Two years ago, I received a letter addressed to me and a mystery man, Thomas Miller, from the Ohio Department of Taxes asking for further financial documents before issuing me a tax refund.
Then, Thomas Miller and I received a letter from Michigan with the same request. A couple days later, Hawaii sent Thomas Miller and me a check for more than $5,000 to my address in Cornwall.
Well, I did not know Thomas Miller and have never conducted business in any of those states or even visited Hawaii. By now, I knew I was a victim of identity theft and had begun implementing safeguards to protect my money, my credit and my potential to be linked to a fraud scheme. Of course, my husband and I wondered exactly what kind of scheme involves the victim receiving a legitimate check for thousands of dollars.
A very common scheme, it turns out. Someone, somehow, had stolen my name, address, Social Security number and other personal information to create an identity and apply for earned-income tax credits in states across the country. Many states have laws requiring them to issue tax refunds and credits quickly, even before the tax return is reviewed. Often that money is deposited directly into a bank account. The criminal empties the bank account as soon as the money goes in, then closes it and vanishes.
While I suffered no financial loss in this fraud scheme, there are many other schemes that go after your money, not just your identity. Let’s take a look at a few, review some simple preventative steps, and address what to do if you fall victim.
E-MAIL
E-mail remains a potent place for fraud, and the click of a mouse is all it might take for criminals to gain access to your banking information and identity.
The scams — called “phishing” — are as simple as creating an e-mail that looks like it came from a bank, investment company or insurance firm, and telling a recipient they need to click on a link or attachment immediately to deal with something important. Once that link is clicked on or downloaded, a virus — called malware — enters your computer and searches out credit card information, bank account numbers, and shopping habits, and gives that information to the scammers. With that information, they are then free to clean out your accounts, and set up credit cards in your name.
PREVENTION: Banks and similar firms do not ask clients to click on links or download attachments. If your account needs attention, they tell you to enter your account through the bank’s website, which can only be done with your username and password. If you are asked to do anything different, call first to make sure it came from them.
Also, hover your curser over the sender’s name in the e-mail. Many computers will pop up the sender’s true e-mail address, and if it is not from an address that you recognize, double check by phone.
Be wary of urgency. If the e-mail says that you must take action now or suffer a consequence (“We will turn off your credit card if you do not fix this!”), then call your bank or financial firm to double check — and don’t call the number listed on the e-mail.
Always delete e-mails that appear to be scams or contain malware.
WEBSITES/INTERNET
Other online scams to steal personal information include websites that mimic official bank websites, but the address might be a common typo. Double-check the address if you are suspicious. Another common scam is a “pop-up” on your screen posing as an anti-virus warning, asking you to click on it, which will actually result in a virus being downloaded. Some websites are designed to sneak malware on to your computer while you visit it. Sites dealing in pornography, illegally available music, movies and TV shows, and other questionable activities can be sources of malware.
PREVENTION: A good quality anti-virus software that is updated regularly, never allowed to lapse and is used to scan for problems is the best defense against malware.
THE PHONE
Phone scams continue to be successful, and they follow essentially the same idea as e-mail. A caller will pose as a bank, credit card issuer or other financial person, and say there is a problem that must be addressed immediately. They will then ask for account information, your Social Security number or credit card numbers, and, if the victim believes them, that is all it takes. If there is a sense of urgency, be very suspicious.
Banks, credit card companies, etc., do not operate this way. Put simply, never give out account information over the phone to someone who has called you. This includes charitable contributions, such as college alumni associations. Ask anyone you are interested in contributing to, to send their information by mail.
If someone has left an urgent message on your voice mail, also be very wary. I recently had a message from someone in the “Legal Services Department” telling me something that seemed important but was garbled, except the call back number. I Googled the phone number and discovered it was a common scam, including the garbled portion that was meant to prompt worried people to call back.
The Grandson Scam: A common phone ploy, generally targeted at trusting seniors, is a loved one (usually a grandchild) in deep trouble and needing money. Often the caller says he is in jail or just been in an accident and needs money wired immediately. Always double-check this story with the child’s parent or someone else who can verify it. It’s surprising that people fall for this, but in the heat of the moment, love can conquer reason.
RELATIONSHIP THEFT
Unfortunately, exploiting personal relationships as part of a scam is all too common. This is simply providing financial information to someone considered trusted, only to find they have betrayed that trust and stolen from you. A growing trend in this area is so-called mobile banking, or using a smart phone for transactions and deposits. What might sound like the offer to do a favor, such as depositing a check in person or using a smart phone app, usually requires providing account information to someone. As Ronald Reagan often said about the leaders of the Soviet Union: Trust but verify.
DOCUMENT THEFT
Stealing documents from the trash, the mail or elsewhere remains a tried and true method for scammers. While there is little you can do about the people you hand your credit card to in the course of shopping and eating out, you can be careful with your own financial records at home by shredding them before recycling them or throwing them away. For those records you normally store for long periods and in higher volumes, take advantage of shredding services offered by your bank or places like the UPS Store. Shredding services are usually very secure, with documents kept under lock and key until destroyed.
STAY VIGILANT
Keeping a close eye on your finances and credit are the best way to steer clear of losses due to fraud and identity theft. This means reviewing with great care your credit card bills and the listed transactions. It means watching your bank accounts for withdrawals that seem suspicious, even if they are small.
It is also a good idea to check your credit rating with each of the credit rating agencies: Equifax, Experian and TransUnion. This can be done for free once a year through www.annualcreditreport.com. The best thing to do is check with one different company every four months, thus producing three reports per year for free.
Here is what to look out for on your credit report: Credit inquiries you did not initiate by opening a credit card or applying for a loan; accounts you did not open; unexplained debts; and changes in personal information — such as the addition of “Jr.” after your name — that don’t make sense.
WHAT TO DO
If you have become a victim of fraud or identity theft, call the police and your financial institutions immediately. A bank or credit card company can put a hold on your accounts or close them to prevent further loss.
A police report is vital. After my identity was stolen, the Vermont State Police provided me with a complete report and, most importantly, a police report number. This number is key in reporting fraud and theft and protecting yourself from being held responsible for a criminal’s action. The police are also well-informed in the steps you should take after reporting the problem.
Finally, it is a good idea to block access to your credit rating at the three companies listed above for at least 90 days. With a police report number, this can be done for free and extended to seven years. After my identity was stolen, I chose to freeze my credit at all three agencies and lift that freeze temporarily when needed.
Mary Conlon is a certified Professional Daily Money Manager based in Cornwall.