Robert Siciliano is a NextAdvisor.com Expert Guest Blogger
As the opening of new lines credit becomes more difficult, identity thieves are gravitating toward check fraud.
Check fraud is a problem of billions of dollars. As predicted by the Identity Theft Resource Center, check fraud, which accounted for 12% of financial crimes in 2007 increased to 17% in 2008. According to the fraud investigation report American Bankers Association Deposit Account, $ 969 million have stolen check fraud in 2006, compared to a reported $ 677 million in 2003. of the $ 969 million dollars lost to check fraud, 38% was stolen through return deposit scams, 27% was stolen using the controls cloned, 28% was stolen using counterfeit checks, and 7% was stolen by altering or washing checks.
In an article in the New York Post, a brazen ring of thieves enlisted crooked bank tellers to run a fraud control system that was reduced when the crooks made the mistake of forging checks a NYPD account. Two leaders of criminal hackers organized the counterfeit scam, using 950 "soldiers" or "mules" to deposit and cash counterfeit checks, netting millions of dollars. Three bank tellers were involved, stealing and selling customer profiles which included names, Social Security numbers and account numbers. identity theft of this kind of insider represents up to 70% of all cases of identity theft.
Check fraud victims include banks, businesses and consumers themselves. Our current system for cashing checks is somewhat flawed. The checks can be cashed and merchandise can be purchased even when there is no money in the checking account.
I presented a program on motivation and self-improvement in the women's prison in Massachusetts a few years ago. I asked a little background on the women I talked to, just because I watch too many movies and I wanted to know if there was a possibility that I camber. The social worker informed me that about 80% of women were incarcerated for fraud and shoplifting check. It seems that when some people have a checkbook, they see as an opportunity to print money.
There are many forms of check fraud:
forged signatures are the simplest form of check fraud. These are legitimate checks with a forged signature. This can occur when a checkbook is lost or stolen, or when a home or business is burglarized. A person who is invited into your home or business can rip a single check from your checkbook and pay themselves as much as they like. Banks do not often verify signatures until a problem arises that requires them to assign responsibility.
forged endorsements usually occur when someone steals a check and cashes or deposits. There really is nothing to do to protect it from outside to keep their checks and going over their bank statements carefully.
counterfeit checks can be created by a person with a desktop scanner and printer. They simply create a check and make it out for themselves. To prevent your checks from being counterfeited, make sure you shred all canceled checks before throwing them, and be sure to lock all the controls in your home or office. Consider a locked mailbox so nobody can access your bank statements. You should also seriously consider online banking exclusively, and stopping paper statements.
Check kiting or check floating usually involves two bank accounts where the money is transferred back and forth, so they appear to contain a balance which can then be removed. A check is deposited in an account and the money is withdrawn despite the lack of sufficient funds to cover the check. In this case, it is usually the bank or he cashed the check that gets burnt, unless they are able to go after the person who used their own account.
Check washing involves editing legitimate control, change the beneficiary name and often increase the amount. This is the sneakiest form of check fraud. When checks or tax-related documents are stolen, either by mail or by other means, the ink can be erased using common household chemicals such as nail polish. This allows the thieves to endorse checks themselves. In this case, something as simple and inexpensive as a select uni-ball pen can help. Select uni-ball pens contain specially formulated gel ink (trademark Uni-Super Ink ™) that is absorbed into the paper fibers and can never be washed. The pen costs two dollars and is available in all office supply stores.
If you write a check to pay a bill, then put it in your mailbox for the postal carrier to deliver, you put yourself at a higher risk of check fraud. Thieves see that red flag and go phishing for checks. I suggest using a uni-ball pen and taking checks directly to the post office or drop them in a large box with blue letters.
If you plan to do any online banking, which millions, make sure your PC is protected with an Internet security software and all your critical security patches are up to date.
You can not prevent all forms of identity theft. However, you can greatly reduce your risk by making a small investment in identity theft protection, or taking other precautions.
Robert Siciliano, identity theft speaker, discusses fraud and identity security.
Robert Siciliano is CEO of IDTheftSecurity.com, an expert on identity theft, professional speaker, security analyst, published author and television news correspondent. Siciliano works with Fortune 1000 and start-up companies as a consultant on product launches, branding, messaging, representation, SEO and media. the thoughts and advice of Siciliano on all these issues often appear in both television and print media news, including CNN, MSNBC, CNBC, FOX, Forbes and USA Today. He has 25 years of safety training as a member of the American Society for Industrial Security. He is the author of two books, including The Safety Minute: Living on high alert; How to take control of your personal safety and to prevent fraud . He also established a partnership with Uni-Ball to help raise awareness of the growing threat of identity theft and provide tips on how you can protect yourself.