Fighting Fraud

Your credit union would like to arm you against financial fraud and financial scams.  The information pieces below can help aid you in fighting fraud.

• A Word About Scams
• Identity Theft
• Online Shopping
• Phishing

A Word About Scams

There have been attempts to victimize some of our members by some type of financial scam.  Unfortunately, these scams and the people behind them seem legitimate to an unsuspecting person.  When you are dealing with financial matters, especially with people you do not know, please be careful and use caution.  Here are some very basic financial scams:

• Lottery Scam – This occurs when a solicitor claims that you have won a lottery and states that you will receive your winning amount after simply paying the processing fee.  You pay, but never receive the winning amount. 
  
  To avoid this scam: If you didn’t purchase a ticket, you didn’t win.  Do not be pressured into sending money (usually via a wire) with the threat of losing your winnings.

• Advance Fee Scam - This happens when an honest member sells an item over the Internet.  The buyer sends payment (usually via a cashier’s check) for the more than the sale amount and asks the seller to refund the overpayment, usually via a wire transaction.  The seller gets to keep a portion of the refund as payment for their time.  The scam is that the cashier’s check is counterfeit and returned in a few days – usually after the non-returnable wire transaction refund has already been sent. 
  
  To avoid this scam: Wait until all funds clear on deposits before finalizing any transactions.  It is also always best to know whom you are doing business with.

• Nigerian Advanced Fee Scam – If you receive a fax, email, or letter claiming to be from a foreign country in which the contact requests your assistance in transferring funds – this is a scam.  You will be lured with the promise to receive a percentage of the transferred funds or related fee.  After you have paid the necessary expenses for the transfer, you will find that the money does not exist and the individuals are gone.
  
  To avoid this scam: Never give personal information, such as your banking information, to someone unknown.  And beware of false urgency or sympathy pleas.

• Phishing Scam – A growing scam in the financial world is called “phishing”.  This is where unscrupulous people lure individuals into fake web sites to obtain personal information to commit identity theft.  These criminals create and use e-mails and web sites – designed to look like e-mails and web sites of well-known legitimate financial institutions – to deceive users into disclosing account information and other personal data.
  
  To avoid this scam: Be extremely wary of sharing any personal data through a web site – especially data that is being solicited (where you have been asked for it).  A legitimate business, such as your credit union, will never ask for account numbers, passwords, or other such data through e-mail.  Another good rule of thumb to follow is if you can’t verify either the business or why they need the information – then don’t give any information.

There are many more scams out there.  But always keep in mind the old adage: “If it seems to good to be true, it probably is.” 

Identity Theft

How It Happens:
Identity theft can occur in a number of different ways. If you know what to look for and how it happens, you can self-detect identity theft before it happens, minimizing losses. Here are some common scenarios to watch out for:

Using everyday items such as your driver’s license or Social Security number to assume your identity, a skilled thief can:

• Open new bank accounts, and write bad checks.
• Establish new credit card accounts and not pay the bills.
• Obtain personal or car loans.
• Get cash advances.
• Set up cellular phones or utility services and run up bills.
• Change your credit card mailing address and charge on your existing accounts.
• Obtain employment.
• Rent an apartment, but avoid the payments, and get evicted.

How identity thieves do it:
Lost Or Stolen Wallet Or Checkbook - The most commonly reported source of information used to commit fraud is a lost or stolen wallet or checkbook. Stolen wallets and checkbooks usually contain a number of credit and debit cards, in addition to other personal documentation.  Using these items, a thief can get enough information to obtain credit under the victim’s name, or sell the information to an organized crime ring.

Dumpster Diving - Thieves rummage through trash cans for pieces of non-shredded personal information that they can use or sell.

Mail Theft - Crooks search mailboxes for pre-approved credit offers, bank statements, tax forms, or convenience checks. They also look for credit card payment envelopes that have been left for postal carrier pick-up.

Inside Sources - Half of all identity fraud is committed by friends, family members, relatives, employees, and live-in caregivers with access to privileged information. Info such as personnel records, payroll information, insurance files, account numbers, or sales records can be great help to any identity thief.

Imposters - Many have fallen victim to identity theft by individuals who fraudulently posed as someone who had a legitimate or legal reason to access the victim’s personal information (e.g., a landlord or employer asking for background information).

Documents In The Home - Unfortunately, identity thieves can gain legitimate access into someone’s home and personal information through household work, babysitting, healthcare, friends, or roommates.  Although most identity thefts occur through traditional methods, such as the ones outlined above, risks still exist online. Be cautious when sending information electronically over the Web. Account information sent through email, or online chat, can easily be intercepted by thieves.

Online Shopping

Online Shopping Protection
Shopping online can be fun and rewarding, but there are a few basic things you should know before you begin. Follow these tips to shop smart and stay safe.

Shop At Trusted Online Retailers - You wouldn't shop at a brick-and-mortar store you didn't trust, so make sure you're as vigilant about your online retail choices. Buy from trusted sources, and if you're not sure do your research. Perform a background check, request a catalog by mail, or talk to a customer service representative for more information. You can also look for third-party seals of approval to get additional peace of mind.

Read Return And Shipping Information - When calculating the final cost of a purchase, don’t forget shipping and handling charges. If you’re doing business with a merchant located in another state or country, taxes and international costs may apply. Before you buy, check the merchant site for a description of charges that will apply to your purchase.

Look For Signs Of Security - Protect your private information while shopping online. Look for a padlock in the status bar at the bottom of the browser window, a URL that begins "https://", or the words "Secure Sockets Layer (SSL)." These signs indicate that only you and the merchant can view your payment information.

Keep Your Information And Records Safe - Never send payment information via email. Information that travels over the Internet (like email) is not fully protected from being read by outside parties. All reputable merchant sites use encryption technologies that will protect your private data from being read by others as you conduct an online transaction.

And just as you save store receipts after you've completed an in-store purchase, you should keep records of your Internet purchases. These records are just like the receipt you'd get in a store.

Here are some tips on keeping your data secure:

• Buy over a secure computer
• Use the latest version of your browser's software and check to be sure your computer's operating system software is up to date.
• Protect your password - Creating a strong password is key. Don’t use the obvious (such as your birthday, nickname, mother’s maiden name, phone number or the name of your pet) and use six or more characters (mix letters and numbers and use upper-case and lower-case letters) if possible. Try to create a new password for each site—and never share it with anyone.
• Be careful of one-click shopping - Although it’s convenient to have your information stored and easy to access, never use this feature on a public computer.

Review The Privacy Statement - Whether it's called Terms of Use, Terms and Conditions or a Privacy Statement, reputable online merchants should post details on their site about how they use your information. Check their policies carefully and make sure they're not selling your information to outside sources.

Also, be prudent about what information you reveal for a purchase—some things, like credit card numbers, are necessary. But if a question seems too invasive—like your social security number—skip it.

Never Provide Your Credit Card Number As Proof Of Your Age - If a merchant requests that you provide your Visa card number as proof of your age, do not give this information. A card number does not verify one’s age. When you pay online, make sure that you are using a secure browser and always look for the merchant’s privacy policy and an explanation of how you are protected. 

Phishing

“Phishing” is an email scam that attempts to trick consumers into revealing personal information, such as their credit or debit account numbers, checking account information, Social Security numbers, or banking account passwords through fake Web sites or in a reply email.

Phishing scams are among the fastest growing forms of fraud on the Internet. According to the Anti-Phishing Working Group, phishing scams grew by 52 percent from December 2003 to January 2004. Find out more about phishing below.

How to spot a phishing email
Phishing emails, and the Web sites they link to, typically use familiar logos and familiar graphics to deceive consumers into thinking the sender or Web site owner is a government agency or a company they know. Sometimes the phisher urges intended victims to “confirm” account information that has been “stolen” or “lost.” Other times the phisher entices victims to reveal personal information by telling them they have won a special prize or earned an exciting reward.

Look for these red flags in the email:

• Asks you to provide personal information such as your credit union account number, an account password, credit card number, PIN number, mother’s maiden name, or Social Security number. The Credit Union will never ask you for this information by email.
• Does not address you by your name.
• No confirmation of the company that does business with you, such as referencing a partial account number.
• Warns that your account will be shut down unless you reconfirm your financial information.
• Warns that you’ve been a victim of fraud.
• Spelling or grammatical errors