarmed, I looked around and there were two guys sitting in a car in the fire lane next to the store. They were obviously watching me intently, and there was no doubt they were somehow involved in this very weird situation. I quickly chucked the errand I was on, jumped in my car and sped away. I went straight to the police station, told them what had happened, and found out I was part of a new, and very successful, scheme being used to gain entry into cars.

Two weeks later, my friend's son had a similar happening.... While traveling, my friend's son stopped at a roadside rest to use the bathroom. When he came out to his car less than 4-5 minutes later, someone had gotten into his car and stolen his cell phone, laptop computer, GPS navigator, briefcase.....you name it. He called the police and since there were no signs of his car being broken into, the police told him he had been a victim of the latest robbery tactic -- there is a device that robbers are using now to clone your security code when you lock your doors on your car using your key-chain locking device..

They sit a distance away and watch for their next victim. They know you are going inside of the store, restaurant, or bathroom and that they now have a few minutes to steal and run. The police officer said to manually lock your car door-by hitting the lock button inside the car -- that way if there is someone sitting in a parking lot watching for their next victim, it will not be you. When you hit the lock button on your car upon exiting, it does not send the security code, but if you walk away and use the door lock on your key chain, it sends the code through the airwaves where it can be instantly stolen. This is very real. Be wisely aware of what you just read and please pass this note on. Look how many times we all lock our doors with our remote just to be sure we remembered to lock them -- and bingo, someone has our code...and whatever was in our car.

Personal Security- ATM Frauds

From an article titled "ATM Fraud Gets Even More Brazen"
by Karen Blumenthal, November 27, 2010

Fraud involving debit cards and personal-identification numbers is on the rise as criminals go where the cash is—even targeting banks' own automated teller machines.

Techniques such as "skimming," in which criminals capture card information and personal-identification numbers, have existed for years, often on a small scale. Though the dollar losses still are relatively modest, organized gangs now are pulling off more-sophisticated attacks.

They also are targeting bigger players: Whereas most of the fraud in previous years took place at independent ATMs or at retail points of sale, fraud at bank-owned ATMs made up more than 80% of the breaches in the first six months of this year, says Fair Isaac, which provides fraud-detection software.

Europe, which has faced a bigger problem than the U.S., saw card-skimming ATM attacks jump 24% in the first six months of this year, to 5,743, the largest six-month number since data-gathering began in 2004, according to the European ATM Security Team, a nonprofit group. (Losses from skimming fell 8%, to €144 million, or $197 million.)

Attacks on retailers continue to climb as well. Last month, supermarket chain Aldi said it had discovered that payment terminals in major U.S. cities in 11 states had been altered to allow the skimming of card numbers, cardholder names and PINs between June 1 and Aug. 31 this year.

Avivah Litan, fraud analyst at Gartner, a research firm, estimates that fraud involving debit cards, PINs and point-of-sale equipment has surged 400% over the past five years. One tactic, she says, has been "flash attacks": Using the stolen information, gangs create thousands of counterfeit debit cards and then dispatch cronies to at least 100 ATM machines in several cities at once. Each withdraws a small dollar amount from several accounts to avoid fraud-detection software, adding up to tens of thousands of dollars in losses.

Until recently, skimming equipment was relatively crude and clunky, attached to card-readers with double-stick foam tape and relying on small cameras to record hands punching in PINs. Newer devices include equipment that fits inside card readers, pinhead-sized cameras and well-crafted attachments that sit snugly on top of ATM card readers and PIN pads, looking just like the real equipment. Bluetooth technology allows the fake card reader and PIN pad to talk to each other, and data drives or wireless technology can make downloading of stolen information quick and easy.

Given such clever engineering, consumers may not be able to tell that a machine has been compromised. Banks may not know either: Fair Isaac says that perpetrators of such fraud often place skimmers on outdoor ATMs on Saturday mornings and remove them before the bank opens Monday. The data is typically passed to crooks in another country within hours.

Better technologies are available: Canada and several European countries, among others, have adopted so-called chip-and-PIN debit cards, with chips built into the card, adding a layer of protection. But American banks and retailers have resisted adopting the technology because it is expensive to replace cards, ATMs and point-of-sale machines.

The chip-and-PIN technology isn't foolproof, and experts say U.S. banks and retailers may instead leapfrog that technology, possibly by using the capabilities of smartphones to verify transactions or to actually make the transactions instead of using a card.

Given scammers' growing sophistication, consumers are at a disadvantage. But there are some steps you can take—beyond becoming an expert in equipment design and appearance—to avoid the traps or lessen the impact if your information is stolen:

• The simplest protection, says the American Bankers Association, is to get in the habit of covering up your hand when you enter your PIN so that a camera can't record what you are typing.

• Use an indoor ATM. Because they are less isolated, indoor ATMs are less likely to be tampered with than outdoor machines.

• Use your PIN sparingly at retailers, and choose the signature option—or a credit card—instead, Ms. Litan says.

• If you don't have time to check your bank account regularly, set up email or text alerts to send you balances weekly or, if you are particularly paranoid, daily, so that you will know sooner if something is amiss. Most banks will refund your losses promptly, but you need to report the violation quickly, preferably within two days and no later than 60 days after receiving a statement showing the fraud.

• You should add your bank's and credit card's customer-service numbers to your contacts so you can access them from both your email and cellphone. Having the numbers at hand will eliminate the frustration of trying to find them when you are traveling or at a public computer.

• If your bank suspects fraud, it needs to be able to reach you quickly. Make sure it has your cellphone number as well as your email address and that your other information is up to date. Taking my own advice, I discovered that my bank had home and work phone numbers that were more than a decade out of date.