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Protecting Your Identity

Common Fraud Schemes

Phishing and Vishing

In phishing, victims receive emails that warn against a compromised financial account and urge the recipient to log onto a fraudulent website which looks real. Since most of us know not to click on links in unsolicited emails, the scammers have developed an alternative.

In vishing, there is no website - just a phone number you are urged to call to "confirm" your financial information.

Three precious numbers

A recent twist on phishing and vishing is a social engineering scheme which targets credit cardholders. Social engineering, a behavior incorporated by con artists, involves gathering initial information and using that information to convince the target that they know more than they do. In this latest scheme, thieves who have already stolen credit card account numbers contact the cardholders to report (ironically) a possible breach of security. They read the account information they have to the cardholder, and to verify that the card is actually in possession, they ask for the "security numbers" on the back of the card - the three or four digit code credit card companies have added for online purchase security. With this code, the thieves make Internet purchases, which are harder to trace.

Lottery/Sweepstakes Scams

Victims of this scam are usually contacted via letter or e-mail identifying them as winners of a lottery or sweepstakes. Initially, this scam identified foreign lotteries as the source but most recently has expanded to more commonly known lottery sources. The recipient is given a counterfeit check, which includes funds to finance the taxes and fees associated with collecting the prize. The recipient is instructed to cash or deposit the check and wire money to the party collecting the "tax." Following the regulatory limitations on holding funds, you are told the money will be "available" in your account, yet in reality the check will never clear the banking system. The check is returned unpaid, charged to the recipient account, and the recipient becomes liable for the money. To avoid this scam, remember:

  • Be wary of any lottery or sweepstakes notifications, especially from foreign countries. Checks issued by Canadian or foreign banks are not subject to U.S. banking regulations. These may take weeks to clear or be returned through the system.
  • Be especially wary if you are notified as a winner of any lottery or sweepstakes you did not enter.
  • Be cautious if instructed not to disclose your good fortune.
  • If you are concerned that funds are less-than-legitimate, always inform your MWRD representative of the source and nature at the time of the deposit.
  • Verify the validity of the check with the publicly published number of the issuing bank. (Do not verify using the telephone number provided, which may be the scammer's cell phone.)
  • Do not withdraw or wire any funds if the validity of a check is in question.

Advance Fee Schemes

An advance fee scheme occurs when the victim pays money to someone with the expectation of obtaining something of greater value, such as a loan, contract, investment, or gift, and then receives little or nothing in return. To avoid this scheme, remember:

  • If the offer of an "opportunity" appears too good to be true, it probably is. Follow common sense business practices.
  • Research any person or company with which you plan to do business.
  • Make sure you fully understand any business agreement. If the terms are complex, have them reviewed by an attorney.
  • Be wary of businesses that do not have a street address and operate only out of post office boxes or mail drop locations.
  • Be cautious of salespeople who do not have a direct telephone line or who are never "in" when you call, but always return your call later.

FTC 2007 Statistical Update

The FTC lists more than one-third of its fraud complaints (36%) as identity theft reports.1 Identity theft is not going away, and these new statistics suggest that scammers are continuing to find ways to separate you from your money.

The top five states in identity theft incidence reported were: Arizona, Nevada, California, Texas and Florida. (Illinois ranked twelfth.) People aged 18-49 accounted for more than two-thirds of those victimized. People aged 18-29 were the most likely to be targeted (29%), but those aged 30-39 accounted for 23%, and those aged 40-49 accounted for another 20%.

The most common misuse of victims' information was credit card fraud -- especially the opening of new accounts - although existing accounts were used as well. An overwhelming majority of the victims discovered the theft within one month. However, only 42% of the victims placed a fraud alert on their accounts with the credit reporting agencies, and only 38% notified a police department.

1 Identity Theft Victim Complaint Data, January 1-December 31, 2006. Federal Trade Commission, Washington, DC, Feb. 7, 2007.

How to Avoid Becoming a Victim of Identity Theft

The Federal Trade Commission (FTC) offers the following tips for consumers:

Safeguard Information

  • Shred all financial documents before you discard them.
  • Don't carry your Social Security number or write it on checks. If someone requests your number, ask to use another identifier.
  • Don't provide personal information on the phone, through the mail, or over the Internet unless you know who you are dealing with — especially if you did not initiate the communication.
  • Never click on links sent in unsolicited emails. Protect your home computer with up-to-date firewalls, anti-spyware, and anti-virus software. For more information, visit OnGuardOnline.gov.
  • Replace any obvious passwords you've set up, like your birth date, your mother's maiden name, or the last four digits of your Social Security number.
  • Keep personal information in a secure place at home, especially if you have roommates or employ outside help of any kind.

Monitor Your Accounts

  • If bills do not arrive as expected, or if you receive communication or statements about purchases you did not make, contact the company immediately.
  • If you receive unexpected credit cards, account statements, or denials of credit, contact the creditor immediately.
  • Visit www.AnnualCreditReport.com or call 1-877-322-8228 to order a free credit report each year from the three nationwide consumer reporting companies — Equifax, Experian, and TransUnion. Or write: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Fight Back

  • Place a "Fraud Alert" on your credit reports, which entitles you to free copies of them, and review the reports carefully. The alert requires creditors to take extra precautions before they opening or changing new or existing accounts in your name. There are toll-free numbers for placing an initial 90-day fraud alert; a call to one company is sufficient:
    • Equifax: 1-800-525-6285
    • Experian: 1-888-EXPERIAN (397-3742)
    • TransUnion: 1-800-680-7289
  • Close any accounts that have been tampered with or established fraudulently, and contact the security or fraud departments of each company where an account was opened or changed without your okay. Follow up in writing, with copies of supporting documents. Use the ID Theft Affidavit at ftc.gov/idtheft to support your written statement. Ask for verification that the disputed account has been closed and the fraudulent debts discharged.
  • Keep copies of documents and records of all conversations about the theft.
  • File a report with law enforcement officials and keep copies to provide creditors with proof of the crime.
  • Report the theft to the Federal Trade Commission.
    • Online: ftc.gov/idtheft
    • By phone: 1-877-ID-THEFT (438-4338) or TTY, 1-866-653-4261
    • By mail: Identity Theft Clearinghouse, Federal Trade Commission, Washington, DC 20580

Deter, Detect, Defend.

DETER identity thieves by safeguarding all financial account numbers and information.

DETECT suspicious activity by routinely monitoring your financial accounts and billing statements.

DEFEND against ID theft by reporting it to the authorities as soon as you suspect a problem.

If you are ever concerned you might be a victim of identity theft, please contact MWRD Employees' Credit Union as soon as possible at (312) 751-3111 and let us help you minimize the damage to your financial accounts and your credit reputation.