Reuters Money
Educated and affluent = potential investing fraud victim
If you’re well-educated and affluent does that make you invulnerable to fraud? Hardly. If you’re willing to make high-risk investments to get high-return, there’s not only a target on your back, but experts say your personality types makes you susceptible to be taken.
“Most of us think of ourselves as invulnerable,” says Shoshana Lucich, of the recently opened Stanford University-based Research Center on the Prevention of Financial Fraud.
A really good con artist has the ability to get buy-in even from people who believe they know better.
“If it sounds too good to be true, you’re probably dealing with an amateur,” Lucich says, quoting Pat Huddleston of The Investor’s Watchdog.
The Bernie Madoff case is an extreme example, but an example nonetheless, of how even well-heeled people can shift their focus to the dollar signs and away from due diligence. Another is the case of Raffaello Follieri, actress Anne Hathaway’s former boyfriend, who was convicted of ripping off a collection of wealthy victims, including investor Ron Burkle.
The institute, sponsored by the Stanford Center on Longevity and the Financial Industry Regulatory Authority’s Investor Education Foundation, is collecting information and encouraging the study of a variety of frauds, including investor fraud. An estimated $1.7 billion was lost to fraud in the U.S. in 2010. The institute is hosting a fraud summit in Washington, D.C. next month.
Lucich says fraud is a difficult area to get a handle on since a many victims deny being taken. That is widely attributed to their shame and disbelief.
Data breach victims more likely to be fraud targets: Study
Victims of data breaches are far more likely to become the victims of fraud than other consumers and credit card issuers need to do more to protect their customers, a new study from the firm Javelin Strategy & Research found.
About four percent of consumers are victims of fraud, Javelin said, but if you’ve been a victim of a data breach, that risk rises to 17 percent.
The annual report from Javelin comes on the heels of a flurry of massive data breaches that exposed millions of consumers’ personal information, credit card numbers and other details and punctuates the real risks victims face. The sophistication of hackers has been particularly problematic, the company said.
Breaches of customer data from Sony customers exposed more than 100 million accounts and came following an attack on email marketing giant Epsilon. But it was the far smaller attack on Citigroup in May that really ratcheted up the pressure on banks as lawmakers started pushing hard for a data notification law.
“A new wave of hacker attacks threatens the current security model, resulting in a call to action for issuers to take a strong look at the processes in place for detection and prevention of fraud,” said Philip Blank, Javelin’s managing director of security, risk and fraud.
About $37 billion was lost last year in the U.S. to credit card fraud, Javelin said. New account fraud — when an account is created in someone else’s name after their identity is stolen — was the biggest area of loss at $17 billion.
Even though losses per consumer are often in the thousands, fraud victims are protected from having to pay the fraudulent charges. However, the process of clearing up the charges can be extremely time consuming. Javelin said the mean amount of time for a consumer to resolve someone opening a new account in their name is 49 hours.
The good thing about credit card fraud, from a cardholder’s stand point, is that ultimately the issuer is liable for fraudulent transaction amounts. Still, the investigative process can take a while and you will be wholly involved in it. Moreover, there are a number of things that can go wrong and your credit history may suffer as a result. So just because someone else is paying for it, does not mean that you will necessarily get off scot-free. http://blog.unibulmerchantservices.com/c redit-card-issuers-do-poorly-at-detectin g-well-at-resolving-fraud
IRS sees staggering jump in identity theft cases
Identity theft fraud caught by the IRS has skyrocketed since 2008, the Government Accountability Office said in a report released this week.
n 2010, the GAO said the IRS found 245,000 cases of identity fraud — cases in which Social Security numbers of others were used to either falsely try to collect a refund or to get work and avoid taxes. That is up from fewer than 52,000 cases in 2008.
A particularly scary part of the crime is that the victims have no way to protect themselves.
“The incidence of tax-related identity fraud is indeed staggering,” said Paul Stephens, director of policy and advocacy for Privacy Rights Clearinghouse. “The number of reported cases significantly undercounts the actual numbers because there tends to be a significant delay in detecting most cases of tax-related identity fraud.”
He said the government is somewhat hamstrung from doing more to protect the victims.
“Unfortunately, various laws constrain the IRS from taking more aggressive action to curtail this abuse,” Stephens said. “For consumers, tax-related identity theft can be extremely difficult to resolve, despite the fact that IRS has set up a special unit to assist taxpayers with this problem. Other than trying to protect their Social Security numbers from unnecessary disclosure, there is little that consumers can do to protect themselves from this type of identity theft. ”
According to the GAO, privacy laws sharply limit information that is shared with victims and even with criminal investigators.
Guess who is the worst culprit for dumpster diving in putting WHOLE SSN on paper……. the IRS.
