Financial Crimes on the Rise
By: Frank W. Abagnale | Click to read full article
The fastest growing financial crimes in America today are check fraud and identity theft. The Nilson report estimates check fraud losses to be about $20 billion a year. The American Bankers Association has stated check fraud is growing 25 percent per year. Check fraud gangs are hardworking and creative. They constantly try new techniques to beat the banking system and steal money. Historically, the banks have been liable for these losses. However, recent changes in the Uniform Commercial Code now share the loss with the depositor.
There are endless opportunities for a criminal to obtain the necessary information to commit identity theft. Let me illustrate one, beginning with your visit to a doctor. As a new patient, the receptionist asks you to complete a form that asks your name, address, phone number, and your employer’s name, address and phone and your health history. They copy your insurance card, which includes your Social Security number. Your co-pay is paid with a check drawn on your bank account. You have just provided enough information for someone to become you.
For the identity theft victim, the nightmare has just begun. On average, it costs a victim $1,173 and 175 man-hours to get their credit report straightened out. Fixing the problem is not as simple as saying “…that wasn’t me.” You must prove that you did not apply for that loan. To fix things you must first convince the credit card or finance company. Then you must convince all three credit bureaus. In most cases, the credit bureaus refuse to delete the dispute from your credit files. Instead, they put an asterisk and say, “Customer disputes this Visa charge, claims they were a victim of identity theft.” The result is that anyone accessing your credit report, whether a potential employer or a company considering granting you credit, may question whether you were really a victim or if you were just ripping somebody off.
Another recent epidemic called “check washing” is on the rise. It is the process where checks are stolen from the mail or by other means and the ink is erased using common household products. The thieves will then rewrite the check payable to themselves, in the amount of their choosing. Fortunately, Uni-Ball has designed a prevention pen to counteract this problem, using inks that contain color pigments that absorb into the check’s paper fibers; individuals are unable to “wash” the information on the check because the ink is in effect trapped.
I offer these additional simple yet highly effective prevention methods such as, keeping your social security information close, examining all financial statements, shredding sensitive documents, checking your checks for security features, and ultimately engaging in preventive measures to protect yourself against becoming a victim. If you make it easy to steal for people to steal from you, they will.
