“It was a very patient scam,” said Steve Wernikoff, a staff attorney with the FTC who is prosecuting the case. According to him, the scammers found loopholes in the credit card processing system that allowed them to set up fake U.S. companies that then ran more than a million phony credit card transactions through legitimate credit card processing companies.

The fraudsters were able to fly under the radar for so long because they only charged consumers between $ .25 and $9 and set up over 100 fake companies to pull off these transactions. In this specific case they charged over 1.35 million credit cards a total of $9.5 million dollars – those nickles and dimes really add up! Shockingly, 94% of these charges went undetected by the credit card holder because they didn’t notice an unusual charge on their credit card statements and fraud detection agencies rarely detect anything under $10.

With more and more credit cards being accepted for smaller purchases (e.g., soda machines and parking meters) thieves have taken this opportunity to cash in on the frequency of these charges. While 6% of the charges were detected and reported, the huge number that didn’t even realize they had an unauthorized charge shows how lax we are about checking our statements. Here are some simple steps you can take to catch fraud early:

• Set up automatic account alerts to monitor your daily credit card purchases. That way, anytime money is spent on the card, you receive an email or SMS text to your phone alerting you to the charge. If you didn’t use your credit card, you immediately know it’s a fraud and you can call and shut down your card.
• A more basic step is to simply monitor your bank accounts and credit card statements closely. Rather than trusting that all charges are accurate you should make sure you know exactly when the charge was made, for what, and by whom.
• If you aren’t sure about a charge, call the bank and ask them to confirm it is a legitimate charge.
• Sign up for an identity monitoring service that can help with this. Although these victims only lost a few dollars here and there those small charges can add up – to the scammers it added up to $9.5 million!

Read more about how this scam was able to become so profitable to the thieves.

John Sileo became America’s leading Identity Theft Speaker & Expert after he lost his business and more than $300,000 to identity theft and data breach. His clients include the Department of Defense, Pfizer, the FTC and the FDIC.  To learn more about having him speak at your next meeting or conference, contact him by email or on 800.258.8076.

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3. Detection-Fraud: 15 Signs You’re a Victim of Identity Theft!

Identity theft of medical records has more than doubled since 2008, as stated in Javelin’s 2010 Identity Fraud Survey Report. It’s not difficult to imagine the misery that a million Americans have suffered during the past two years when their identities were stolen. And the Poneman Institute, in their National Study on Medical Identity Theft, states that another half million people loaned their insurance cards to uninsured family members and friends. The unsavvy lenders have incurred huge medical bills in this “friendly fraud”.

Larry Ponemon says that, on average, it costs $20,000 to resolve a medical identity theft case. Unlike credit card companies,where the banks incur the losses, the victims often have to pay for the fraudulent care and sometimes lose their health insurance or have to pay higher premiums to restore their accounts. Even though there are HIPAA laws to protect your privacy, not all health care organizations have strict safeguards in place.

The risk goes even further: if someone is treated using your identity, your medical records will more than likely be altered and could compromise your treatment and ability to get service.  According to Larry Ponemon, “stolen medical records offer a complete dossier to get a passport in a victim’s name that could be used for terrorism.”

Ways to Protect Yourself:

• When you receive an Explanation of Benefits from insurers, read it carefully and save – don’t throw it away even when it says “this is not a bill”! If a treatment date or doctor’s name is not familiar to you, call the insurer and the billing physician to resolve.
• If your wallet is stolen, contact your insurance company just as you would your credit card company. Don’t carry your Medicare card in your wallet. Carry a photocopy and black out the last four digits of the SS#.
• Urge your health care providers to ask patients for photo ID’s.
• Ask your doctors for copies of everything in your medical files, even if you have to pay for them.
• Monitor your credit report at www.AnnualCreditReport.com. If you see medical billing errors, contact your insurer and the three credit bureaus, TransUnion, Experian, and Equifax.
• Avoid Internet and storefront offers of free treatment and supplies.
• Ask for a list of benefits paid in your name and an “accounting of disclosures” which shows who got your records.

John Sileo became one of America’s leading Information Control Speakers & sought after Identity Theft Experts after he lost his business and more than $300,000 to identity theft and data breach. His clients include the Department of Defense, Pfizer and the FDIC. To learn more about having him speak at your next meeting or conference, contact him by email or on 800.258.8076.

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Social engineering stories: The sequel

Two more social engineering scenarios demonstrate how hackers still use basic techniques to gain unauthorized access, and what you can do to stop them

By Joan Goodchild, Senior Editor
May 27, 2010 —

John Sileo, an identity theft expert who trains on repelling social engineering, knows from first-hand experience what it’s like to be a victim. Sileo has had his identity stolen—twice. And both instances resulted in catastrophic consequences.

The first crime took place when Sileo’s information was obtained from someone who had gained access to it out of the trash (yes, dumpster diving still works). She bought a house using his financial information and eventually declared bankruptcy.

“That was mild,” said Sileo, who then got hit again when his business partner used his information to embezzle money from clients. Sileo spent several years, and was bankrupt, fighting criminal charges.

Now that he has come out of it all innocent, he spends his time assisting organizations train employees on what social engineering and identity theft techniques look like.

ow that he has come out of it all innocent, he spends his time assisting organizations train employees on what social engineering and identity theft techniques look like.

“I’m trying to inspire employees to care about privacy,” he said. “If they don’t care about it at a human level, they are not going to care about the company’s privacy policy or IT security. You’ve got to get it at a primal personal level.”

Sileo ran through some memorable social engineering scenarios he’s heard during his years as a security lecturer. The first is taken from his upcoming book

Continue Reading Social engineering stories: The sequel

If you are serious about training your staff on social engineering scams, fraud detection and protecting your business from a costly data breach, start with the items above and then bring a professional social engineering expert to your next meeting or conference. Email us for more information or contact one of us directly on 800.258.8076.

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One of the first things American public speaker John Sileo did on his return to Dunedin this month was buy a paper shredder.

Not that he is paranoid, he says, but this self-proclaimed expert on identity fraud does not take chances with personal information.

Click Here to read the entire article.

John Sileo became America’s leading Identity Theft Speaker & Expert after he lost his business and more than $300,000 to identity theft and data breach. His clients include the Department of Defense, Pfizer and the FDIC. To learn more about having him speak at your next meeting or conference, contact him by email or on 800.258.8076

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“Consumers are spending considerably more time on fraud Resolution, up to an average of 30 hours in 2008. This increase may be attributed to the increased sophistication of fraud schemes.”
-    2009 Identity Fraud Survey Report, Javelin Strategy & Research

Most cases of identity theft are discovered by the victim, which reinforces the importance of monitoring your various accounts for suspicious behavior. Here are a few of the most common warning signs for the detection of fraud, identity theft or data breach:

The Top 15 Ways Victims Detect Identity Theft

1. You receive a data breach notice in the mail from a company you do business with.
2. Your bills or statements are not arriving in your mail (or email) on time.
3. You notice unauthorized charges on your credit card bill or debit card statement.
4. You notice new accounts or erroneous information on your credit report.
5. You are denied credit for a purchase.
6. You receive credit card bills for cards you don’t own.
7. You are contacted by a collection agency about an item you didn’t purchase.
8. You receive bills for unknown purchases, rental agreements or services.
9. Businesses won’t accept your check or credit card.
10. You are unable to set up new banking, loan or brokerage accounts.
11. You notice withdrawals on your checking, savings or brokerage account that you didn’t make.
12. The checks listed on your bank statements don’t reconcile with those listed in your check register. Many times these checks are made out to “Cash.”
13. You notice a downward trend in benefits on your Annual Social Security Statement.
14. The police show up at your door.
15. A subpoena to appear in court arrives in the mail.

According to Javelin Strategy & Research, over the past 3 years, stolen data being used in less than one week jumped from 33% to 71%.  Identity thieves count on our lackadaisical attitude toward monitoring our wealth. Remember, actively monitoring your accounts, credit reports, and other identity documents is the best strategy to catch identity theft in its earliest stages, before it becomes a problem.

John Sileo became America’s leading Identity Theft Speaker & Expert after he lost his business and more than $300,000 to identity theft and data breach. His clients include the Department of Defense, Pfizer and the FDIC. To learn more about having him speak at your next meeting or conference, contact him by email or on 800.258.8076.

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Lock Box. Install a locking mailbox that can be accessed only by you. These generally have a mail slot that allows the postal service to put mail into the box. Many newer neighborhoods already have some form of locking mailboxes.
P.O. Box. If a locking mailbox is not possible, get a P.O. box at your local post office and have sensitive documents sent there. It is a little bit more work, but gives you much more privacy.
In Person. When mailing sensitive documents, walk them into the post office and hand them to a postal worker. If it is after hours, drop the mail through an internal slot in the building. If there is no internal mailing slot, mail it the following day. This cuts out the most vulnerable stages of mailing.
UPS/FedEx. Have identity documents sent by UPS or FedEx and make sure that you require a signature for delivery. This makes the information harder to steal and you can track its location at anytime, which will alert you if the document isn’t delivered in a timely manner or is diverted somewhere else.
Send Checks to the Bank. Have sensitive documents (like new checks or credit cards) sent to your bank rather than to your home address. Pick them up there.
Watch for Cards. When new credit cards are coming through the mail, watch for them and call the credit card company if they don’t arrive in 7 to 10 days.
Quick Retrieval. If you are unable to install a locking mailbox and don’t have access to P.O. boxes, retrieve any mail within an hour or two of delivery. This lowers the exposure time of your mail.

According to the Identity Fraud Survey Report by Javelin Strategy & Research, 8% of all known identity theft is committed by mail fraud and the misuse can last for up to 175 days. But mail fraud is very difficult to catch, which means that the numbers are probably significantly higher. Just by protecting your mail against Identity Theft you can reduce your chances of becoming a victim by at least 8%.

John Sileo became America’s leading Identity Theft Speaker & Expert after he lost his business and more than $300,000 to identity theft and data breach. His clients include the Department of Defense, Pfizer and the FDIC.  To learn more about having him speak at your next meeting or conference, contact him by email or on 800.258.8076.

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Yesterday, a good friend emailed me a two sentence note reminding me that I hadn’t done something that I’d promised I would do. What I had promised is immaterial to this post, but that I had promised to do it, and then failed, is very important. I gave my word to a good friend, and then ignored my promise. And he had the guts to remind me. In fact, he’s laughing at me right now that I even consider his reminder to be a big deal, because to him it would be phony not to remind me. That’s who he is. And he’s a better friend for it. And in no way could what he did be called confrontational. Direct, yes. Honest, yes.

Here’s the striking part that makes me uncomfortable — I only have THREE friends (in addition to my wife, who is my honesty compass) who have the backbone to call me on something like this. And that makes me sad, because I have many friends, and it means that most of the time I’m probably not hearing the whole truth, maybe just a watered down version of what they think I want to hear. And who knows, maybe that is what I want to hear. Worse yet, I’m not sure I would have confronted me like my friend did (even though it was something minor), which means that I’m no better that those I’m condemning as soft.

But I’m condemning you (us) anyway. I spend my entire workday in the world of fraud; how people are conning each other out of money, mostly. I am surrounded by stories of the wickedly, cleverly dishonest. And I have to say, by shutting up and putting up with them, we enable them. Let me share an example.

As you’ll see from previous posts, I’m constantly being asked for my opinion on the negative impact of social networking (Facebook, Twitter, YouTube, etc.) in the workplace, especially by the CEOs of companies. When people ask me about this, they are usually asking because they want an answer from a privacy perspective: how information is leaking out of their company through social media. Which it is, and I share that with them. But they ask with such urgency – like they are trying to find a reason to crack down on its use.

But the more honest answer that I rarely mention, an answer they themselves sense and are unwilling to confront, at least person to person, is that the real damage of social networking on the workplace comes from the fact that we are spending our work day in personal conversations (enabled by social media) that seriously and negatively impact our productivity. We say that we tweet for business reasons, but a lion’s share of our surfing is personal. How often are we reminded that we’re not getting paid to get back in touch with high-school buddies. Now, I might write it in an article, but to actually say it to someone’s face (the offender) is an entirely different gravity of backbone.

Do we fear offending people, or not being liked? Are we afraid we might get fired, or lose a friendship? I don’t think so.

I think we have unknowingly created a culture that punishes people for honesty:

• We become social outcasts because we let a neighbor know that their kid was mis-behaving in our home (which he was) and we don’t ask them to stop negatively spinning the story to the rest of our neighbors. And we defend our kid, even when we know that they were mis-behaving.
• We don’t listen to the news unless it is slathered and tainted with our own self-centered political perspective (do you really think you are getting the most honest version of the story from Glenn Beck or Keith Olbermann?). We don’t want the actual news, we want yummy confirmation about our vision of how the world should be. In the media, honesty is just too boring. If you don’t have an outrageously provocative opinion (by definition, dishonest), it just won’t sell. How many of us watch The Lehrer Report on PBS? How many of us just dismissed that reference to impartiality based on our political views?
• We ask for 360 Feedback at work and once it is given, go home and complain about how “off” our boss was. But we never tell our boss, we never have the conversation.

The net result of Fearing Honesty is that we become dishonest with ourselves. We drink the Cool-aid, so to speak. We know that no investment returns 15% year, even in bad years, but we continue to give our money to the Bernie Madoffs of the world, hoping. We tell our spouses that the relationship is strong because we can’t bare to tell them the truth. Instead of being direct, we step out on them. We know we need to change, but not as much as the next guy.

Even if you’ve made it this far in the article, you probably won’t see the world differently when you look up from the screen. I’m wondering if I will. If so, it will be thanks to my friend.

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