1. Fraud

2. Types of Fraud Check Fraud Credit Card Fraud Credit Fraud
Identity Theft

3. Check Fraud Definition Statistics
Unlawful use of checks in order to illegally acquire or borrow funds that do not exist within the account balance or account-holder’s legal ownership
Stealing an unsigned check from someone else for the purpose of passing it as yours
Writing a check that doesn’t have enough funds in the checking account to cover it, or the checking account doesn’t exist at all
Statistics
500M checks are forged in US each year, for a total of over $10B
Surprised?
Checks are the most popular form of payment for business-to-business transactions, estimates are 80%

4. Types of Check Fraud Paper Hanging Check Kiting Check Washing Forgery
When a person writes checks on a checking account that they know is closed
Check Kiting
When a person opens 2 checking accounts, writes a check from one account to the other
Withdraws money from 2nd account before it has time to clear
Check bounces from 1st account
Check Washing
Intercept a check, usually in the mail
Use chemicals to remove all of the writing on the check so they can write in their own information
Forgery
A person takes or steals a check from a business they work for and writes it out to themselves
A person alters a check that has been legitimately written by adding words and/or digits in order to inflate the amount

5. Credit Card Fraud Unauthorized charges to your credit card
Counterfeit cards
Occurs when:
Cards are lost or stolen
Mail is diverted by criminals
Employees of a business steal customer information

6. Credit Card Fraud
The Federal Trade Commission estimates that 10 million people are victimized by credit card theft each year
Credit card companies lose close to $50 billion dollars per year because of fraud
These costs “trickle down” in higher interest rates and fees for all consumers

7. The bottom line... All cardholders pay for credit card fraud losses
Victims spend time and money to repair the damage
Credit card issuers charge higher fees and interest rates to cover their losses

8. Corporate Breaches Target November 27 – December 15, 2013
40 million shoppers potentially affected
Point-of-sale system hacked
Malware in terminals where cards swiped or
Customer data collected while on route from Target to its credit card processors
Thieves gained access to data on the magnetic strips
Produce counterfeit versions
Withdraw cash from ATMs with counterfeit debit cards

9. Corporate Breaches Home Depot April – September, 2014
56 million cards potentially compromised
Software that was slipped into the companies’ networks
Used to skim payment-card data
Unique, custom-built malware
Customers not liable for fraudulent charges
$450 in Home Depot gift cards billed to my Visa via paypal
Cost Home Depot $62M in investigation, credit monitoring service, call center staffing
Reimbursed $27M for its insurance

10. Credit Fraud
Lying in any way on a written application for a loan, goods or property, or a credit card
Giving a fake or stolen Social Security number
Giving a fake name and address
Misrepresenting your income, financial obligations and ability to pay

11. Identity Theft
Identity theft is the use of someone’s personal information, such as their Social Security number or date of birth, to commit financial fraud
Type of Fraud
Percent Reported
Misuse of Existing Credit Card
64.1%
Misuse of Other Existing Bank Account
35%
Misuse of Personal Information
14.2%

12. Identity Theft Fastest growing crime in America
Every minute about 19 people fall victim to identity theft
It takes the average victim an estimated $500 and 30 hours to resolve each identity theft crime
Studies have shown that it’s becoming more common for the ones stealing your identity to be those closest to you
32% were family members or relatives
18% were friends, neighbors, or in-home employees

13. TX Penalties for Fraud Check Fraud Credit Card Fraud
Forgery - is a State Jail Felony
Stealing or receiving a stolen check - is a Class A Misdemeanor
Credit Card Fraud
State Jail Felony
Punishable by fines and up to 2 years in a state jail

14. TX Penalties for Fraud Identity Theft
Additionally, if you are convicted of identity theft, the judge can order you to pay restitution to the victims
Any lost income or other expenses incurred while trying to resolve problems caused by the theft

15. How It’s Done Dumpster Diving
Stealing credit card information from discarded receipts or account statements in people’s trash
Shred unwanted documents that contain Social Security numbers, bank and credit card information and other sensitive financial information

16. How It’s Done
Skimming
When dishonest employees make illegal copies of credit or debit cards using a “skimmer” device that captures credit card numbers and other account information
The stolen credit information is used to make purchases by phone and internet, or to make counterfeit cards

17. How It’s Done
Phishing
A financial crime that starts with massive numbers of deceptive spam s
These s look like they come from your bank
But they are just a trick to get account numbers and passwords

18. Example of Phishing

19. How to Prevent It Only carry essential documents with you
Don’t carry extra credit cards, your Social Security card, birth certificate or passport on you
Keep new checks out of the mail
When ordering new checks, pick them up at the bank instead of having them mailed to your home
Be careful when giving out personal information over the phone
Only give info if you initiate the call
Your trash is their treasure
Shred your receipts, credit card bills, bank statements, etc.
Make sure others are keeping you safe
Ensure that your employer, landlord or anyone else with access to your personal date keeps your records safe

20. How to Prevent It Protect your Social Security Number
Do not print on your personal checks
Follow your credit card billing cycles closely
Go with electronic statements
If have paper copies, make sure you receive each month
Keep a list of account numbers, expiration dates and telephone numbers filed away
Good to have if your wallet is stolen
Create passwords or PIN numbers out of a random mix of letters and numbers
Do not use your birthday or other familiar numbers
Makes it harder to break

21. Security Codes
Credit card companies use security codes to help prevent unauthorized or fraudulent use by phone and online
These numbers help ensure that you have the card — not just the account number
Merchants are prohibited from keeping or storing any security codes after transactions are completed

22. Security Codes
Security codes for Visa, MasterCard and Discover cards are the 3 digits located on the back of the card in the signature box.
Security codes for American Express are 4 digits long, printed on the front of the card above the right side of the main credit card number.

23. New Cards
For added protection, credit card issuers ask you to call from home to activate new credit cards
As soon as you receive your new card, sign the back of it with a permanent black ink pen

24. Should you write “Ask for ID”?
Writing “Ask for ID” in the signature space may not be a good idea as your transactions might not go through if the card isn’t signed
Consider signing your card and also writing “Ask for ID”

25. In case your card is lost or stolen
Record all your account numbers and company contact information and keep the record in a secure place
That way you can easily find whom to call to report the loss

26. Protect your PIN
Never write down your personal identification number (PIN)
Never give your PIN to anyone

27. Protect your account numbers
Never write your credit card number on post cards or on the outside of envelopes
Never provide your card number on the phone, unless you know it’s a legitimate, reputable business
Never give your account number to anyone who calls you on the phone or sends you an
If you let others use your card, you are responsible for charges

28. Billing Statements
Review credit card statements closely on the day they arrive
Report any questionable charges to your card issuer immediately
A missing credit card statement may indicate stolen mail
Contact your card issuer right away if your bill doesn’t arrive around the usual date

29. Online account access
If you have a computer, consider signing up for online account access
This way you can track your account activity between statements

30. Liability
Fraud victims are not generally required to pay for unauthorized charges
Victims may be liable for up to $50 of the loss, depending on the circumstances

31. Protect your wallet or purse
Keep a close eye on your belongings
Never carry all your credit cards
Bring only the 1 or 2 cards you might need
Carry your credit cards separate from your wallet
If your wallet or purse is lost or stolen, call your credit card issuers immediately

32. Watch your credit card
Watch closely when store or restaurant employees handle your card to make sure they are not copying or “Skimming” your credit card number
After you make a purchase and your card is handed back to you, make sure the card is yours.

33. Take Precautions
Notify your credit card company if you are going to be traveling away from home to prevent any inconvenience if your issuer should block your account from being used in a different city
Notify your credit card company if you are going to make any unusually large purchases so that your account is not flagged for possible fraud

34. Safeguard your Mail
Notify the post office and your credit card company immediately if you change your address
Lock your mailbox. Never leave mail in an unlocked mail box or apartment building lobby
Put your return address on out-going mail
Shred unwanted credit card solicitations before discarding

35. Internet Safeguards
If you bank online, don’t use “automatic sign on” for bank or credit card sites
Avoid providing your credit card number to websites offering “free access”
Install a firewall in your computer to prevent unauthorized access from hackers

36. Reporting credit card fraud
To report credit card fraud
Call your card company immediately about
Lost or stolen cards or PIN numbers
Unauthorized charges on your statement
Request a fraud affidavit
Get a police report if necessary

37. The Fair Credit Billing Act
is a federal law that gives you the right to resolve billing errors, including unauthorized charges
If something goes wrong, you have the right to dispute the charge
To dispute billing errors on your statement, contact your card issuer within 60 days from the statement date or you lose your right to file a dispute
Note: There is no time limit for reporting fraudulent charges.

38. Disputing charges
Always dispute billing errors in writing. You can call your card company and follow up with a letter.
Describe the dispute in a few sentences
Send it to the correct address for billing disputes
Do not include your dispute letter with your bill payment