Wednesday, July 24, 2019

Driver's License Fraud

By Greg Wright
MBA, CFE, CFP®, CLU, ChFC
Certified Fraud Examiner & National Speaker

Recently, I visited a dentist recommended by a friend.  After filling out the standard paperwork, the receptionist asked to see my driver’s license.  She was getting ready to scan it into the office system when I told her that I did not want her to copy it.  She said that it was their policy.  I said that she could look at it to verify my identity, but she was not to copy it because it could lead to identity theft.  Further, since I was a cash-paying customer, and dental insurance was not involved, the dental practice had no obligation to copy it.  She called the practice manager into the conversation.  I refused to budge, and the dentist refused to budge.  I left and went back to my old dentist. 
In my opinion, you should not allow (never allow) your driver’s license to be copied or the DL number to be recorded by anyone other than law enforcement or events surrounding a traffic accident. You might be required to prove your identity, and that is okay to show it to appropriate individuals.
The really important information on your driver’s license is the ID number itself. With that number, someone could write a check using a facsimile of your check, or (seriously) give that number to law enforcement at the time of their traffic incident while claiming that they don’t have the physical card with them.
Criminal identity theft might occur when a fraudster has an incident with law enforcement - may be a traffic violation or a DUI felony - and someone claims to be you. They might leave you with unpaid parking tickets, a court date that you know nothing about, or an outstanding warrant for your arrest. Once “you” fail to pay the ticket or fail to appear in court, your real problems begin.  You could find yourself in county lockup making new friends.
If you file your taxes electronically, you might be asked for your driver’s license number so the IRS can verify that you are actually you.  Someone using your driver’s license number could spend your tax refund.  Try getting that corrected.
Protect your driver’s license.  In some ways, it is more important than your Social Security number.
Note: the driver's license shown above is a sample furnished by the BMV.

Tuesday, January 29, 2019

Email continues to be the weakest area of security for the average consumer.

By Greg Wright
MBA, CFE, CFP®, CLU, ChFC
Certified Fraud Examiner
National Speaker

The number of U.S. data breaches reported last year decreased from 2018’s all-time high, but the number of consumer records exposed containing sensitive information more than doubled!
An important observation is the number email-related credentials stolen.  Because a majority of consumers use the same username/email and password combinations to access multiple accounts, this creates serious vulnerability. 
This increased hacking of consumer email related data is very serious and, with even more consumer information in the hands of fraudsters, the identity theft risk to consumers continues to increase.

Email continues to be the weakest area of security for the average consumer. As indicated in my Greg’s Talk, “Electronic Home Invasion” consumers should avoid using their email address as their user name.  

Saturday, December 8, 2018

Marriott Data Breach & Stolen Passport

By Greg Wright
MBA, CFE, CFP®, CLU, ChFC
Certified Fraud Examiner
National Speaker

Just ten days ago, my wife and I returned from a trip outside the U.S. where our lodging included a Marriott.  When we read about their data breach, we were concerned.  The data breach included passport numbers.

If you traveled outside the U.S., you know how important it is to safeguard your passport.  US passports are a target of thieves and pickpockets and can be sold for over $2,000.  A British or EU passport is worth even more – over $3,000.  Most passport pictures do not look like the holder and can be used by criminals or terrorists.  How many of you look the same as your passport photo? Mine is nine years old. 

Every hotel or condo where we stayed wanted a copy of our passport.  Except when traveling, we kept a color scanned picture of our passport with us at all times.  The actual passport was secured in the room safe (along with most of our cash). 

If you were a victim of the Marriott Data Breach and you want to report your passport number compromised, you may decide to report the incident.  Once your passport has been reported lost or stolen it is invalid and cannot be used again. You will need to apply for a new passport by filling out Form DS-11: Application for a U.S. Passport. That may take a month.  Sometimes two months.  If you use an "identity monitoring service" (I highly recommend them), notify the service.

Passports numbers can be used in conjunction with other pieces of personally identifiable information (PII) to commit criminal identity theft. 

If your passport number was stolen in a data breach, but you still have your passport in your possession, there is no way to flag your passport to alert authorities.  You can contact the National Passport Information Center at 1-877-487-2778 or email them at NPIC@state.gov for more information about the steps that can be taken if you are concerned your passport number may be used by someone other than you.  

If your passport is stolen, here are the steps you should take:
1. Call the State Department’s office with any questions at 1-877-487-2778.  If you are outside the U.S., contact the nearest U.S. Embassy or Consulate.  They can help you with the documents necessary for you to exit the country you are visiting and to enter the U. S.  You will need to visit them in person.
2. File a police report. A crime has taken place and should be reported to the local police. This will help you prove that it was stolen.
3. You will need to fill out Form DS-64: Statement Regarding Lost or Stolen Passport.  This is incredibly important to do as soon as possible after the discovery of theft or loss in order to avoid the use of your passport for illegal activities.

4. You will need new passport photos, some type of identification (driver's license), airline tickets, and evidence of US citizenship. Also, your application for a passport and statement regarding your lost or stolen passport.
If you are out of the U.S., it certainly will dampen your vacation.  

Sunday, September 16, 2018

Forgery update

By Greg Wright
MBA, CFE, CFP®, CLU, ChFC
Certified Fraud Examiner
National Speaker



Updated Dec 2, 2018 - David has met with the FBI Special Agent and Postal Inspector I referred him to as well as his county Prosecutor.   He learned from law enforcement that his former insurance agent has “taken the fifth” and would not answer any questions posed by law enforcement. 

Government investigators have ordered the insurance agent's out-of-state trust company to provide a list of the insurance agent’s clients.  They have identified two individuals stung by the same IRA scam and expect to find more. 

The insurance agent appears to be attempting hiding assets and keeping a low profile.  According to David, he is living in a vacation lake home and has transferred his personal residence into his wife’s name. 


David was assured by the Government investigators that the case was a “slam dunk.”  Maybe.  However, the wheels of justice are slow to turn.  

-------------------------------------------------

Yesterday, David met with the Indiana Securities Division and has an invitation to meet with the FBI.  

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The last time I saw David, it was months ago. He was in the audience when I gave a presentation to his business group. 

Three weeks ago, David called and said, “What do you think about self-directed IRAs?”  I told him that it depends on the underlying investment and the honesty of those involved in the transactions.  I suggested that he read an article I wrote three years ago, “Self-directed IRA Fraudster.”

A few days later David asked to meet with me regarding a confidential matter.  He said that he would buy my lunch.

A self-directed IRAs is an individual retirement account that the investor controls with investments of his or her own choosing. These IRAs may invest in real estate, private mortgages, promissory notes, precious metals, cryptocurrencies, and private company stock. Last month, the SEC warned that assets in traditional IRAs — stocks, bonds, and mutual funds — generally fall under the agency's oversight, but that is not the case with self-directed IRAs, “which lack transparency.” 

David and I met at a Cracker Barrel restaurant.  He brought along his best friend.  I’ve known David (not his real name) for several years.  He has an easy laugh, is in his 40s, married with kids, and found him to be a straight-forward, church-going business person.

He said that, four years ago, he changed jobs and his insurance agent suggested that he use a self-directed IRA to improve his investment’s return.  At that time, you were lucky if a bank CD paid one-half percent.  His insurance agent said that he could get him seven percent.  The insurance agent set up the IRA and David wrote checks that totaled just under $50,000 to the IRA Trust company located in Ohio.  Next, he authorized the purchase of a promissory note that paid 7% and had a balloon payment to be made by the borrower that was due in three years – the payments were due a year ago. 

The promissory note was a year past-due!

After the balloon payment dates had not been not met, the insurance agent continued to stall and avoid David for several months.  When David contacted the trust company, he found that he had not received all the paperwork, and he did not recall seeing or signing some of the documents.  Another of David’s friends (a mortgage broker) said that the some of the signatures looked “exactly” the same and could be “traced forgery” signatures. 

A forgery expert taught a CE course I attended and suggested to the class that document signatures that appeared identical were often “forged.”  A “traced” signature is forged by tracing a genuine signature.  Often, the genuine signature is placed on a glass window and the target document is placed on top,  The fraudster then will trace the genuine signature producing a signature that is exactly like the original.   You probably couldn’t sign your name exactly the same two times in a row. Here is my past article on forgery

I told David that federal investigators have told me that forgery was a leading cause of insurance agents being convicted of fraud, going to prison, and losing their license.  In a complex investment crime, it was often the easiest part of the crime to prove.

David asked what I would do.  I suggested that he speak with his attorney, and I would be happy to help his attorney. 

It has been my observation that fraudsters use the same scheme several times.  If it worked on David, it probably would work on his other clients.  Someone might speak with the agent’s general agent.  Also, he might meet with the Indiana Department of Insurance or the Indiana Securities Division.

David called me a few days later to say that he found that a friend that had also invested in similar high return promissory notes and used the same Ohio trust company.  All of the promissory notes resulted in the money flowing directly into the insurance agent’s business account. 

Yesterday, David called to tell me that he was meeting with the Indiana Department of Insurance next week.


“I am more concerned with the return of my money than the return on my money.Will Rogers

Tuesday, September 4, 2018

Identity theft- the old fashion way

By Greg Wright
MBA, CFE, CFP®, CLU, ChFC
Certified Fraud Examiner
National Speaker

We read about the sophisticated hacking and ransomware attacks that damage entire networks, and the new ways to steal or fabricate someone’s identity.   However, it's easy to forget that some of the things that used to a problem in the past are still a problem.
Your credit card number plus the security code on the card is already in the hands of a fraudster or simply is being offered for sale on the dark web.  At the end of this article, I’ll tell you what I do to help protect my credit card from being used without my permission.  
In this past August, a data breach was discovered that affected restaurants throughout the Midwest. Investigators believe that the breach happened early in 2017 and continued through the end of that year. More than 500,000 credit cards were compromised in the breach.

The company has sent out notification letters to the victims and offered free identity monitoring for the affected customers. Maybe you got one. They also revamped the payment card system in April of this year, and they advised all of their customers to monitor their account information.
This incident shows that “old-fashioned” methods of stealing identifying information are still out there, even if they’re sometimes overshadowed by larger events.
To help minimize the risks associated with this kind of incident, there are steps that consumers can take:
1.     Ask your credit card to alert you about suspicious transactions – 
2.      Monitor your account statements

Greg’s tip: ask your credit card company for a new card number every year or when you see something suspicious or find out about a card data breach with a vendor that you have used.  

Sunday, July 1, 2018

Cell phone financial fraud – often an inside job

By Greg Wright
MBA, CFE, CFP®, CLU, ChFC
Certified Fraud Examiner
National Speaker

Increasingly, financial fraud victims report a scam in which their cell phone number is transferred to a new carrier without their knowledge, and financial accounts were then looted.

Once the cellphone number has been “ported” (transferred) to another carrier, the fraudster can gain access to the victim's various financial accounts by claiming to have forgotten their password and requesting a password reset via text message. He doesn’t physically need your phone to do this.  Moreover, if it is at night, you’ll be asleep . . .

The fraudster then changes your password, gains access to your financial accounts, and begins transferring money out of your banking, retirement and securities accounts. The fraudster acts quickly before you notice.

Because of the increased frequency of this scam, it may not be that you lost your cell.  Often, an accomplice employed by the cellular network contractor may have been used.  Yes, often it is an inside job.

My advice is to avoid using portable devices to conduct financial advice.  Never, never use WIFI.  But, if you must, whenever using the internet to make financial transactions, always use two-factor authentication*. 


I use checks, stamps, and USPS big blue mailboxes.  Old fashion, yes.  However, much safer.

Two-factor authentication involves using your mobile phone to receive one time passwords from the financial institution.  Without these codes, which are usually comprised of four numerical digits, the fraudster cannot carry out any transactions on your account, and even if he tried, you would be alerted to the fact that someone is in your online banking account because you would receive real-time confirmations.

Thursday, February 1, 2018

Latest Data Breaches. Are you exposed?

By Greg Wright
MBA, CFE, CFP®, CLU, ChFC
Certified Fraud Examiner
Certified Financial Planner™

Three Indiana data breaches reported by the Identity Theft Resource Center includes Hallmark Home Mortgage, Lincoln National Life Insurance and the Pension Fund of the Christian Church.

The reporting of all data breaches, since they have become more common, appears to provide less and less information.  Also, it has been determined that many data breaches are never reported.  

The Hallmark Home Mortgage was discovered, according to publicly reported data, on Nov. 17, 2018, and published (drumroll) on January 12, 2018.  Apparently, a former employee may have accessed some customers' personal information.  the company motto is "Our only interest is you."


Lincoln National Life Insurance Company data breach was published on January 26, 2018.  We have been unable to learn any other facts about this data breach.  The company motto is "Its name indicates its character."  Maybe they notified its policy-holders.  We do not know.



Pension Fund of the Christian Church became of the data breach and notified its membership, according to its official letter.  The data breach was published on January 16, 2018.  The organization's motto is "Strong Smart Secure."

It is a dangerous world.  You trust those that take your money and give them the keys to your identity.  Be careful.  Your identity is probably already for sale on the dark web.  Also, someone is using your Social Security number without your permission. 

What is your plan?