FORENSIC ACCOUNTING - BA124 - Fall 2007Slide 13-1

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Todays Topics

• Consumer Fraud

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Consumer Fraud

• Fraud against individuals
• Number one consumer fraud Identity Theft

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Identity Theft

• Involves over 42 of reported frauds
• Use of name, address, SSN, band or credit card
  PINs to commit fraud
• Prevention is the key

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Identity Theft Conversion

• Purchase of large-ticket items
• False car or real estate loans
• Creation of phone or cell accounts
• Counterfeit checks or debit cards
• Creation of new bank accounts
• False filing of bankruptcy
• False filing of police information
• Creation of new credit card accounts
• Change of mailing address

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Identity Theft Cycle

• Stage 1 Discovery
• Gain information
• Verify information
• Stage 2 Action
• Document accumulation
• Action cover-up
• Stage 3 Trial
• 1st 3rd dimensions (gas station, store, new
  account)

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How to Steal Someones Identity

• Obtaining info falsely
• Going through the trash
• Skimming credit cards
• Hacking
• Stealing wallets
• Outright theft from the home
• Stealing mail
• False change of address form
• Shoulder surfing
• Phishing or Pharming

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How to Protect Yourself

• Guard your mail
• Do not use pre-approved credit cards
• Guard SSN and PINs
• Guard all personal information
• Guard your trash
• Protect your wallet
• Protect and change your passwords
• Protect your home
• Protect your personal computers
• Use the Gramm-Leach-Bliley Act to opt out of
  having your information sold

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Post Event Activity

• Report event promptly
• Collect evidential matter
• Contact FTC regarding identity theft
• Homeland security implications

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Other Forms of Consumer Fraud

• Foreign Advance-Fee Scams
• Work at Home Schemes (MLMs)
• Bogus Mystery Shopping Scams
• Telemarketing Scams
• Investment Scams (Ponzi Scams)