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       FREEZING CREDIT IS BEST DEFENSE AGAINST IDENTITY THEFT

        IDENTITY THEFT DECLINED 15.9 PERCENT IN 2007 FROM 2003

      IDENTITY THEFT AND WHAT YOU CAN DO TO PREVENT

      IDENTITY THEFT USING THE JURY DUTY SCAM

      IDENTITY THEFT: THE BUST-OUT SCHEME

       BEFORE TRANSFERRING A CREDIT CARD BALANCE

      TAKE STEPS TO PROTECT YOURSELF

    BEFORE TRANSFERRING A CREDIT CARD BALANCE

       MORTGAGE FRAUD INCREASES 800 PERCENT IN 2007

     THEFT OF PERSONAL DATA REACHES UNPRECEDENTED LEVEL IN 2007

     STATE LEGISLATORS FOCUS ON IDENTITY THEFT

     IDENTITY THEFT AND WHAT YOU CAN DO TO PREVENT

    STATES PUSH LEGISLATION TO COMBAT IDENTITY THEFT

    IDENTITY THEFT USING THE JURY DUTY SCAM

    IDENTITY THEFT: THE BUST-OUT SCHEME

IDENTITY THEFT LOSSES DECLINE BY 12 PERCENT IN 2006

FTC LISTS IDENTITY THEFT AS #1 FOR THE SIXTH STRAIGHT YEAR

IDENTITY THEFTS COSTS CONSUMERS $57 BILLION IN 2005

TWO INDICTED IN SEVEN MILLION DOLLAR-PLUS CREDIT CARD FRAUD

CREDIT CARDS’ IMPROVE E-SECURITY

MAN INDICTED FOR CREDIT CARD AND FALSE IDENTIFICATION FRAUD

MAN SENTENCED TO FOUR YEARS FOR ID THEFT

HOW TO AVOID BEING A VICTIM OF CHECK WASHING

CREDIT CARD OFFERS RESULT IN RECORD LOW RESPONSE RATES

Associated Press - November 5, 2008

Chicago Tribune - October 1 2008

An Alsip woman was charged with three counts of felony identity theft after she used another woman's identification to buy about $11,000 worth of jewelry at several stores in Chicago Ridge Mall.

Sara Rehling, 23, was arrested on September 24, 2009. Investigators learned that Rehling reportedly came into possession of the victim's identification stemming from a car burglary in Chicago on September 16th. Rehling used the information to open three instant credit accounts at the stores before buying the jewelry, which she sold to a pawnshop for $1,000, police said. All stolen items were recovered and Chicago police are investigating the burglary.

While stolen wallets and Dumpster diving remain popular means of obtaining victims' information, the "most imminent threat" in identity theft is the growing number of companies that are transferring to wireless networks and are not encrypting the wireless transmission, making it easy for thieves to intercept information, said Jay Foley of Identity Theft Resource Center.

Others worry social networking sites are facilitating ID theft. Groups have formed on Facebook warning users not to put too much information on their profiles, such as exact birthdays and addresses, because thieves can use that information to pass themselves off as you.

Nishay Sanan, a Chicago defense attorney who represents people accused of identity theft, said a common method among his clients is to attach a "skimming" device to a credit card or ATM machine, collecting account data when a card is swiped. Perpetrators run the gamut, from restaurant employees to family members, but the motivation tends to be the same. "Usually it's just greed," Sanan said.

A new Federal law went into effect on November 1, 2008 designed to strengthen policies of financial institutions against identity theft. The new federal identity theft regulations requiring financial institutions and other creditors known as FACTA (Fair and Accurate Credit Transactions Act), the rules require covered entities to re-examine their ID theft prevention policies and implement new procedures and business practices. More specifically, FACTA requires a written ID theft prevention policy that includes polices that identify "patterns, practices or specific activities that could indicate identity theft," according to the FTC (Federal Trade Commission). Violators of the new rules can be subject to civil penalties of up to $2,500 per violation. Rules not only require a written ID theft policy that identifies patterns and practices that lead to identity but also a plan action when identity theft is detected.

The new regulations, also known as Red Flag rules have long been thought to only apply to financial institutions such as banks, savings and loans, mortgage lenders and credit unions, but include small and midsize businesses. While FACTS clearly targeting financial institutions, the rules also cover "any person or business" that arranges for customer credit. "A creditor includes anyone who regularly extends credit to their customers, but the definition is not limited to that and can be broader," said Frank Dorman, a spokesman for the FTC. The agency defines a creditor as "any entity that regularly extends, renews, or continues credit; any entity that regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who is involved in the decision to extend, renew, or continue credit."

A business alert issued by the FTC adds, "Accepting credit cards as a form of payment does not in and of itself make an entity a creditor." When asked if the Red Flag rules apply to SMBs, Steve Neville, Entrust's director of identity products and solutions, replied, "Technically not, but it is a devilishly detailed question." Neville said most companies that extend credit to customers are doing so through an intermediary such as GE Creditline. In that case, GE would assume responsibility for FACTA compliance. Companies that don't use intermediaries would be subject to the Red Flag rules. The FTC added the Red Flag rules to FACTA in January, 2008 and businesses are required to define policies for recognizing red flags in identity verification. Typical red flags include discrepancies in address histories, fraud alerts on consumer reports, and questionable use of Social Security numbers, credit freeze notifications and unusual patterns of customer activities. 

Once those definitions are in place, companies are then required to define appropriate courses of action to take.
The new Red Flag rules evolved over a long series of congressional hearings that sought to find the causes of identity theft, particularly phishing and pretexting, the practice of using false pretenses to obtain the telephone records of another person. Pretexting gained widespread notoriety in 2006 when Hewlett-Packard admitted it used pretexting to obtain the personal telephone records of board members and the media as part of its efforts to investigate boardroom leaks. In addition to HP, the hearings revealed many companies were being duped into turning over personally identifiable customer data. 

Awareness by consumers and creditors coupled with technological safeguards has helped curb cases of identity theft. The number of identity fraud victims in the United States was 8.1 million in 2007, a 3.6% decrease from the 8.4 million in 2006 and a 9.0 % decrease from 2005 according to Javelin Strategy & Research.
In addition, an amendment to the Consumer Fraud and Deceptive Business Practices Act will allow all consumers to block sales of information from their credit reports. Consumers 65 and older and victims of identity theft will be able to block information for free and others will pay a $10 fee.
The Mortgage Rescue Fraud Act will protect homeowners on the brink of foreclosure from fraudulent “rescue” schemes that trick them into selling their home for a fraction of its value.
An amendment to the state’s Identity Theft Law will extend the definition of the crime to include fraudulent use of personal identification numbers, passwords or user names which the AARP lobbied actively for these bills.

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       FREEZING CREDIT IS BEST DEFENSE AGAINST IDENTITY THEFT

Initiating a credit freeze on yourself is your best defense against the worst types of identity theft. Freezes have been available in some states for years, and they became available to all Americans last year. They are by far the best way to prevent a thief from opening new credit accounts in your name. By initiating a credit freeze, you are denying everybody access to your credit files at each of the three credit reporting bureaus. The only way a potential creditor can look at your frozen report is if you provide a personal identification code.

This also severely limits your ability to get approved for a loan or credit card. A business that is denied access to your credit report is likely to reject a request to open the new credit account or service.  The two primary drawbacks of locking down your credit with a freeze are cost (which is minimal) and inconvenience. TransUnion is temporarily offering a free credit security freeze of your TransUnion file, if you request it online at annualcreditreport.transunion.com/fa/securityFreeze/landing.

This saves you the freeze fee, which is $3 to $10 for most people, depending on your state. Individual states dictate the maximum it can cost to place freezes with each of the three credit bureaus, TransUnion, Euqifax and Experian. You need to freeze your credit file with each bureau. If your state has a maximum fee of $10 to freeze a report, you would have to pay $30 to freeze all three of your reports. Then when you wanted to apply for credit, you would have to supply your secret code and pay another $10 to lift a freeze at whichever bureau the creditor uses. Then you would pay another $10 to refreeze the file.

There is no cost for identity-theft victims, and some states charge lower fees or none for people 65 and older. Find out the rules for your state at FinancialPrivacyNow.org.  You can now remove the credit freeze in less than 15 minutes, a process that used to take up to three business days. And you can do it all online or over the phone.

Because of the three-day rule included in state laws, freezing your credit used to mean you couldn't get on-the-spot credit. For example, you might not have been able to open a department store charge card to receive an immediate discount or sign up for a wireless phone plan in a store. But as of September 1, 2008 several states started requiring electronically requested lifts within 15 minutes. In January, 2009 six more states will require the 15-minute lift. As a result, all three credit bureaus will now lift a freeze within 15 minutes for all consumers.

To obtain an on-the-spot lift of your credit freeze, you would find out which credit bureau the creditor wants to check. Call that bureau, provide your PIN and a method of paying for the lift, such as a credit card. You'll also have to specify how long you want the freeze lifted or, in some states, you can specify a certain creditor. If the sales representative in front of you has Internet access, you could also lift the freeze by providing that information at the credit bureau's Web site.

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       IDENTITY THEFT DECLINED 15.9 PERCENT IN 2007 FROM 2003

According to a Javelin Strategy & Research survey, as reported by the Privacy Rights Clearinghouse, the number of identity theft victims per year in the U.S. fell by 1.7 million  or 15.9 percent from 2003 (10.1 million) to 2007 (8.4 million); and the mean time required to undo the damage in each instance was down from 40 hours in 2006 to 25 in 2007. The number of victims and the amount defrauded is down and, most important, it takes less time to clean up the mess. The majority of financial losses in an identity theft are suffered by credit issuers and banks as victims are rarely held responsible for fraudulent debts incurred in their name, however victims often bear the responsibility of contacting their banks and credit issuers after an identity theft has occurred.

To prevent identity thieves from making you a victim, you should:

·        Do not provide personal information to people who contact you over the phone, through the mail, or by e-mail. Ask them how you can get in touch with them so you can investigate. You should check them with the Better Business Bureau or search the Internet for complaints.

·        Safeguard your Social Security number. This is probably the most important information about you so you should not carry the card with you, and, if possible, do not provide the number to anyone unless you must.

·        Keep sensitive documents in a secure place. Birth certificates, Social Security cards, tax returns, insurance policies, wills, etc. should go in a fireproof safe or at least a locked drawer at home, or in a safety deposit box in a vault.

·        Shred everything that has your name, address, and other personal information. Use a cross-cut shredder instead of a strip-cut shredder if possible, because cross-cutting creates fragments that are much harder to piece back together.

·        Protect your Personal Computer. Make sure you run a software firewall, antispyware, and antivirus software and make sure that you update these programs on a regular scheduled basis.

·        Protect your password. No tech or customer service rep should ever ask you what your password is. This is a dead giveaway that you're dealing with a potential identity thief or, at best, an incompetent support tech. Don't use a weak or obvious password like your birth date, or your child’s or pet’s name. Strong passwords incorporate capital and lowercase letters, numbers, and, if possible, non-alphanumeric characters.

·        Beware of phishing. Don't click links in unsolicited e-mail, and don't enter information on strange Web sites. Don't even enter information on familiar Web sites that have changed recently. Call the company and ask if they've redesigned their site. Always check a site's encryption before entering personal information by looking  for https:// in the address bar, along with an icon indicating that VeriSign or another independent party has certified the site as secure.

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It is important to recognize that there is no way to entirely protect yourself from identity theft because there are several places that have your private information that you have little or no control such as your insurance company, doctors' offices, your employer, etc.

According to the Federal Trade Commission’s (FTC) recent national survey on identity theft, more than three million Americans had their personal information stolen and used to open fraudulent bank, credit card or utility accounts, or used to commit other types of financial crimes.

Most victims of identity theft normally do not know they have been victimized until:

They are contacted by a collection agency over past due accounts they don’t know about.

They receive credit cards for which they did not apply;

Significant charges show up on a credit card bill for purchases they never made;

They notice unexplained charges or withdrawals on their bank accounts;

They are denied credit for no apparent reason;

They fail to receive bills or other mail, which may signal an address change by the identity thief;

A lender tries to repossess a car they did not know they owned;

They are contacted by the police after a crime is committed in their name.

If you become a victim, it is extremely important that you act immediately to stop the thief’s further use of your identity. Report the crime to the police. Call your bank and credit card issuers. Contact the fraud unit of the three credit reporting companies. Request that a “fraud alert” be placed in your file, as well as a victim’s statement asking that creditors call you before opening any new accounts or changing your existing accounts.

COMMON WAYS ID THEFT HAPPENS:

Identity thieves use a variety of methods to steal your personal information, including:

1.    Skimming. They steal credit/debit card numbers by using a special storage device when processing your card.

2.    Phishing. They pretend to be financial institutions or companies and send spam or pop-up messages to get you to reveal your personal information.

3.    Changing Your Address. They divert your billing statements to another location (typically, a mail box) by completing a "change of address" form.

4.    Dumpster Diving. They rummage through trash looking for mail, including bills, bank and credit card statements; pre-approved credit offers; and new checks or tax information.

5.     They steal personnel records from their employers, or bribe employees who have access.

Safeguard your information from Identity thieves by.

Inspect and review your credit report three times a year. The law requires the major nationwide consumer reporting companies—Equifax, Experian, and TransUnion—to give you a free copy of your credit report each year. Visit www.AnnualCreditReport.com or call 1-877-322-8228, a service created by these three companies, to order your free credit reports each year. You also can write: Annual Credit Report Request Service, P.O. Box 105281 , Atlanta , GA 30348-5281 .

Shredding financial documents and paperwork with personal information before you discard them.

Don't carry your Social Security card in your wallet or write your Social Security number on a check. Give it out only if absolutely necessary or ask to use another identifier.

Don't give out personal information on the phone, through the mail, or over the Internet unless you are sure that you know with who you are dealing.

Never click on links sent in unsolicited emails; instead, type in a web address you know. Use firewalls, anti-spyware, and anti-virus software to protect your home computer and keep these programs up-to-date. Don't use an obvious password like your birth date, your pets, children’s or mother's maiden name, or the last four digits of your Social Security number.

Keep your personal information in a secure place at home, especially if you have roommates, employ outside help, or are having work done in your house.

Identify suspicious activity by routinely monitoring your financial accounts and billing statements.  Be alert to signs that require immediate attention such as:

·       Bills that do not arrive as expected

·       Unexpected credit cards or account statements

·       Denials of credit for no apparent reason

·       Calls or letters about purchases you did not make

Your financial statements. Review financial accounts and billing statements regularly, looking for charges you did not make.

If you suspect that you are a victim of Identity theft, you should immediately:

1.      Place a "Fraud Alert" on your credit reports, and review the reports carefully. The alert tells creditors to follow certain procedures before they open new accounts in your name or make changes to your existing accounts. The three nationwide consumer reporting companies have 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

Placing a fraud alert entitles you to free copies of your credit reports. Look for inquiries from companies you haven't contacted, accounts you didn't open, and debts on your accounts that you can't explain.

2.      Close accounts. Close any accounts that have been tampered with or established fraudulently. Request verification that the disputed account has been closed and the fraudulent debts discharged.

3.      Call 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.

4.      Use the ID Theft Affidavit at ftc.gov/idtheft to support your written statement.

5.      File a police report. File a report with law enforcement officials to help you with creditors who may want proof of the crime.

6.      Keep copies of documents and records of your conversations about the theft.

7.      Report the theft to the Federal Trade Commission either online at: www.ftc.gov/idtheft or by phone at: 1-877-ID-THEFT (438-4338) or TTY, 1-866-653-4261 or by mail to: Identity Theft Clearinghouse, Federal Trade Commission, Washington , DC 20580

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       IDENTITY THEFT COSTS A RECORD $56.6 BILLION

Identity theft, the biggest source of U.S. consumer fraud costs a record $56.6 billion in cash, goods, and services. Two thirds of victims have no out-of-pocket expense (because banks and credit card companies seldom ask victims to cover any charges), for about 3 million victims, the average cost of repairing their credit was nearly $1,200 and for all victims the average time to set the record straight was 40 hours.
Fortunately, ID theft is declining after cases reported to the Federal Trade Commission (FTC) nearly tripled from 2001 through 2004, the number of identity fraud victims in the United States was 8.1 million in 2007, a 3.6% decrease from the 8.4 million in 2006 and a 9.0 % decrease from 2005 according to Javelin Strategy & Research. Awareness by consumers and creditors coupled with technological safeguards has helped curb cases of identity theft.

The most frequent source of information for ID thieves is you according to the Javelin survey, among victims who knew how their numbers were pilfered, 30 percent of frauds began with a lost or stolen wallet, checkbook, or credit card. So don't carry PIN codes for your plastic or your Social Security card. One in seven cases of ID theft traced to a source turns up a family member or other trusted associate the victim. Keep your checkbook, credit cards, and any important papers (such as mortgage, insurance, and investment records) under lock and key. Javelin found, frauds first noticed by victims were uncovered a month sooner than those financial institutions identified. Regularly checking credit card and bank statements, it's good to scan your credit history for inquiries on existing accounts and applications for new loans. You can get one free credit history annually from each of the three major bureaus (Experian, Equifax, and TransUnion) at www.annualcreditreport.com. By rotating your requests, you can receive a report every four months.

Households earning less than $50,000 are three times more likely to be victimized by fraud according to Javelin Strategy & Research. According to Frost & Sullivan, the amount of credit card fraud is projected to reach $15.5 billion, up from $7.5 billion in 2007. Deloitte says that 51% of external attacks on financial institutions were phishing followed by spyware at 48%. Recent laws in eight states let you freeze access to your credit file to keep anyone, legit or not from reviewing your standing or opening loans in your name. Freezes that used to be applied by credit bureaus only after ID thieves struck are available free by law to any citizen in Colorado and New Jersey. Consumers in California, Connecticut, Louisiana, Maine, Nevada, and North Carolina can stop credit tampering cold for a small fee, generally up to $10. And for another $5 or $10 the same eight states allow a credit thaw when you need a new loan. Freezes are also available by law to ID-theft victims in Illinois, Texas, Vermont, and Washington.

You should shred anything bearing sensitive information into a crosscut (or "confetti") shredder. This makes it virtually impossible for garbage divers to read your data or use credit card "convenience checks" and new offers. To make sure mail isn't diverted before it reaches the shredder, get your letters delivered to a secure location. A street-side mailbox is easily accessible by thieves. Police say these boxes are favored targets of ID thieves looking for checks to steal. A mail slot into the house is better and if this is not possible, consider renting a box at the local post office.

Spend less time sorting and shredding by opting out of solicitations for new credit cards, mortgages, or other loans. To eliminate future trash at its source, call the credit bureaus' dedicated line at 888-567-8688 from your home telephone or register at www.optoutprescreen.com. If you call, an automated voice-response system will request your name, telephone number, and Social Security number; don't worry, the credit bureau has it already as part of your credit history. You can opt out for five years or forever. (And if you haven't done so already, by all means register your phone numbers with the National Do Not Call Registry maintained by the FTC at 888-382-1222 or www.donotcall.gov. Unless they're from charities, political groups, surveys, or companies with which you have ties, telemarketers are barred from calling registered numbers. So you'll know any call you do get is suspect.) 
All it takes to empty your bank account is a signed check and a pan of acetone, the active ingredient in nail polish remover. The identity thief crook tapes over your signature front and back, and then soaks the check in acetone to wash away everything but the printer's ink and your signature. He then dries the check and carefully peels off the tape resulting in a blank check signed by you. In addition, thanks to "bounce protection" from banks, the scamster can even overdraw your account. You should use a uni-ball gel pen, the only one that resists washing. You can also use tamperproof checks. And keep phone numbers off your printed checks can also say less. them altogether. Order checks from your bank, not from independent vendors, and seek out security features such as paper that acetone stains.

Every home computer should have security virus, spyware and adware software that is updated regularly. You should be aware and resist the bait from con artists "phishing" for your private information via email. The unseen danger comes from "spyware," which sneaks onto your computer to track your actions online. One kind, known as adware, merely gauges your interests to help websites predict what advertising might grab your attention. A more sinister sort of spyware monitors your every keystroke and reports back to a waiting attacker. Spyware infiltrates your computer by hiding inside a downloaded program or by an email you open or Web link you click on. I recommend Ad-Aware, itself a free download, but one you can trust.

You can also get a second (and sometimes third) free email account from MSN's Hotmail, Yahoo!'s Mail, or Google's Gmail so you can segregate your online shopping from banking and private correspondence and don't use your name or a familiar word as part of any address. Scramble some letters and numbers instead. These measures will make it a lot harder for phishers to find you by chance and lure you to scam websites. To reduce the hazard posed by a pirated cash card, call your bank and request a per-day limit on ATM withdrawals from your accounts.

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More than 93 million personal data records have been lost or stolen since February 2005. That's on top of the tens of millions of records bought and sold annually by credit issuers, insurers, government agencies, data brokers and, of course, identity thieves. Your private information is accessible to hackers and company insiders who can profit by selling it on an online black market that didn't even exist. Most "identity theft protection services" are a waste of money and even the best are limited in what they can do. Credit monitoring services, for example, can neither tell you if someone is using your Social Security number to get a driver's license nor prevent ID theft. They just alert you sometime after the crime occurs.  You're entitled to a free credit report once a year from each of the major credit bureaus. Order one every four months by going to annualcreditreport.com or calling 877-322-8228. You can get another set of free reports if you call any one of the major bureaus and request that it place a 90-day fraud alert on your file. The alert tells lenders that are checking your report that they must call you before they extend credit in your name. 

Check your credit-card statement every month. Use cash or a credit card, not a debit card, when practical. Neither cash nor a credit card leaves any trace of your bank account information. Call the three major credit bureaus' toll-free line (888-567-8688) to opt out of prescreened offers of credit and insurance. Leave your Social Security card at home, and don't offer your number to anyone unless it's for tax, employment or credit purposes. Shred financial documents you no longer need. Ignore phone or e-mail solicitations or "security checks" from institutions you do business with unless you initiated the exchange. Your bank isn't sending you an e-mail asking for your account number and the IRS is not contacting you about a refund by 
Hackers across the globe are working 24/7 to find ways to steal your passwords or take control of your bank accounts. Keep your computer virus software up to date as attackers are constantly searching for flaws in your operating system, especially if you run Windows. Update your most critical software regularly which you can do automatically. Check your settings (under Control Panel in Windows and System Preferences on Macs) to make sure automatic updates are on. You must have antivirus, anti-spyware and firewall software. If you have unencrypted Wi-Fi, anybody can hop on to your network and use your bandwidth or watch what you do or even break into your computer. To foil them, set your router to encrypt your data. You usually have two choices: WEP or WPA. Choose WPA as it's tougher to break.  Make sure your computer is set not to share files with a network, and avoid typing in passwords or sensitive data, especially if you're on an unsecured Web page (one that doesn't start "https").  Use different passwords for your sensitive accounts that combine letters and numbers and are not a name or anything someone who knows a bit about you could guess.  Personal information can linger on your hard drive even if you think you deleted them. Before you throw or give away an old computer, wipe your hard drive clean with software that meets Department of Defense standards for data destruction. Disk wipers go for about $30, or you can download the free Darik's Boot and Nuke at dban.sourceforge.net. 

Homeowners facing mortgage foreclosure across the U.S. are being scammed by foreclosure “rescue” companies promising to save their house but that only take their money. The dismal forecasts for the housing and financial markets will result in an increase in consumers becoming victims to mortgage foreclosure scams. An estimated 1.8 million homeowners could lose their homes to foreclosure in the next two years. These people are desperately trying to save their home and unfortunately con artists are seeing their chance to make a fast buck off of troubled homeowners.

States with the highest foreclosure rates include Ohi0, Georgia and Colorado has been targeted by unscrupulous mortgage foreclosure rescue companies. Homeowners are either contacted directly by a mortgage foreclosure rescue company or came across a Web site while searching for help to stop foreclosure on their home. The companies claimed they would renegotiate the terms of their mortgages and stop foreclosure actions, or the homeowners would get their money back. Victims, who were desperate to keep their homes, pay as much as $1,500, however, in the end; these companies do very little work or often nothing at all. Most victims, not only lost their homes, but they also have not been able to get their guaranteed refunds from these companies.

In 2007, only two mortgage foreclosure rescue companies operated in the Charlotte area, but now the number has now jumped to 15 of which six have government actions against them including cease and desist requests, temporary restraining orders or consent judgments. There were 21 new companies offering mortgage foreclosure rescue opened in the Cleveland area in the past year. In the last 12 months, there were 322 complaints filed in the Clearwater , Florida area with the total amount of refunds requested by the complainants in the Clearwater area amounts to more than $600,000.

Homeowners facing mortgage foreclosure should:

If you feel you have been taken advantage of by an unethical mortgage foreclosure “rescue” company, file a complaint with your BBB at www.bbb.org.

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The Financial Crimes Enforcement Network fielded nearly 15,000 reports of suspicious mortgage-related activity in the first quarter of fiscal year ended December 31, 2008 and total over 60,000 annually. By comparison, the crimes network received a record 46,700 such reports in fiscal 2007, up from 35,600 in 2006. But the number of reports is probably only the tip of the fraud iceberg because only federally regulated institutions must file them; lenders are not required to do so and they make the bulk of all home loans.

Under one of the scams, builders, using inflating appraisals, would sell a $100,000 house for $120,000 and use the extra money to fund the buyers' down payments and closing costs. These incentives are not only built into the inflated purchase price, they also are not disclosed to the loan officer or the appraiser. There is an organized effort to conceal them" from lenders, which end up providing loans for more than the property is worth. There is a lot more involvement from real-estate agents since they are the ones shopping these loans to lenders.

Rescue scams aimed at owners facing foreclosure also have a new twist. Under the old ruse, troubled owners are tricked into signing their homes over with the promise that they will get them back when they get back on track. Owners are told to make their payments to the con man who will then forward them to the lender. But he collects money, and the house eventually goes into foreclosure. These days, the scam artists are selling the house to an unsuspecting buyer through another lender. This gives them "rent" from the original owner and a payoff from the sale of a house they took under false pretenses.

Then there's "puffing," a new wrinkle on flipping. Instead of buying a house on the cheap from a seller who wants out desperately and selling it an inflated price the next day, the "buyer" offers an inflated price while agreeing to kick back the difference at closing. Phony investment clubs also are on the rise in which investors are lured into joining with others to put their money into buying houses at distress-sale prices with the promise of big rewards when the houses are sold.
The few houses that are purchased are sold at inflated values to fictitious buyers. So now the thief not only has money from the unsuspecting investors, he also pockets the proceeds from the sale.

The FBI estimated that federal investigators are likely to uncover some $3 billion in mortgage losses. Previous government estimates have put losses at $1 billion to $2 billion. But analysts at Interthinx, the California fraud-detection company, recently called into question some $11 billion in loan applications—just from its own clients.

Reported mortgage fraud incidents rose 42 percent nationwide, with Illinois ranking 3^rd among the states reporting the highest number of cases. Florida ranked first, with properties accounting for nearly a quarter of all mortgage fraud incidents, according to the Mortgage Asset Research Institute. California ranked second, followed by a three-way tie for third among Illinois, Maryland and Michigan.

The most common mortgage fraud cases include misrepresenting income, employment history, and debt and assets. Maryland had 69 percent of its cases, an unusually high percentage that involved tax return and financial statement misrepresentation. Mortgage fraud has represented about $1 billion in losses over the past decade. The increase in reported incidents comes as lenders raise credit standards to curb rising foreclosures. In the past, the industry was too careless in qualifying risky borrowers during the real estate boom. Tightening credit standards by itself doesn't eliminate fraud," said Merle Sharick, national manager of business development for the mortgage institute. The mortgage business which was fueled by low interest rates and soaring home values attracted shady operators, resulting in billions of dollars in losses.
Today, the damage from the global mortgage meltdown has more than matched that of the savings-and-loan bailouts of the 1980s and early 1990s. Banks and brokerages have written down more than $300 billion of mortgage-backed securities and other risky investments in the past year due to a gross failure of regulation.

The FBI had about 1,000 agents deployed on banking fraud during the S&L fiasco of the 1980s and '90s, however in 2007; the number of agents pursuing mortgage fraud sank to around 100. The FBI says it now has about 200 agents working on mortgage fraud. Over the past three years, the FBI and other agencies have brought dozens of mortgage-fraud cases, but many have been relatively small, the size of two or three loans. The FBI says it has 21 open investigations into possible large-scale fraud related to the sub-prime meltdown. The FBI also is more actively working with other federal investigative agencies such as The Secret Service which has assigned more than 100 agents to examine mortgage fraud.

A Trojan horse virus called "Trojan.Silentbanker" is a program that performs "man-in-the-middle" attacks between users and more than 400 banks. Running on the user's computer, the Trojan monitors the use of Web sites, looking for banks it can manipulate. It reads data coming from the bank and instructions sent by the user, and modifies fields in user instructions such as the account destination of transfers.

The "Trojan.Silentbanker" virus can even attack sites that require two-factor authentication (generally in the form of one-time password tokens). Really, this isn't surprising or even all that impressive. Once a Trojan is in the position to intercept and modify form fields, it follows that it could do so with the one-time password, which is just another form field. This level of compromise requires a malware infection on your PC. Conventional phishing sites, which do not incorporate malware, can attempt to fool you, but they attack only one bank at a time. This particular Trojan has weaknesses, such as looking at specific addresses for updates that will help to limit it. Your best defense is to keep antivirus software up to date and not to run executables you get from strangers.

Medical identity theft is an increasing problem as between 300,000 and 500,000 people have their medical identities stolen each year. "This is the fastest-growing form of identity theft in America today," said James Quiggle, director of communications for the Coalition Against Insurance Fraud in Washington.

Most of the people responsible for are people working in the health-care sector including billing or housecleaning staff or clerical workers at large hospitals who have access to confidential patient information such as Social Security and health insurance policy numbers. Some health-care workers use the information themselves or give it to friends or associates to use fraudulently or they might sell the information to criminals, reportedly for $5 to $50 a name. Increasingly, large-scale criminal gangs are targeting medical identity theft as a profit making opportunity. Gangs employ crooked providers to bill insurers fraudulently for services never actually delivered, collecting millions of dollars in revenue. Less frequently, individuals steal someone's medical identity to get otherwise unaffordable care.

There are almost 50 million people considered uninsured today, so medical identity theft may become a growing problem as more people become desperate enough to turn to crime to find treatments that they can’t otherwise get or afford.
In many cases the crimes are not discovered until a collection agency begins calling. Often, the thief will arrange to have the insurers' billing documents sent to a false address, said Jay Foley, executive director of the Identity Theft Resource Center. It's common for thieves to create fraudulent driver's licenses and insurance cards, which are all most medical centers, ask for before they provide care. It is very easy to go on the Internet and come up with a sample of your health insurance card and then Photoshop the information you want on it?

Even if the victim does not end up paying the bill, he will have to deal with false information in his medical and health insurance records. Having someone else's information mixed in your medical record could compromise your own care. What if the test results or physical findings are those of someone else, but doctors use them when you have a medical emergency? Medical identity theft is just really beginning to create an awareness to health-care providers.

       IDENTITY THEFT DECLINES 11.2% TO $45.3 BILLION IN 2007

The study was based on phone interviews last fall with 5,075 people, including 445 who said they were fraud victims and was sponsored by Wells Fargo & Co, credit card network Visa Inc, and CheckFree, a maker of bill-paying software owned by Fiserv Inc.

Identity theft is often a crime of opportunity. To reduce your chances of becoming a victim of identity theft, we recommend the following:

1. Check financial statements promptly. Always review your monthly banking, brokerage, and credit-card statements for accuracy. Report problems immediately.
2. Watch your credit. DO NOT purchase credit reports as you can receive them free (once from each the three credit bureaus annually) by logging in at www.annualcreditreport.com. It is the only official site to provide free reports and it is safe to type in your Social Security number to the site. I recommend that you order your free copy every 4 months alternating the three credit bureaus. Examined your credit reports for errors and report errors promptly and in writing.
3. Opt Out. I strongly recommend that you Opt out of pre-approved credit card offers by calling the Credit Reporting Industry Pre-Screening Opt-Out Number at 888-567-8688 or on the web at OptOutPrescreen.com. Consider "opting out" of information sharing at your financial institutions. (Check your company's financial privacy notice, which is mailed annually and usually posted on company Web sites, to find out how.)
4. Safeguard your Information. Never disclose your Social Security number, birth date, or mother's maiden name unless you initiated the transaction. On paper documents, don't include such data unless required to do so on an official application for employment, financing, or insurance. (Ask employers and financial institutions to offer alternatives.) Never put such information on personal Web pages or publicly posted résumés or directories. Safeguard driver's license, passport and other government ID at all times. Lock desks, cabinets, and safes containing such information in your office and home. Don't carry ID that contains sensitive data like your Social Security number unless absolutely necessary.
5. Shred and destroy. Before throwing out files containing Social Security numbers, account numbers, and birth dates, shred them with a cross-cut shredder. Destroy CDs or floppy disks containing sensitive data by shredding, cutting, or breaking them. Use hard-drive shredding software or remove and destroy your hard drive before discarding a computer. Just deleting files isn't enough.
6. Guard mail. Consider using a locked mailbox or slot to receive mail at home. Deposit mail in postal mailboxes or in the post office to discourage mail theft.
7. Cordless Phones. Don't use cordless phones to conduct sensitive financial or medical business, because eavesdroppers on other phones and those using eavesdropping equipment may be able to overhear your conversations.
8. Verify Web sites. Check privacy and security policies of Web sites before making purchases, trading stocks, or banking online. A professional-looking Web site is no guarantee of security. Don't respond to unsolicited e-mail requests for personal information. Log off your browser after using public Internet-access computers in libraries, Internet cafes, etc. Don't pay bills, bank, or conduct other financial transactions on public computers. If you have a high-speed Internet connection at home, unplug the computer's cable or phone line when you are not using it to discourage hackers.
9. Utilize Fire Walls and Virus Protection. Install firewalls and virus-detection software on your home computers and set them up to automatically update the software to discourage hackers. Use hard-drive shredding software or remove and destroy hard drives before discarding a personal computer.
10. Protect your password. Consider password-protecting all your bank and brokerage accounts. Create passwords at least eight characters long. When prompted for a password, give an incorrect one first. A phishing site will accept it; a legitimate one won't.
11. Emails. Never directly respond to e-mail asking for personal information. If you doubt a message's authenticity, verify it by contacting the institution itself. Forward the fraudulent spam to the Federal Trade Commission at spam@uce.gov and the Anti-Phishing Working Group at reportphishing@antiphishing.org.
12. Avoid spoofed sites. By entering Web addresses directly into the browser yourself or by using bookmarks you create. A secure Web site gives you more assurance. To see whether a site is secure, look at the bottom of your browser's window for an icon of an unbroken key or a lock that's closed, golden, or glowing. Double-click on the lock to display the site's certificate, and make sure it matches the company you think you're connected to.

If you become a victim,

1. Report the crime immediately. Filing a report with your local police and keeping a copy yourself will make it easier to prove your case to creditors and merchants and may help you build a lawsuit if you have to sue to recover losses or clear your name later. In some states, you may have to report the incident in the jurisdiction where the fraud occurred, such as the location of the store where the thief charged merchandise to your account, even if that is not where you live.
2. File a complaint. The Federal Trade Commission investigates interstate and Internet fraud. Download a copy of an ID theft affidavit from the FTC's Web site to help you notify merchants, financial institutions and credit bureaus.
3. Contact credit-reporting agencies. Use the FTC ID-theft affidavit mentioned above to help you do this. Call TransUnion, 800-680-7289; Experian, 888-397-3742; and Equifax, 800-525-6285, to get addresses and instructions. Ask to have your account flagged with a fraud alert, which asks merchants not to grant new credit without your explicit approval. Keep copies of all your correspondence.
4. Notify banks, creditors, and utilities. Close accounts that have been used by thieves. Choose new passwords and PINs for all your accounts and don't use your mother's maiden name as a password. Notify merchants that issued credit or accepted bad checks in your name; use your police report or FTC affidavit as backup.

Identity theft, the fraudulent use of your name and identifying data by someone else to obtain credit, merchandise, or services claimed seven million victims in the U.S. last year, according to a recent survey by Privacy & American Business, a publication of the Center for Social & Legal Research, a nonpartisan think tank. Victims typically lose $800 and spend two years clearing their name. It is an equal-opportunity crime, affecting victims of all races, incomes, and ages. Overall, more than 33 million Americans, about 1 in 6 adults, say they have had their identities used by someone else sometime since 1990, and the Department of Justice says ID theft is the nation’s fastest-growing financial crime. Many victims don’t learn of the crime for several months because thieves often shield their actions by using a different address when they open new accounts in the victim’s name. Financial institutions and other businesses should use encryption and better systems to prevent and detect computer hackers and to control access by insiders, computer security and privacy experts say.

Identity fraud has become a major element in crimes ranging from international drug trafficking to terrorism; Al Qaeda operatives in Spain used stolen credit and telephone cards and false passports and travel documents to open bank accounts and pay for travel and communication abroad, an FBI agent testified before a congressional subcommittee last year. Identity theft is a problem largely because financial institutions, merchants, credit bureaus, and the government do not adequately safeguard vast databases and other records containing consumers’ sensitive information, making it relatively easy for thieves, often insiders to access these data. ID theft usually occurs not because of the carelessness of the individual consumer, but because of the carelessness or vulnerability of the organizations they deal with, including the government. All that ID thieves really need to open credit or bank accounts under your name or to drain your existing accounts are three pieces of information: your full name, Social Security number, and date of birth.

Every day, some 27,000 Americans have their identities stolen. In about a third of those cases, crooks use the information to open new accounts in their victim’s name. Thirty-six states and the District of Columbia have a new tool promoted by Consumers Union and other consumer groups to stymie thieves: security-freeze laws that allow consumers to protect their credit record from predators. A freeze essentially locks up the information needed to conduct a credit check, and creditors won’t open new accounts without that check. An imposter will be foiled, but you can lift the freeze using a PIN if you want to open new accounts. A security freeze provides much stronger protection than the fraud alert that is currently available under federal law. An alert placed on a credit file amounts to a caution flag that is supposed to trigger added scrutiny by creditors. Twenty-eight of the states that have security-freeze laws make this safeguard available to everyone, whether or not he or she has been a victim of ID theft. Most states that offer a security freeze make it free to identity-theft victims and some provide it at no charge to seniors. For those consumers who want the freeze but aren’t victims of ID theft, most state security-freeze laws allow each of the three major credit bureaus to charge $5 to $10 to initiate the protection or to lift the freeze.

Credit bureaus have a financial incentive to make it easy for potential creditors to check credit reports and make a lot of money from selling to consumers more expensive credit-monitoring services, which are unnecessary, especially when a security freeze is in place. Most states allow consumers to request this protection by e-mail or by phone, and require credit bureaus to lift the freeze within 15 minutes of a request.

Data leaks of all types have become so common that a 2008 study of breach victims by the Ponemon Institute found that 55 percent of victims had been notified of two or more breeches in the previous 24 months. You should consider taking these measures to guard against identity theft:

Visa and MasterCard now require merchants and big banks that issue their branded cards to use secure Internet technology. They’re using new identity verification and authentication systems for controlling transactions among customers, merchants, and banks. In addition, both now require member banks and merchants to encrypt personal data stored on their servers.

The IC3 (Internet Crime Complaint Center), a partnership between the FBI and the NW3C (National White Collar Crime Center) issued a report for the year 2006. It's brimming with interesting statistics, including the Top 10 IC3 Complaint Categories:

The cost of your stolen identity on the black market.

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Too many people have access to the documents. Few managers should have access, and records should be kept under lock and key. Companies that are frequent targets for identity fraud, including cell-phone services, retailers that offer instant credit, and large banks, are investing heavily in systems designed to detect fraudulent credit applications. ID Analytics has designed one that assigns a score like a credit score to a credit application. A high score means the identity of the applicant is probably stolen or fake. The software has detected fraud in 7.5 percent of credit applications. Under another system, a Social Security number that doesn’t correspond to the birth year of the applicant might trigger a warning. But too many merchants still don’t check. Systems that monitor an organization’s connections to the Internet and that prevent and detect hacking are a must to deter ID thieves and virus attacks.

To address this growing problem of Identity Theft, Senators Patrick Leahy (D-VT) and Arlen Specter (R-PA) recently introduced a bill, the Identity Theft Enforcement and Restitution Act, that gives victims the chance to seek restitution of costs incurred if anyone is convicted. The bill also expands the power of law enforcement agencies to deal with cases of identity theft.

While it increases identity-theft penalties, the crime is so easy, and the risk of getting caught is so low, that this is only part of the solution. The real solution to identity theft is to impose duties on companies and government agencies to protect information. But data protection is only half the equation; consumers must be educated to avoid falling for phishing scams. One issue is that because of a shortage of resources in law enforcement, only about 10 percent of identity-theft cases are investigated. Unless you are a victim of some major cybercrime, you really are not going to be able to tap into this restitution.

California leads other states and the federal government with its identity-theft laws. Consumers Union’s West Coast Regional Office helped push for many of them. Many consumer-rights, privacy-rights, and law-enforcement advocates say they want to see other states copy the laws, which do the following:

• Require that consumers be notified of security breaches that could compromise their personal data, including Social Security numbers.

• Entitle fraud victims to a free credit report every month for a year after they notify credit-reporting agencies that they have been victims of fraud.

• Require individuals requesting birth or death records to provide proof of identity and to sign a form indicating the reason for the request.

• Allow customers to freeze their credit reports if they have been victims of fraud. This requires credit-reporting agencies to get permission from consumers before disseminating their credit reports to lenders. Also, state law requires credit issuers to honor fraud alerts on files and to deny new credit requests until the consumer is notified.

Texas enacted a similar credit-freeze law, which Consumers Union supported. Proponents say such laws go a long way toward preventing identity theft and helping victims to limit the damage. In addition, more than 20 bills concerning identity theft are pending in Congress.

• Require law-enforcement officials to take reports of identity theft in the jurisdiction where the victim resides.

• Limit the use of Social Security numbers.

State Security Freeze Laws

Identity theft is one of the fastest growing financial crimes. Nearly 10 million Americans fall victim each year. The Identity Theft Resource Center reported in 2005, on average, an ID theft victim of new account and other fraud spent 60 hours resolving problems brought on by ID theft, those victims of existing accounts spent an average of 15 hours resolving problems. A Federal Trade Commission study found that identity theft also costs U.S. businesses nearly $48 billion annually, and consumers an additional $5 billion per year.

A security freeze lets consumers stop thieves from getting credit in their names. A security freeze locks, or freezes, access to the consumer credit report and credit score. Without this information, a business will not issue new credit to a thief. When the consumer wants to get new credit, he or she uses a PIN to unlock access to the credit file. These states give consumers this important weapon to prevent identity theft:

Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Indiana, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, New York, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, Wyoming

Arkansas
Applies to identity theft victims with a valid investigative report, an incident report, or a complaint with a law enforcement agency.
Fee of $10 to place, temporary lift or remove.
Effective as of January 1, 2008
For more information on statute (House Bill 2215): http://www.arkleg.state.ar.us/ftproot/bills/2007/public/HB2215.pdf
For instructions on how to place a security freeze in Arkansas, see: www.consumersunion.org/pdf/security/securityAR.pdf

California
Applies to all consumers
Effective as of Jan. 1, 2003, subsequently amended to cap fees on non-ID theft victims
No fee for victims to place the freeze, others pay up to $10 per freeze
Caps fee to lift freeze at $10 for temporary lifting for a time, $12 for temporary
lift for one creditor California Civil Code sections 1785.11.2-1785.11.6. see:
http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=14008017861+0+0+0&WAISaction=retrieve
How to place your security freeze in California and a link to the
text of the California statute, see: http://www.privacyprotection.ca.gov/sheets/cis10securityfreeze.htm

Colorado
Applies to all consumers
Fees: No fee for first freeze; $10 to place a second freeze, $10 to lift, $12 for temporarily l