Excellent article about protecting against identity theft via social networking sites

With the rapid proliferation of social networking sites such as FaceBook, MySpace and Twitter, the threat of identity thieves using these social networking sites to steal users' identities has greatly increased.  What with phishing, viruses and links that lead unsuspecting clickers to bad things, social networking sites are a treasure trove for identity thieves.  Employers need to be aware of the risk posed by social networking sites.

I read an excellent article today that provies 8 steps for employers to use to protect themselves and their employees.  The article can be found here - http://www.bloggernews.net/122397.

Report on recent FTC actions

National Mortgage Professional Magazine reported recently regarding the FTC's new leadership and the aggressive steps it is taking in the area of consumer protection.  Here's the article:

While Congress is debating the future of the proposed centralized federal enforcement agency for the financial services sector, one thing regarding enforcement has already been established: With or without the proposed Consumer Financial Protection Agency (CFPA), the Federal Trade Commission (FTC) is aggressively pursuing violations. The FTC’s new Director for the Bureau of Consumer Protection is David Vladeck, and in a little more than one month on the job, Vladeck’s actions have made some strong statements about consumer protection. In his first 45 days, there has been the creation of a task force to help repair consumer credit and prevent questionable lending practices, as well as multiple settlements and litigations filed, many in the financial services sector. This confirms his claim that the first priority at the agency will be dealing with the rise of consumer financial fraud as a result of the economic downturn.
On July 1, Director Vladeck used his first press conference as head of the Bureau of Consumer Protection to announce a nationwide, joint federal/state law enforcement initiative against scammers attempting to take advantage of consumers made vulnerable by the poor economy. Thus far, “Operation Short Change” includes 15 FTC cases, 44 law enforcement actions by the Department of Justice, and actions by at least 13 states and the District of Columbia. In its cases, the FTC alleged that defendants made false and unsubstantiated claims via the Internet, infomercials, telemarketing, robocalls or print advertisements to market get-rich-quick and other similar schemes. Several of these schemes targeted consumers with mortgage- and credit-related problems.
At the press conference, Director Vladeck noted that “thousands of people have been swindled out of millions of dollars by scammers who are exploiting the economic downturn.” The FTC also recently announced two major consumer protection enforcement actions: One involving a nationwide crackdown against scammers and the other resulting in a $3.7 million penalty.

In one of the actions, the FTC and Equifax subsidiary TALX Corporation, has agreed to settle charges that it violated federal law by failing to provide certain disclosures to users of their consumer reports and to entities that provide information for consumer reports. The proposed settlement requires TALX to pay the government a $350,000 civil penalty and bars future violations.
TALX sells income and employment history information about consumers to lenders, pre-employment screeners, and others for use in determining their eligibility for credit, employment or other purposes, which makes it a consumer reporting agency subject to the Fair Credit Reporting Act (FCRA), according to the FTC. The company allegedly violated the FCRA by not providing the “Notice to Users of Consumer Reports: Obligations of Users Under the FCRA,” which notifies users of consumer reports of their statutory obligations, including notifying individuals if the user takes adverse action against them based on their consumer report. The company also failed to provide the “Notice to Furnishers of Information: Obligations of Furnishers Under the FCRA,” which notifies furnishers—entities that furnish information for consumer reports—of their obligations to provide accurate information, correct and update inaccurate information, and reinvestigate consumer disputes.
Also in July, the FTC and California Attorney General Jerry Brown, announced “Operation Loan Lies,” a coordinated national law enforcement effort to crack down on mortgage modification scams. The operation involves 189 actions by 25 federal and state agencies against defendants who deceptively marketed foreclosure rescue and mortgage modification services. The FTC actions, which affect consumers throughout the nation, were announced in southern California, where the scams originated.
“These con artists see the high foreclosure rates as an opportunity to prey on people in distress,” FTC Chairman Jon Leibowitz stated in the release. “They promise to rescue homeowners in troubled financial waters, but after they take their money, they throw them an anchor instead of a lifeline. People facing foreclosure should avoid any company or individual that requires a fee in advance, guarantees to stop a foreclosure or modify a loan, or advises the homeowner to stop paying the mortgage company.”
The FTC announced four other lawsuits, bringing the number of mortgage foreclosure rescue and loan modification scam cases the Commission has brought to 14 since April. Twenty-three state attorneys general and other agencies are participating in the operation, taking action against 178 companies engaged in these types of deception.
To say Director Vladeck has hit the ground running is putting it lightly! The new director was named to the position after a handful of consumer watchdog groups called for FTC Chairman Leibowitz to appoint someone with “a track record as a genuine champion of consumer rights.” Prior to being named to the FTC post Vladeck was co-director of Georgetown Law Center's Institute for Public Representation, a program for civil liberties, open government and regulatory litigation. Prior to his time at Georgetown Law, he spent nearly 30 years with the Public Citizen Litigation Group, a national, non-profit consumer advocacy organization that represents consumer interests in Congress, the executive branch and the courts. Vladeck has argued a number of First Amendment and civil rights cases before the Supreme Court, and more than 60 cases before the Federal Courts of Appeal and State Courts of Last Resort.
Let these actions serve as notice to mortgage originators about being in compliance with Federal laws. If these early announcements are any indication, the FTC’s new Director of Consumer Protection Vladeck may be just what the consumer watchdogs were looking for.

Red Flag Rules to go into effect November 1

The Red Flag Rules are "scheduled" to go into effect on November 1.  However, the effective date has been postponed three or four times.  But those of you who are affected by the Red Flag Rules need to assume that it will go into effect this time.

A partial list of types of businesses that need to comply with the Red Flag Rules are the following:
• Doctors, dentists, and other health care providers;

• Accountants and lawyers;
• Utilities;
• Telecommunications companies;
• Debt collectors;
• Retailers; and
• Employee benefit plans sponsoring flexible spending account arrangements when the arrangement utilizes a debit card.

A good primer on what you need to do to comply can be found at http://wistechnology.com/articles/6563/. 

American Banking News has a good article with tips about how small businesses can better protect themselves from becoming victimized by identity theft.  The full article is at www.americanbankingnews.com/2009/09/26/identity-theft-protection-tips-for-the-digital-age/

1. Be Careful What You Throw Away
Identity thieves are skilled dumpster divers. If you or your employees throw away papers that include bank account numbers, social security numbers, and other information that can be used to perpetuate fraud, there’s a good chance that the data could end up in the hands of unscrupulous characters. Make it a firm policy to shred all waste paper that has any information that could possibly be used by people who might be looking to steal someone else’s identity.
If you only have a small quantity of this type of documentation, it will probably be feasible to handle shredding in-house, with shredders placed in strategic locations around your place of business. If your business generates a large quantity of documentation that contains protected information, it may be better for you to hire a document shredding company to take care of destroying throw away documents that may contain sensitive information.
2. Take Steps to Protect Data Stored on Company Computers
Verify that the virus protection and firewall software installed on your computer system remains current at all times. Make sure that you are using a quality virus protection program and set it up to run daily scans so that you can be as safe from computer viruses as possible. It’s also important to check for updates to your virus software and install them as soon as they become available.
It’s also a good idea to set up every desktop computer and laptop so that a password is required for login. This can help protect stored data in the event that the equipment is lost or stolen and ends up in the wrong hands. This is not a foolproof protection, of course, because skilled hackers can find their way around password protection in many cases. However, it’s certainly better than leaving computer equipment unprotected.
When your company upgrades computer equipment, it’s essential to dispose of your old equipment responsibly. Simply deleting files from your old hard drive is not sufficient to keep identity thieves from stealing your confidential data if the equipment is not properly disposed of. The only truly safe way to get rid of data from your old computer is to shred the hard drives. The same companies that provide document shredding services typically also offer hard drive recycling.

Grand jury indicts bank manager for identity theft

A federal grand jury has indicted Anita Fincher, a now former bank manager from Mobile, Alabama, for aggravated identity theft, bank fraud and theft by a bank employee. Fincher was able to steal more than $800,000 from her customers using a complex scheme of transactions, using transfers from all types of customers' accounts, including CDs, checking, saving, credit lines and money market accounts. Fincher transferred the funds to other people's accounts, even some held by her family members, before eventually accessing the funds. She apparently hoped to hide her crime using the convoluted transfers.

But it didn't work. She now faces a maximum sentence of 30 years behind bars.

Insurance claims clerk guilty of identity theft

Shanell Bowser of Baltimore, Maryland, a claims clerk for a medical insurance adjuster, has been sentenced to five years in prison for identity theft.  She was also ordered to pay more than $200,000 in restitution to her many victims. 

Bowser used her job to gain access to the names, Social Security numbers and other personal identifiers of her victims.  Bowser used this information to open over 125 fraudulent accounts and victimize at least 89 people over a three year period.  Bowser purchased clothes and electronics, withdrew cash from ATMs and even used the stolen identities to obtain phone service.

I personally think employers that collect the personal identifiers of their customers should be held to higher standard in protecting that information.  That includes stricter standards governing their hiring practices.  Whether that would have protected the 89 people victimized by Bowser, I don't know.  But I would think she could have been stopped sooner than the three years that she was able to perpetuate her crime.

There should also be more severe criminal penalties for employees that steal, use or sell personal identifying information collected through their employment.

Oregon Mortgage Broker Charged with Identity Theft

Recently, I have reported on identity thieves from all walks of life - elderly care workers, radio personalities, pharmacists, bank officers, etc.  Today's criminal is a mortgage broker.

The Oregon Attorney General Mortgage Fraud Task Force has indicted Julian JamesRuiz, III, a Salem, Oregon mortgage broker, on charges of identity theft, forgery, mortgage fraud and aggravated theft.  Ruiz is the owner and manager of American Home Modifications, a company that modifies loans.  Unfortunately, his current customers won't be able to get their loans modified and are urged to contact a HUD approved counselor to avoid foreclosure or defaulting on their loans.  To do so, consumers can call 800-SAFENET or go www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=OR

Ruiz faces a total of 17 counts of first degree aggravated theft, mortgage fraud, identity theft, aggravated identity theft, forgery in the first degree and criminal possession of a forged instrument in the first degree.

Facebook users beware!

Another identity theft scam has emerged that involves Facebook.  Last Thursday, a Madison, Wisconsin woman reported to the Madison police that someone had stolen her identity by hacking into her computer, accessing her financial records, changing her e-mail and even logging into her Facebook page. 

While the thief was apparently not able to directly access the victim's bank accounts, he or she did send a message to the victim's Facebook friends, claiming that the victim had been mugged in London and needed cash.  The message even gave an address and phone number to accomodate the transfer of funds. 

So, Facebook users, beware of this scam.

Congress may speed up effective date of credit card act

Its about time.  Wallet Pop is reporting that certain members of Congress have woken up and realized what I and many others have been reporting on for a while ... namely that the credit card companies are taking advantage of the gap in time from the passage of the credit card act to the date that such act becomes effective to up interest rates, lower credit limits and take other actions adverse to consumers while they can do it with impunity.

Now, according to Wallet Pop, some members of Congress may introduce a bill to accelerate the effective date of the credit card act from February 22, 2010 to the first of December 2009.  This would save consumers three months of additional hardship at the hands of the credit card companies.  If such a bill gets proposed (and assuming I know about it), I will keep you apprised so y'all can contact your congressman and urge his or her support for the bill.

Here's the link to the full article on Wallet Pop - http://www.walletpop.com/blog/2009/09/25/congress-may-accelerate-start-date-for-credit-card-act/.

Recent identity theft survey reveals interesting opinions by consumers at large

Approximately 8.4 million Americans reported being a victim of ID theft in 2007. In 2008, the number of reported identity theft victims increased to 10 million, an increase of 19 percent.

Nearly half the people interviewed in a recent National Foundation for Credit Counseling (NFCC) survey conducted by Harris Interactive felt more at risk for identity theft when making a purchase with a credit card when the credit card temporarily left their sight, for example, at a restaurant.


By contrast, the same study revealed that consumers are least fearful of falling victim to identity theft when their credit card does not leave their sight, for instance at a store. Only 21 percent of U.S. adults listed this as a concern, suggesting that consumers are comfortable as long as they can keep an eye on their card.

What the survey did not reveal is that a stolen credit card number and potential identity theft can happen when the credit card doesn't even leave your hand, much less your sight.  This can happen if there is a device attached to an ATM or other card reader that steals the information off the card when swiped.  These devices can be very small and hardly noticeable unless the consumer is paying close attention. 

So the survey, while probably accurate for what consumers think, reveals that consumer fears are likely misplaced.

Identity theft by suspected illegal immigrant

An Illinois man suspected of living in the United States illegally is also charged with identity theft.  Vincente Zaragoza is accused of using the Social Security number of another person to obtain employment at an Illinois business and also used the stolen identity to collect unemployment. 

Thanks to the stolen Social Security number, Zarazoga collected over $119,000 in four years of working.  The person whose SSN Zarazoga was using was denied public aid because it showed she was working when it was actually Zarazoga working. 

Zaratoga faces up to 15 years in prison, a $25,000 fine and possible deportation.

Identity thief ordered to pay $3.2 million in restitution

A New York identity thief was ordered to pay $3.2 million in restitution.  Yomi Jagunna will also serve 141 months in federal prison after pleading guilty to one count of conspiracy to commit identity theft.

Why so much for one mere count of identity theft, you might ask?  Because Jagunna had an account with a commercial database in the name of a collection agency that he then used to sell Social Security numbers to co-conspirators for $30 a piece.  Yep, just $30.  His co-conspirators then used the SSNs to make fraudulent withdrawals from the victims' bank accounts, netting no telling how much thanks to Jagunna.

Jagunna is one of eight charged in the identity theft conspiracy.  Six others have also pled guilty.  The last is awaiting trial.

Pharmacist pleads guilty to identity theft

Recently I have reported on a person who cared for the elderly but also stole their identities.  I have also reported on a employee who stole the identities of her employer and her employer's daughter.  I even reported on a radio personality who got caught stealing identities (among other things). 

The latest you ask - a pharmacist.

Patrick Slifka, a pharmacist at a Cresco, Iowa's Medicap Pharmacy, has pled guilty to aggravated identity theft as well as wire fraud. 

Basically, Slifka assumed the identity of a physician by using the physician's name and DEA number to submit fraudulent claims to Wellmark Blue Cross/Blue Shield for medications.  Slifka now faces a minimum of 2 years in prison, a maximum of 20 years, $250,000 in fines and up to three years of supervised probation.

Hope those meds were worth it

Could it be? Equifax allegedly stops selling credit reports for employee screening

According to John Ulzheimer at http://www.credit.com/, Equifax has chosen to cease selling credit reports to employers for pre-employment screening.  Apparently, the profit from selling this type of credit report was not worth the risk to Equifax.  There has been a lot of reporting about the trap that potential employees find themselves that starts with them becoming unemployed, leading to them getting behind on their bills, which hurt their credit scores and then, when they finally get an interview, they don't get the job because their potential employer doesn't like the looks of their credit report, which leads to further unemployment and further damage to the credit report. 

Here's John Ulzheimer's reporting on the subject -

Atlanta-based Equifax is no longer selling credit reports to employers for the purposes of pre-employment screening, according to Tim Klein, a company spokesperson who revealed the information in an interview with the Dallas Morning News. The credit reports sold by Equifax into the employment market, formerly known as "Persona", were used to determine employment eligibility. And while this is still perfectly legal under the Fair Credit Reporting Act, the company seems to have proactively decided that selling reports to employers wasn’t worth the trouble.


Long a public relations loser, the use of credit reports by employers has become even more controversial given the current economy and the added difficulty that poor credit causes a job seeker who is already having trouble finding a job. Employers who are filling positions where access to money and sensitive information are commonplace have traditionally reviewed credit reports as part of their pre-employment screening processes. The practice is important, as the number of internal data breaches has increased over the past decade. Weeding out an applicant with troubled credit is a responsible act by any such employer.

The trouble with the practice is that it can be unfair to some consumers who have found themselves thrown into credit difficulty through no fault of their own. Layoffs, divorce, uncovered medical expenses, business failures, and death in the earning family can all cause a consumer’s credit reports to become littered with negative information despite no lack of credit management responsibility. And some argue that using credit reports as a screening tool can be unfair to minorities, a claim that lacks any scientific support at this time.

Credit scores, a risk prediction tool used by most lenders and insurance companies, are not provided to employers by either of the two companies that are still selling credit reports for employment purposes, TransUnion and Experian. Credit scores are not designed to predict employee quality or employee performance, so their use for employment screening would be inappropriate. The topic of credit scores and employment continues to be confusing given the amount of incorrect coverage of the issue.

So the next time you’re looking for a job and the job entails you standing in front of a cash drawer, you can still assume that your credit report will be pulled as part of the screening process. It just won’t come from Equifax. And it still won’t have your credit score.

 One down, two to go.

I guess no one is safe from identity theft

Who's the next victim of identity theft ... President Obama?  As most of you probably know by now, Ben Bernanke, the Federal Reserve Chairman, has become a victim of identity theft.  The latest is that the identity thief responsible has pled guilty. 

Leonardo Darnell Zanders of Dolton, Illinois, entered a guilty plea after several witnesses had already testified in his trial, including his co-defendant Darrell Earl Price, who testified that Zanders had given him checks in the name of Anna and Ben Bernanke, which he then used as part of the overall identity theft scheme.

The Virginia Federal Court is scheduled to sentence Zanders on December 18.