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| Protecting Your Money & Identity |
Protecting Your Money and Identity
Personal Security Tips from a Retired State Police Detective and Bank Security Officer - by Dane Shortsleeve, Chittenden Bank
Do you have to be suspicious these days in order to survive? If you want to hang on to your hard-earned money, you do.
More and more consumers are losing money to frauds and scams coming from telemarketers and the Internet. These frauds take all sorts of forms, including fake checks, bogus lotteries and phony job offers. Identity theft will affect nearly 10 million Americans this year. Identity thieves are using new tricks to steal your good name.
To protect yourself, you need to learn about some of the scams that are being used.
The Overpayment Scam
One of the most common scams in operation is the Overpayment Scam. You, the victim, will receive a counterfeit money order or check in the mail for any number of reasons. The checks and money orders will look convincingly real. The stories that they come with will also be smooth and believable.
It may be the payment for an item you have been attempting to sell, either on the Internet or through a newspaper ad. Perhaps you are trying to rent out your apartment. You may have been notified of winning a large prize, such as an international lottery. You may have met someone in an Internet chat room and have been asked to cash a check as a favor.
These checks and money orders have one thing in common: They are "too large." You are expected to deposit the funds you received and then wire a lesser amount of money back to the sender or to another address provided.
The deposited check will be identified as counterfeit. Unfortunately, it is only after you have wired funds to the swindler that you learn this. The money you wired is gone. The funds cannot be recalled. Your bank will not replace them.
Remember that although your bank may make the money from the deposit available to you at first, this is no guarantee that the check is authentic. When you endorse and deposit the check you receive, you are vouching for the validity of that check. If the check turns out to be counterfeit, you will have to make up for the loss of any money you withdraw from that deposit.
The only real defense against the counterfeit check is to contact the account holder himself or herself. Contacting the bank the check was drawn on will only confirm whether the account exists, not whether the check was legally issued. The best thing to do is have any check you receive verified before even depositing it into your account.
Counterfeit Money Order
According to the U.S. postal inspector, there was a 1,000 percent increase in illegal use of money orders between 2004 and 2005. Nearly 78,000 counterfeit money orders totaling $85 million were passed in 2005. Most came from Nigeria, but a significant portion also came from Canada and the United Kingdom.
They are received via common fraudulent schemes, including Internet sales, work-at-home scams, or solicitations in chat rooms.
In order to determine whether a money order you have received is genuine, call the Money Order Verification System toll-free at 1-866-459-7822. Enter the eleven-digit number of the money order, followed by the dollar amount and the six-digit post office identification number listed on the front of the money order. Here is a tip: If you receive money orders with serial numbers that are sequential, the money orders are bogus.
Updates on money orders can be found at: http://www.usps.com/missingmoneyorders/security.htm
The Lottery Scam
Regardless of how you are notified that you have won a foreign lottery - through e-mail, regular mail, fax, or telephone - remember this: it is a scam.
According to the Federal Trade Commission (FTC), it's illegal for U.S. citizens to enter foreign sweepstakes and lotteries. No legitimate lottery is going to be contacting you or your business from a foreign country.
No matter what storyline or explanation the person who notifies you gives, and no matter how pleasant and convincing he or she seems, you didn't win a lottery. If you have been told you won a foreign lottery, don't fall for it. We all should know that if we didn't buy a ticket, we didn't win!
Even if you are provided with an official-looking check to cover the necessary taxes and "processing fees," you didn't win. You will be instructed to deposit this check and wire funds back in order to collect your winnings. If you do this, you will lose any money you wire away.
The Job Resume Scam
After posting your job resume on an Internet employment site you are contacted by a company with a job offer. The company may tell you that they have problems accepting money from U.S. customers and they are looking for financial representatives to handle the payments.
You will be offered the position of "financial representative" and asked to open a bank account to deposit funds the company receives. You may be told you can use your own bank account. First, you deposit the checks they send to you. You then withdraw the funds in cash in order to wire the funds back to the company, of course keeping 5 to 15 percent as payment for handling the transactions.
The checks sent to you by the company will be counterfeit. If you wire any funds back to them, you will lose the money. In addition, if you use your own account, the crooks may attempt to take money from it.
How Do You Protect Yourself from Fraudulent Payments?
If you are selling items on the Internet, be very skeptical of any offers:
- from overseas from a person you do not know
- if you are paid by cashier's check
- rom buyers sending more than the purchase price
- from buyers who are more worried about the payment than the shipping of the actual item
- from buyers who show little interest or concern as to the condition of the item they are buying
Any request from someone you don't know to wire money should make you immediately suspicious. If that is part of the deal, then it's a scam.
You should not accept funds wired to you from a stranger. Why? Because you have no way of verifying the source of the funds. If you accept the funds, you may find out later that the source is a forged cashier's check.
Jury Duty Scam
A recent identity theft fraud trend involves a person calling to tell you that an arrest warrant has been issued in your name because you failed to report for jury duty. Of course, if you are caught off-guard by this call and are worried about being arrested, you might provide the caller with personal information to confirm that you are the person they are talking about. Many consumers have given out Social Security numbers, dates of birth, and even credit card numbers.
This information will be used by the crooks to create new identities or acquire credit cards in your name.
The FDIC is aware of e-mails appearing to be sent from the FDIC that ask recipients to open and review an attached file. Currently, the subject line of the e-mail states: "Funds wired into your account are stolen." The e-mail is fraudulent and was not sent by the FDIC.
The fraudulent e-mail tells the recipient that proceeds from identity theft crimes have been wire-transferred into their bank account. The e-mail then directs the recipient to open and review an attached copy of their bank account statement and to contact their bank account managers.
The attached file is actually an executable file containing malicious code or software. Recipients should consider the attached file as a malicious attempt to collect online banking credentials or other personal and confidential information that could be used to gain unauthorized access to on-line banking services or perpetrate identity theft and other criminal activities.
Recipients of the fraudulent e-mail should not reply and should not attempt to open the attached file. According to reports received by the FDIC, many antivirus software programs have been detecting and removing the malicious attachment before the e-mail is delivered. However, if a recipient does open the attachment, the FDIC recommends updating anti-virus software patches and performing a complete scan of the computer and network, if applicable. If a computer becomes infected and the user encounters difficulties removing the malicious code, users should contact their anti-virus software vendor. The FDIC highly recommends using anti-virus software.
For additional information about safe online banking and avoiding online scams, visit http://www.fdic.gov/consumers/consumer/guard/.
For your reference, FDIC Special Alerts may be accessed from the FDIC's Web site at www.fdic.gov/news/news/SpecialAlert/2008/index.html. To learn how to automatically receive FDIC Special Alerts through e-mail, please visit www.fdic.gov/about/subscriptions/index.html.
| Sandra L. Thompson Director |
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Division of Supervision and Consumer Protection
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The FDIC does not send unsolicited e-mail. If this publication has reached you in error, or if you no longer wish to receive this service, please unsubscribe.
"Nigerian" solicitations have been around for decades. Some consumers receive multiple offers daily from Nigerians or others promising big profits in exchange for help moving large sums of money out of their country. Here's how they work:
· Claiming to be African officials, businesspeople, surviving spouses or others, con artists politely propose to transfer millions of dollars through your bank account. You get a percentage of the money, but you also have to pay a fee. If you respond to the offer, you may receive official looking documents or even a bank account number. However, once you wire the funds to the scammer, your money is gone and you receive nothing in return.
If you are tempted to respond to an offer, ask yourself, why would a stranger pick you to share a fortune with and why share your personal financial information with someone you do not know?
For more information about these scams visit the following websites:
www.justiceonline.org/consum/nigerian.html
www.secretservice.gov/alert419.shtml
http://travel.state.gov/tips_nigeria.html
If you have been a victim of this type of scam, call the Vermont Attorney General's Office Consumer Assistance Program toll-free at 1-800-649-2424 or email consumer@uvm.edu
Joint Release Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
National Credit Union Administration
Office of the Comptroller of the Currency
Office of Thrift Supervision
Federal Bank, Thrift and Credit Union Regulatory Agencies Provide Brochure with Information on Internet "Phishing"
The federal bank, thrift and credit union agencies today announced the publication of a brochure with information to help consumers identify and combat a new type of Internet scam known as "phishing."
The term is a play on the word "fishing," and that's exactly what Internet thieves are doing - fishing for confidential financial information, such as account numbers and passwords. With enough information, a con artist can run up bills on another person's credit card or, in the worst case, even steal that person's identity.
In a common type of phishing scam, individuals receive e-mails that appear to come from their financial institution. The e-mail may look authentic, right down to the use of the institution's logo and marketing slogans. The e-mails often describe a situation that requires immediate attention and then warn that the account will be terminated unless the e-mail recipients verify their account information immediately by clicking on a provided link.
The link will take the e-mail recipient to a screen that asks for account information. While it may appear to be a page sponsored by a legitimate financial institution, the information will actually go to the con artist who sent the e-mail.
The federal financial regulatory agencies want consumers to know that they should never respond to such requests. No legitimate financial institution will ever ask its customers to verify their account information online.
The brochure also advises consumers:
* Never click on the link provided in an e-mail if there is reason to believe it is fraudulent. The link may contain a virus.
* Do not be intimidated by e-mails that warn of dire consequences for not following their instructions.
* If there is a question about whether the e-mail is legitimate, go to the company's site by typing in a site address that you know to be legitimate.
* If you fall victim to a phishing scam, act immediately to protect yourself by alerting your financial institution, placing fraud alerts on your credit files and monitoring your account statements closely.
* Report suspicious e-mails or calls to the Federal Trade Commission through the Internet at http://www.usps.com/missingmoneyorders/security.htm, or by calling 1-877-IDTHEFT.
The interagency brochure is available on each agency's web site and financial institutions are encouraged to download the camera-ready file for use in their own customer-education programs.
Media Contacts
Federal Reserve Susan Stawick (202) 452-2955
FDIC David Barr (202) 898-6992
NCUA Cherie Umbel(703) 518-6330
OCC Kevin Mukri (202) 874-5770
OTS Erin Hickman (202) 906-6677
