Identity Theft

1

• Identity Theft
• Presented by
• Dennis F. Dycus, CPA, CFE, CGFM
• Association of Government Accountants
• Southeast Regional PDC

2
Introduction

• Identity Theft
• What is it?
• To knowingly transfer or use, without authority,
  a means of identification of another person with
  the intent to commit, or to aid or abet, any
  unlawful activity that constitutes a violation of
  Federal law,or that constitutes a felony under
  any applicable State or local law.

3
Introduction

• Identity theft is an up-and-coming fraud that is
  non-discriminatory
• That an estimated 700,000 to 1 million people
  were victims in 2001
• Actual losses to victimized individuals and
  institutions totaled 442 million in 1995 and
  increased to 745 million in 1997 (69 increase)

4
Introduction

• (In 1997) Projected to 2002 Excess of Two
  Billion Dollars
• On average, 1 in ever 5 households have
  experienced some form of identity theft

5
Introduction

• ID Theft almost always involves a financial
  services institution in some way as a
• Lender
• Holder of a bank account
• Holder of a credit card or
• Holder of a debit card,
  because ..
• Thats where the money is!

6
Introduction

• For victims, costs can be significant and
  long-term
• Illegal debts in the tens of thousands of
  dollars (Although not liable)
• Consumers credit history scarred
• Denial of loans, mortgagees and employment
• Bad credit report
• Criminal history

7

• My purse was stolen in December of 1990. In
  February 1991, I started getting notices of
  bounced checks. About a year later, I received
  information that someone using my identity had
  defaulted on a number of lease agreements and
  bought a car. In 1997, I learned that someone
  had been working under my Social Security number
  for a number of years. A man had been arrested
  and used my SSN on his arrest sheet.

8

• Theres a hit in the FBI computers for my SSN
  with a different name and gender. I cant get
  credit because of this situation. I was denied a
  mortgage loan, employment, credit cards, and
  medical care for my children. Ive even had auto
  insurance denied, medical insurance and tuition
  assistance denied.
• From a consumer complaint to the FTC,
• January 2, 2001

9
Introduction

• Its so quick!
• and
• Its so easy!
• And its growing!

10
Introduction

• Consumer inquires to the Trans Unions credit
  bureaus Fraud Victim Assistance Department
• 1992 ------ 35,235
• 2001 ------ over 1,000,000
• Social Security investigations related to misuse
  of the SS number
• 1996 ------ 305
• 1997 ------ 1,153 (378 increase)

11
Introduction

• Update
• Last year, about 9.9 million Americans found
  that people took money from their bank accounts,
  or obtained credit cards or official documents in
  their names
• The FTC estimated the ID theft costs consumers
  and businesses 50 billion last year (2003)

12
Introduction

• Update
• Cost to the victims of ID Theft 5 Billion
• 60 Hours of time to attempt to correct financial
  records
• Average credit card loss - 10,200

13
The Profile

• Someone who wishes to conceal his or her identity
  
• Been convicted, served time in prison and looking
  for a safer way to commit a crime and stay out
  of prison

14
The Profile

• College kid looking for an easy way to work his
  or her way through school
• Landlord
• Rental car agents
• Illegal aliens needing an identity
• Illegal telemarketers

15
Common Ways of Obtaining Information

• Soliciting identifiers through false job
  application schemes
• Telephone companies, health clubs and schools
• Certifications, licenses placed on workplace
  walls
• Sorting through discarded trash
• Shoulder surfing

• Rental and loan applications
• Rifling through co-workers desk drawers
• Theft of mail incoming or outgoing
• Using an accomplice within the organization
• Using pretext, ruse, or gag calls

16
Common Ways of Obtaining Information

• From your SS printed on your company ID badge
• Information from your medical files
• Credit bureau reports
• Drivers license

• Change of address form
• Postal employees steal your mail or new credit
  card
• Purchased from inside sources
• Your credit card is swiped by the server at
  your favorite restaurant
• Information on your company expense report

17
Identity Theft

• Question?
• Whats in your files?
• Do you know who has access to them, and how?

18
For Starters

• Name, Address and Telephone Number
• Bank Account Numbers
• Credit Card Numbers
• Investments
• Canceled Checks
• Personal Tax Returns
• Business Tax Returns
• Federal EIN Number
• Social Security Numbers
• Drivers License Numbers

19
Common Ways of Obtaining Information

• Public records
• The Internet

20
Credit Bureaus

• Equifax - www.equifax.com To order a report,
  call 1-800-685-1111 To report fraud, call
  1-800-525-6285
• Experian - www.experian.com To order a report,
  call 1-888-397-3742 To report fraud, call
  1-888-397-3742
• Trans Union - www.tuc.com To order your report,
  call 1-800-888-4213 To report fraud, call
  1-800-680-7289

21
State of AlabamaORDER AL99Cost 65
22
Tennessee IDORDERTN99 Cost 65Authentic
hologram for 44
23
Denmark IDOrderDENMARK99COST 79
24
US Social Security CardORDER SSCARDUS9999
25
Preventing False Identity Fraud

• Before providing personal information, make sure
  the individual or business requesting it has a
  valid reason for requiring the information
• Never write your credit card numbers or Social
  Security number on checks or on the outside of
  envelopes
• Dont give account numbers over the telephone or
  to persons/companies you are not familiar with

26
Preventing False Identity Fraud

• Keep all financial documents in a secure place
• If you have your drivers license information
  preprinted on your checks, shred canceled checks
  before discarding them
• Check your financial information regularly
  looking for what should and shouldnt be there

27
Preventing False Identity Fraud

• Obtain a copy of your credit report on a regular
  basis
• Tear up or shred preapproved credit applications
• Have yourself taken off of pre-screened lists
• Mail bills from the post office or your business
  location
• Consider having your name and telephone number
  removed from the telephone directory or having
  the address removed

28
Preventing False Identity Fraud

• Dont provide personal information over the
  telephone unless you initiated the call and know
  who you are speaking with
• If telemarketing companies call, tell them
  Under the federal Telephone Consumer Protection
  Act, I want to be on your do not calllist
  (State of Tennessee has a Do Not Call list
• TCA, Section 65-4-401 et seq.
• (www2.state.tn.us/tra/nocallform.htm)
• Keep your birth certificate in a safe place

29
Preventing False Identity Fraud

• Place a fraud alert on your credit bureau lists
• Close all unused credit card accounts
• Use passwords that will be difficult to crack
• Dont put your Social Security number on any
  document that you arent legally required to
• Shred any papers with financial information and
  identifiers rather than simply throwing them in
  the trash

30
What To Do If Your Identity Is Stolen

• Start keeping detailed records
• Notify all creditors on your credit report
• Check for and repair further breaches of your
  identity
• Notify law enforcement agencies File a
  complaint and retain a copy
• Call the FTCs Identity Theft Hotline at
• 1-877-IDTHEFT (438-4338)

31
Tracking Down the Thief

• Obtain videos from retailers showing the
  perpetrator making purchases using the victims
  identity
• Obtain a copy of the perpetrators picture on the
  fictitious drivers license
• Track down addresses and telephone numbers that
  do not belong to the victim but show up in their
  file
• Have the victim notify the fraud examiner when
  further breaches occur
• Report the fraud to law enforcement

32
Tracking Down the Thief

• Establish surveillance of the address in question
  
• Have overnight delivery services flag the
  address in question
• Subpoena telephone records for the telephone(s)
  being used by the perpetrator
• Contact credit bureaus and have them flag the
  true account holders file
• Contact the Social Security Administration to
  determine if the number is listed twice in the
  system

33
Confronting the Fraudster

• On initial contact, call the fraudster by the
  wrong name generally he or she will then produce
  identification in the name of the victim
• Try to establish the fraudsters true identity
• For safety reasons use caution when confronting
  the thief

34
CRIMINAL STATUTES

• Federal Statutes
• Identity Theft and Assumption Deterrence Act
• State Laws
• Most states have also passed laws related to
  identity theft
• TCA, Section 65-4-401 et seq.

35
Introduction

• Ive spent the last two years trying to repair my
  credit report (a very frustrating process) and
  have suffered the ill effects of having a marred
  credit history. Ive recently been denied a
  student loan because of inaccurate information on
  my credit history.
• From a consumer complaint to the FTC,
• February 22, 2001

36
Introduction

• My wallet was stolen in December 1998. Theres
  been no end to the problems Ive faced since
  then. The thieves used my identity to write
  checks, use a debit card, open a bank account
  with a line of credit, open credit accounts with
  several stores, obtain cell phones and run up
  huge bills, print fraudulent checks on a personal
  computer bearing my name, and more.

37

• www.consumer.gov/idtheft

38

• ARE YOU BRAVE ENOUGH TO TAKE A TEST?

39
Are You At Risk for Identity Theft?

• I receive several offers of pre-approved credit
  every week. (5 pts) Add 5 more points if you do
  not shred them before putting them in the trash.
• I carry my SS card in my wallet. (10 pts)
• I do not have a PO Box or a locked, secured
  mailbox. (5 pts)
• I use an unlocked open box at work or at my home
  to drop off my outgoing mail. (10 pts)
• I carry my military ID in my wallet at all times.
  (10 pts)

40
Are You At Risk for Identity Theft?

• I do not shred or tear banking and credit
  information when I throw it in the trash. (10
  pts)
• I provide my SSN whenever asked, without asking
  questions as to how that information will be
  safeguarded. (10 pts) Add 5 points if you
  provide it orally without checking the see who
  might be listening.
• I am required to us my SSN at work as an employee
  or student ID number. (5 pts)

41
Are You At Risk for Identity Theft?

• I have my SSN printed on my employee badge that I
  wear at work or in public. (10 pts)
• I have my SSN or driver's license number printed
  on my personal checks. (20 pts)
• I am listed in a Whos Who guide. (5 pts)
• I carry my insurance card in my wallet and either
  my SSN or that of my spouse is the ID. (20 pts)

42
Are You At Risk for Identity Theft?

• I have not ordered a copy of my credit reports
  for a least 2 years. (10 pts)
• I do not believe that people would root around in
  my trash looking for credit or financial
  information. (10 pts)
• 100 points -Your are at a high risk
• 50-100 points Your odds of being victimized are
  about average. Higher if you have good credit.
• 0-50 Congratulations. You have a high IQ.
  Keep up the good work and dont let your guard
  down.

43

• SWEET DREAMS
• (Or in some cases, Nightmares!)

44

• Identity Theft
• Presented by
• Dennis F. Dycus, CPA, CFE, CGFM