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Thursday, March 11th, 2010

LifeLock Fined for Inappropriate Identity Theft Protection Claims

A company that made bold promises about its ability to protect against identity theft has settled with the Federal Trade Commission after the validity of its claims was questioned.

LifeLock is a company that protects customers' identities from theft, and alerts customers about identity theft security breaches, according to the company web site. LifeLock will even help consumers if their identity is stolen, by canceling and replacing stolen cards and verifying information changes.

According to federal regulators, however, LifeLock has made claims about its ability to protect customers from identity theft that it cannot uphold, leading to an agreement for the company to pay $12 million in settlements.

CNNMoney is reporting that the fine will settle charges that LifeLock made deceptive claims about its identity theft protection abilities. $11 million of the fine will go to the FTC, while another $1 million will go to a group of attorneys general from around the country. According to the FTC, this is one of the largest joint settlements between the FTC and the states.

According to the chairman of the FTC, Jon Liebowitz, LifeLock claimed that it could protect consumers against identity theft completely, including all types of identity theft.

The protection it actually provided, said the chairman, left enough holes that you could drive a truck through it.

LifeLock advertises its services in a brash manner, by displaying the social security number of the company's CEO, Todd Davis, on the side of a truck that drives around in public, as well as on national television commercials. This show of confidence is meant to publicize their $10 per month services that they claim will keep users safe from identity theft.

The case that the FTC made against LifeLock was that the company made "deceptive claims" about its protection services. Among these claims were that LifeLock could guarantee protection against identity theft, and that, according to CNNMoney, "it was the first company to prevent identity theft from occurring."

There are certain types of identity theft that LifeLock claimed it could protect against, and the FTC argued that these fraud alerts did not actually protect against one of the most common types of identity theft: the misuse of existing accounts.

There was also the charge that LifeLock claimed, falsely, to be able to prevent changes to customers' address listings that weren't authorized, and that it constantly monitored customer credit report activity.

The FTC also said that LifeLock made untrue statements about data security, claiming that sensitive data was only accessed on a "need-to-know" basis. According to the FTC, however, LifeLock collected social security numbers and credit card numbers on a routine basis.

Davis, the CEO of LifeLock, said of the settlement that he was pleased with it, and that it would help to establish the advertising standards for the identity theft protection industry. He went on to say that the activities in the FTC charges were from several years ago, and that LifeLock agreed to settle the case as a way to put the issues behind them.

We agreed to settle this matter, he said, in order to quickly put this behind us so we can get back to doing what we do best—helping to protect our members from identity theft.

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Posted in Financial Literacy | 4 Comments »

Sunday, March 7th, 2010

FTC: Identity Theft Top Complaint in 2009; Potential Data Breach

The Federal Trade Commission recently issued its annual report on consumer complaints filed in the last 12 months (summary available here, for the complete report, see below).

Identity theft was by far the largest complaint category, concerning 21 percent of all complaints filed. The top fifteen list looks like this:

  • Identity theft (21 percent)
  • Third party and creditor debt collection (nine percent)
  • Internet services (six percent)
  • Shop-at-home and catalog sales (six percent)
  • Foreign money offers and counterfeit check scams (five percent)
  • Internet auctions (four percent)
  • Credit cards (three percent)
  • Prizes, sweepstakes and lotteries (three percent)
  • Advance-fee loans and credit protection/repair (three percent)
  • Banks and Lenders (two percent)
  • Credit bureaus, information furnishers and report users (two percent)
  • Television and electronic media (two percent)
  • Health care (two percent)
  • Business opportunities, employment agencies and work-at-home plans (two percent)
  • Computer equipment and software (two percent)

    • The FTC reports that identity theft complaints also constituted the largest single group of consumer worries last year, but have dropped as an overall percentage of the whole. In addition to the release of 2009’s data, the FTC has posted an animated video detailing how and when to file a complaint (available here).

    A Potential Data Breach You Should Know About

    In another recent news release, the FTC noted that it has warned almost 100 companies that information they store on peer-to-peer websites (used for everything from playing video games to sharing text, audio and video files to conducting online phone calls) may be vulnerable to data breaches.

    Specifically, if peer-to-peer (P2P) software is improperly configured, any sensitive data may be accessible to anyone on the network. This presents a huge security risk, and could lead to identity theft or other costly and frustrating scams.

    What this could mean for you is that, if you have given your personal information to one of the companies in question, your information could be at risk.

    While no companies have necessarily broken the FTC’s regulations regarding storage of sensitive information, some may be at risk for significant future data breaches.

    Additional Resources

    FTC 2009 Full Report on Consumer Complaints.

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Posted in Identity Theft | 8 Comments »

Wednesday, January 13th, 2010

Is Texting ‘HAITI’ to 90999 a Scam?

Update: 1/20/2010. As aftershocks continue to do damage in Haiti, help is still desperately needed. There's still some confusion on how to donate. Here's what you can do:

  • Send a text with the word Haiti in the message. The recipient should be the five-digit number 90999. You should receive a confirmation response. Reply Yes. $10 will be added to your phone bill
  • Log on to RedCross.org to make a donation online via credit or debit card (minimum $10) or find a Red Cross location near you.

Watch out for scams that ask you to send your credit card information over text message as well as web sites that prompt you to download software.

In the wake of the traumatic 7.0 earthquake that struck Haiti Tuesday evening, an outpouring of support has been heard across cyberspace. And thanks to developments in technology, donating to important and topical causes is easier than ever. But could a text of support really find you victimized by a scam?

Right now, there are two legitimate ways to donate to Haitian support and relief organizations:

  • Text 'HAITI' to 90999: This service was set up by the U.S. State Department. Texting "HAITI" to the number will donate $10 to the International Red Cross, and will appear as a charge on your wireless bill.
  • Text 'YELE' to 501501: This will donate $5 to Yele Haiti, a non-profit organization founded by singer and Haiti native Wyclef Jean. A donation to Yele will also appear as a charge on your cell bill. You can also donate larger amounts at Yele's website.

So far, these are the only two legitimate text-to-donate services providing support to Haiti relief, according to consumer watchdog groups. But others may be popping up to take advantage of Americans' generosity.

The Better Business Bureau and the Federal Trade Commission have issued statements warning possible donors to watch out for scams, which tend to pop up after a catastrophe.

The five-to-six digit numbers known as short-codes make it difficult to tell who is on the receiving end of a text. A legitimate charity will not ask you to send your personal information or credit card number through text message.

The devastating earthquake that struck Haiti, the western hemisphere's most impoverished nation, Tuesday hit 10 miles southwest of Port-au-Prince, Haiti's capital and largest city. Haiti's prime minister has issued a statement that hundreds of thousands may have perished in the quake.

The Bankruptcy Blog reports often on consumer affairs and identity theft issues for all consumers, in addition to bankruptcy information.

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Posted in Uncategorized | 32 Comments »

Monday, August 31st, 2009

Identity Theft Crimes — Have You Been Robbed Lately?

Three men have been indicted for what seems to be the largest data breach and identity theft case ever prosecuted.

More than 130 million credit and debit card numbers were compromised by the hackers, according to Reuters.

It's probably a good idea to check your records to ensure you haven't been robbed of your hard-earned money.

Of the men indicted, one (Albert Gonzalez) was reportedly already in jail for prior hacking-related charges.

Sources indicate that the other two men who were indicted were also responsible for five serious data breaches from 2006 to 2008.

With this crime in the news, it's probably good to go over what identity theft is and how you can protect your assets.

Identity Theft: What the Criminals Do

Identity theft can be a devastating crime for its victims, leaving their credit ruined and causing them to lose serious amounts of money and, in some extreme cases, filing bankruptcy.

So how does this crime work?

  • Individual identity theft: When a thief steals the information of an individual or a single company, he or she can use it to make everyday transactions, take cash out of the bank, take out loans or get a job (particularly if the person is not a U.S. citizen). Victims of individual identity theft generally have great difficulty setting their affairs in order after they’ve been targeted.
  • Group identity theft: When hackers target an entire database of personal information, the potential for damage is much greater. In this particular case, the hackers apparently planned to sell the personal information they stole from corporate databases to other criminals.

This particular incident involved data breaches at the card processor Heartland Payment Systems and the retail chains 7-Eleven and Hannaford Brothers, Inc.

Preventing Identity Theft

Information crimes have risen with the popularity of computers and the Internet – but so have protections against them.

For example, the security code on the back of your credit cards can prevent fraudsters from using your info by creating a clay imprint copy of your credit card number (at the checkout, say).

Here are some actions you can take to keep you and your personal information safe:

  • Shred your sensitive mail. While some large-scale identity crimes occur in the digital realm, individual identity theft still results from thieves sifting through sensitive documents in the trash.
  • Guard your numbers like gold: Don’t give out your SSN or credit card numbers unless you’re sure you have to. Whenever you’re asked to give out your SSN, demand an explanation of why it’s needed.
  • Check your credit report: Regular checks of your credit report (at www.annualcreditreport.com) will reveal whether anyone has been using your information besides you. Then you can take steps to stop the criminals.

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Sunday, July 19th, 2009

FTC Cracks Down on Scammers Targeting Job Seekers

The high unemployment rate and therefore high volume of online job seekers has led to scams tailored to the conditions of the current recession.

Scammers are apparently preying on struggling and out-of-work Americans in two major ways:

  • Identity theft scams: Some scammers pose as employers and post fake job opportunities on employment websites or hack into legitimate companies to get job seekers’ sensitive information.
  • Get-rich-quick scams: Others are posting lucrative-seeming job offers, knowing that many people are desperate to recover their lost finances. After a victim makes his or her initial “investment,” the scammer keeps the money.

“Operation Short Change” to Aid Consumers

At the beginning of the month, the FTC announced that it has initiated eight new lawsuits and settled or resolved seven others against companies responsible for conning consumers out of money.

The announcement is particularly poignant because many of the scams in question involved consumers already struggling to pay bills, thanks to rough economic conditions.

As part of its consumer protection efforts, the FTC has posted this video for consumers to view.

It includes confessions from a scammer who eventually went to jail for his misdeeds and personal accounts from Americans who were victimized by costly scams.

Protecting Yourself from Scams

BusinessWeek reported that scammers have used stolen information in a variety of ways.

Some fraudsters sell stolen information to illegal immigrants who need Social Security Numbers for employment; others opt for more traditional identity theft crimes.

In one troubling case, online jobseekers’ sensitive information was apparently compromised in a data breach at a company called Aetna.

So what can you do to minimize your potential for getting scammed or becoming the victim of identity theft?

  • Guard your personal data. Treat any identifying numbers (credit card, SSN, bank account, etc.) like gold. Legitimate companies generally don’t need your identification digits unless you’ve been offered a job (which means you’ve spoken to a person!) or need high-security clearance.
  • Be skeptical of too-promising offers. If a business or investment opportunity sounds too good to be true, it’s likely a scam. The video above has some tips on how to identify and avoid costly and dangerous “opportunities.”
  • Get thee to a job fair. If you’re looking for jobs, a job fair can be a great place to make contact with actual humans. Afterwards, you’ll have a better sense of who’s receiving your application (as opposed to risking sending it to a malicious scammer).

The good news is that the FTC has taken action to protect your consumer rights.

Remember, though, that you play the biggest role in actively protecting yourself.

--If you've become a victim of identity theft and your finances have been trashed by a crook, it may be time to learn about the filing bankruptcy option.

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Sunday, July 5th, 2009

Protecting Your Money Online

Since the Internet’s explosion into our lives, we’ve been introduced to amazing new ways of interacting with each other, doing business and connecting with the world.

Unfortunately, the Internet has also introduced a variety of new crimes and consumer vulnerabilities.

The Numbers

  • A recently released Consumer Reports survey showed that 20 percent of Americans (that’s one in five!) have been victimized by online criminals in the past two years.
  • In that time, sources estimate that cyber criminals absconded with $8 billion of victims’ money.

These figures are shocking, but they don’t mean that victimhood is unavoidable.

In fact, related studies have shown some important steps you can take to protect yourself, your computer and your personal information - credit card numbers, SSN, bank information, etc. - from thieves.

Dangerous Browsing

So how do online crooks trick you into parting with your cash? Much more cleverly than you might have suspected.

A report released by McAfee called “The Web’s Most Dangerous Search Terms” reveals a lot about how online scams and crimes work.

The riskiest search terms are, in this order:

  • Lyrics
  • Free
  • Web
  • Gear, gadgets, games
  • Olympics
  • Videos
  • Celebrities
  • Music
  • News

What does this mean for you? After you search a term, say, “song lyrics," a list of Web sites will come up. You choose one by clicking on it. If the site is malicious, you could be compromised in a couple ways:

  • Simply visiting the site could infect you
  • Clicking on any links on the site could harm you

What Happens Once You’re Infected

Criminal sites often work by installing spyware onto your computer. You might find that some of your online passwords don’t work, then find yourself redirected to a site on which you have to enter personal information to “confirm” your identity.

Unfortunately, many scam sites look legitimate. And many Americans have spyware on their computers. Some spy programs work by recording password information you type in and sending it to another computer (the criminal’s).

How to Protect Yourself

  1. Stick to sites you know and trust. Understand that, when you attempt to download things for free, you may get much more than what you pay – in an unpleasant way.
  2. Install security programs onto your computer.
  3. Update your computer regularly. Many updates are designed to protect against the latest scams and viruses.

Protecting yourself online is important.

Some people's finances have been ruined thanks to identity theft scams. In fact, some people wind up filing bankruptcy because of identity theft.

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Sunday, May 24th, 2009

Filing Bankruptcy Prevention: Techniques for Avoiding Identity Theft

Identity theft is a crime that occurs when someone uses another person’s identification information to make credit transactions.

The severity and specifics of identity crimes vary from case to case, but identity theft victims often face frustrating (if not devastating) setbacks to their credit.

In fact, some people are forced to file bankruptcy thanks to these identity theives.

Although there’s no guaranteed way to prevent identity theft, a new (free) service may help you determine your risk for becoming a victim.

Traditional Wisdom: Check Your Credit Report

Checking your free credit report (www.annualcreditreport.com) is one of the most important ways of making sure your not a victim of identity theft.

By comparing action reported by the three major Credit Reporting Bureaus with action you know you’ve taken, you can see whether anyone besides you has been using your personal information.

But, though such checks can help you discover identity theft before it becomes a huge headache, they can only detect crimes that have already been committed.

Calculating Your Risk

The new service from MyIDScore.com claims to predict how likely you are to have your identity stolen. Here’s how it works:

• Visit www.myidscore.com and fill in the personal information it requests (note: giving your Social Security Number is optional).
• Answer multiple-choice questions to verify your identity.
• View your “identity theft risk” score, which ranges from 0 to 999.

Lower scores indicate a lower risk of identity theft victimization.

How It Works

According to the Washington Post, the service works by identifying warning signs that someone has used all or part of your personal information to take credit action.

The service can reportedly detect suspicious actions before actual purchases are made – for example, if a thief applies for and is issued a credit card using your SSN.

Insiders for the site suggest the service for those who have found out that their personal information was compromised in a data breach (data breach updates).

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Posted in Identity Theft | 2 Comments »

Wednesday, April 8th, 2009

Assert Your Rights As a Consumer

Unfortunately, a recent report from the FBI suggests that cyber crimes increased as much as 33 percent last year.

This means that, as a consumer, you need to take steps to protect yourself and know what you can do if you’re victimized by online fraud.

Fair Credit Reporting Act

This law gives you the right to access your credit report for free and to challenge any incorrect information you see there.

Staying abreast of the information on your credit report is one of the best ways to make sure you aren’t victimized by identity theft and other cyber crimes. Just follow these steps:

  • Go to www.annualcreditreport.com and request a free credit report from Equifax, Experian and TransUnion once every year. (You may want to request one every four every four months, or all three at once.)
  • Check the information against your own records. If you notice any inaccuracies on your report, contact the agency immediately.
  • Be sure you file all complaints in writing and persist until the matter has been handled appropriately.

Incorrect information on your credit report can harm your overall credit rating – when you apply for loans or credit cards, you may be offered higher interest rates than you would have been otherwise or even be denied a loan entirely.

Truth in Lending Act

This law is designed to protect consumers in credit transactions.

Lenders are required to disclose specific information about loans (including interest rates, payment periods, late fees and more).

When lenders don’t comply with the terms of this law, your rights have been violated and you may want to take action.

Fair Debt Collection Practices Act

Creditors must adhere to strict rules when trying to collect money from you: they’re limited to calling between certain hours of the day, prohibited from certain types of contact altogether and forbidden to deceive you in order to collect money.

How to Know If You’ve Been Victimized

Besides these two acts, the government has outlined housing acts, credit reporting acts and others to make sure you get a fair shake in the world of credit. But how can you be sure you’re taking the right steps?

Consulting with a bankruptcy lawyer familiar with the laws in your state can be an effective way to make sure your rights as a consumer are recognized and, if they aren’t, to take appropriate legal action.

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Monday, March 9th, 2009

Protect Your Credit Identity - Monitor Your Credit Report

The crime of identity theft occurs when someone uses another person’s identifying information (including Social Security Number, account numbers and credit card information) to make fraudulent transactions.

Unfortunately, the same technological advances that allow us to pay bills, shop and bank over the Internet also offer identity thieves opportunities to steal our data.

What Happens if My Identity is Stolen?

If you’re victimized by an identity thief, you may find your finances thrown into turmoil – and, depending on how quickly you realize the problem, you may have quite a headache in store.

Identity thieves can do many things, including:

  • make purchases with your credit cards
  • pose as you during a criminal arrest
  • use your SSN to pose as you during everyday life
  • obtain lines of credit using your information

Preventing Identity Theft

There’s no surefire way to prevent identity theft, but you can take steps to make sure you protect yourself as much as possible, including the following.

  1. Check your credit report! This is the single most important preventive measure you can take. Visit www.annualcreditreport.com for a truly free credit report from major reporting bureaus. This report will include information about action on all of your accounts. You’ll be able to see any suspicious activity – and take care of it immediately.
  2. Avoid phishing scams. Be cautious about e-mails. Many scammers pose as legitimate banks or lenders and request personal information for “verification” purposes. Never send sensitive information unless you are SURE you know where it’s going and that it’s secure.
  3. Treat your SSN like gold. Some people, like lenders and employers, actually need your Social Security Number; but most do not. If you’re uncomfortable about giving out your Social Security Number, ask how it will be used and why it’s needed. If you still feel uncomfortable, withhold that information. It is generally considered best practice to never give it out over the internet.
  4. Shred your important mail. Once you’re finished with credit card offers, bank statements, medical reports and other important mail, shred them. Shredding is an easy and effective way to prevent identity thieves from getting their hands on your information.

If you've been a victim of identity theft, a bankruptcy lawyer may be able to help you sort things out.

Learn more about how filing for bankruptcy may help you.

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Posted in Find a Bankruptcy Lawyer, Identity Theft | 1 Comment »

Wednesday, February 11th, 2009

Scammers Target Online Job Seekers

The FBI issued a warning to online job seekers on Feb. 4., as it and the Internet Crime Complaint Center (IC3) continue to receive numerous complaints about work-at-home fraud.

As millions of Americans who are currently unemployed seek job opportunities, scammers work to devise schemes to take advantage of them.

The FBI warns that criminals operate many work-at-home schemes.

The scammers attempt to gain the trust of online job seekers in an effort to use working relationships to increase the reach of their illegal activities.

Although many people are aware of "phishing" and other identity theft scams, those seeking employment may not recognize this brand of criminal activity until they are already in the middle of it.

In most of the reports to the FBI and IC3, job seekers are offered jobs processing payments, transferring funds or reshipping products.

The victims usually don’t realize they are participating in crimes by cashing fraudulent checks, transferring illegally obtained funds or handling stolen merchandise until it is too late.

Other scams the FBI warned of include "mystery shopper" jobs.

The victims of these schemes are sent fraudulent checks and instructed to cash the checks and wire the proceeds as an audit of a company's service. As payment, they’re told to keep a portion of the funds.

In addition to participating in a crime, the victims of these scams may also unwittingly give criminals their personal information, which can then be used for identity theft.

These "employers" have reportedly used victim's identities not only to open credit accounts, but to commit additional crimes as well.

Richard Kolko of the FBI National Press Office advises everyone who may be seeking a job online to be wary of unsolicited job offers and to report any criminal activity.

The old adage applies - If it seems too good to be true, it probably is.

If you've been a victim of identity theft and your finances have been hurt, filing bankruptcy may help you.

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