Check Fraud Credit Card Fraud Credit Fraud Identity Theft.
Post on 15-Jan-2016
245 Views
Preview:
Transcript
Types of Fraud
Check Fraud Credit Card Fraud Credit Fraud Identity Theft
Check Fraud
Definition Unlawful use of checks in order to illegally acquire or
borrow funds that do not exist within the account balance or account-holder’s legal ownership▪ Stealing an unsigned check from someone else for the purpose
of passing it as yours▪ Writing a check that doesn’t have enough funds in the checking
account to cover it, or the checking account doesn’t exist at all Statistics
500M checks are forged in US each year, for a total of over $10B
Surprised?▪ Checks are the most popular form of payment for business-to-
business transactions, estimates are 80%
Types of Check Fraud
Paper Hanging When a person writes checks on a checking account that they know is
closed Check Kiting
When a person opens 2 checking accounts, writes a check from one account to the other
Withdraws money from 2nd account before it has time to clear Check bounces from 1st account
Check Washing Intercept a check, usually in the mail Use chemicals to remove all of the writing on the check so they can
write in their own information Forgery
A person takes or steals a check from a business they work for and writes it out to themselves
A person alters a check that has been legitimately written by adding words and/or digits in order to inflate the amount
Credit Card Fraud
Unauthorized charges to your credit card
Counterfeit cards Occurs when:
Cards are lost or stolen Mail is diverted by criminals Employees of a business steal customer
information
Credit Card Fraud
The Federal Trade Commission estimates that 10 million people are victimized by credit card theft each year
Credit card companies lose close to $50 billion dollars per year because of fraud
These costs “trickle down” in higher interest rates and fees for all consumers
The bottom line...
All cardholders pay for credit card fraud losses Victims spend time and money to repair
the damage Credit card issuers charge higher fees
and interest rates to cover their losses
Corporate Breaches
Target November 27 – December 15, 2013 40 million shoppers potentially affected Point-of-sale system hacked▪ Malware in terminals where cards swiped or ▪ Customer data collected while on route from Target to
its credit card processors Thieves gained access to data on the magnetic
strips▪ Produce counterfeit versions▪ Withdraw cash from ATMs with counterfeit debit cards
Corporate Breaches
Home Depot April – September, 2014 56 million cards potentially compromised Software that was slipped into the companies’
networks▪ Used to skim payment-card data▪ Unique, custom-built malware
Customers not liable for fraudulent charges▪ $450 in Home Depot gift cards billed to my Visa via paypal
Cost Home Depot $62M in investigation, credit monitoring service, call center staffing▪ Reimbursed $27M for its insurance
Credit Fraud
Lying in any way on a written application for a loan, goods or property, or a credit card Giving a fake or stolen Social Security
number Giving a fake name and address Misrepresenting your income, financial
obligations and ability to pay
Identity Theft
Identity theft is the use of someone’s personal information, such as their Social Security number or date of birth, to commit financial fraud
Type of Fraud Percent Reported
Misuse of Existing Credit Card 64.1%
Misuse of Other Existing Bank Account 35%
Misuse of Personal Information 14.2%
Identity Theft
Fastest growing crime in America Every minute about 19 people fall victim to
identity theft It takes the average victim an estimated $500
and 30 hours to resolve each identity theft crime
Studies have shown that it’s becoming more common for the ones stealing your identity to be those closest to you 32% were family members or relatives 18% were friends, neighbors, or in-home employees
TX Penalties for Fraud
Check Fraud Forgery - is a State Jail Felony Stealing or receiving a stolen check - is
a Class A Misdemeanor Credit Card Fraud
State Jail Felony▪ Punishable by fines and up to 2 years in a
state jail
TX Penalties for Fraud
Identity Theft
Additionally, if you are convicted of identity theft, the judge can order you to pay restitution to the victims▪ Any lost income or other expenses incurred while trying to resolve problems caused by the theft
Number of Identification Items
Classification Penalty
Less than 5 State Jail Felony180 days to 2 years in a state jail and/or a fine of not more than $10,000
5 or more, but less than 10
Third-degree Felony
2 to 10 years in a state prison and/or a fine of not more than $10,000
10 or more, but less than 50
Second-degree Felony
2 to 20 years in a state prison and/or a fine of not more than $10,000
50 or more First-degree Felony5 to 99 years in a state prison and/or a fine of not more than $10,000
How It’s Done
Dumpster Diving Stealing credit card information from
discarded receipts or account statements in people’s trash▪ Shred unwanted documents that contain
Social Security numbers, bank and credit card information and other sensitive financial information
How It’s Done
Skimming When dishonest employees make illegal
copies of credit or debit cards using a “skimmer” device that captures credit card numbers and other account information
The stolen credit informationis used to make purchases byphone and internet, or to make counterfeit cards
How It’s Done
Phishing A financial crime that starts with
massive numbers of deceptive spam e-mails
These e-mails look like they come from your bank
But they are just a trick to get account numbers and passwords
Example of Phishing
How to Prevent It
Only carry essential documents with you Don’t carry extra credit cards, your Social Security card,
birth certificate or passport on you Keep new checks out of the mail
When ordering new checks, pick them up at the bank instead of having them mailed to your home
Be careful when giving out personal information over the phone Only give info if you initiate the call
Your trash is their treasure Shred your receipts, credit card bills, bank statements, etc.
Make sure others are keeping you safe Ensure that your employer, landlord or anyone else with
access to your personal date keeps your records safe
How to Prevent It
Protect your Social Security Number Do not print on your personal checks
Follow your credit card billing cycles closely Go with electronic statements If have paper copies, make sure you receive each
month Keep a list of account numbers, expiration dates
and telephone numbers filed away Good to have if your wallet is stolen
Create passwords or PIN numbers out of a random mix of letters and numbers Do not use your birthday or other familiar numbers Makes it harder to break
Security Codes
Credit card companies use security codes to help prevent unauthorized or fraudulent use by phone and online These numbers help ensure that you
have the card — not just the account number
Merchants are prohibited from keeping or storing any security codes after transactions are completed
Security Codes
Security codes for Visa, MasterCard and Discover cards are the 3 digits located on the back of the card in the signature box.
Security codes for American Express are 4 digits long, printed on the front of the card above the right side of the main credit card number.
New Cards
For added protection, credit card issuers ask you to call from home to activate new credit cards
As soon as you receive your new card, sign the back of it with a permanent black ink pen
Should you write “Ask for ID”?
Writing “Ask for ID” in the signature space may not be a good idea as your transactions might not go through if the card isn’t signed
Consider signing your card and also writing “Ask for ID”
In case your card is lost or stolen
Record all your account numbers and company contact information and keep the record in a secure place
That way you can easily find whom to call to report the loss
Protect your PIN
Never write down your personal identification number (PIN)
Never give your PIN to anyone
Protect your account numbers
Never write your credit card number on post cards or on the outside of envelopes
Never provide your card number on the phone, unless you know it’s a legitimate, reputable business
Never give your account number to anyone who calls you on the phone or sends you an e-mail
If you let others use your card, you are responsible for charges
Billing Statements
Review credit card statements closely on the day they arrive Report any questionable charges to your
card issuer immediately A missing credit card statement may
indicate stolen mail Contact your card issuer right away if
your bill doesn’t arrive around the usual date
Online account access
If you have a computer, consider signing up for online account access
This way you can track your account activity between statements
Liability
Fraud victims are not generally required to pay for unauthorized charges
Victims may be liable for up to $50 of the loss, depending on the circumstances
Protect your wallet or purse
Keep a close eye on your belongings Never carry all your credit cards Bring only the 1 or 2 cards you might
need Carry your credit cards separate
from your wallet If your wallet or purse is lost or
stolen, call your credit card issuers immediately
Watch your credit card
Watch closely when store or restaurant employees handle your card to make sure they are not copying or “Skimming” your credit card number
After you make a purchase and your card is handed back to you, make sure the card is yours.
Take Precautions
Notify your credit card company if you are going to be traveling away from home to prevent any inconvenience if your issuer should block your account from being used in a different city
Notify your credit card company if you are going to make any unusually large purchases so that your account is not flagged for possible fraud
Safeguard your Mail
Notify the post office and your credit card company immediately if you change your address
Lock your mailbox. Never leave mail in an unlocked mail box or apartment building lobby
Put your return address on out-going mail
Shred unwanted credit card solicitations before discarding
Internet Safeguards
If you bank online, don’t use “automatic sign on” for bank or credit card sites
Avoid providing your credit card number to websites offering “free access”
Install a firewall in your computer to prevent unauthorized access from hackers
Reporting creditcard fraud
To report credit card fraud Call your card company immediately
about▪ Lost or stolen cards or PIN numbers▪ Unauthorized charges on your statement
Request a fraud affidavit Get a police report if necessary
The Fair Credit Billing Act is a federal law that gives you the right to
resolve billing errors, including unauthorized charges If something goes wrong, you have the right to
dispute the charge To dispute billing errors on your statement,
contact your card issuer within 60 days from the statement date or you lose your right to file a dispute
Note: There is no time limit for reporting fraudulent charges.
Disputing charges
Always dispute billing errors in writing. You can call your card company and follow up with a letter. Describe the dispute in a few sentences Send it to the correct address for billing
disputes Do not include your dispute letter with
your bill payment
top related