Thursday, April 5, 2012

Close Criminal Encounters of the E-Kind (April 6, 2012)

With technology continuing to progress at a steady clip, the FBI and other law enforcement agencies regularly alert the public about a parallel surge of electronic crimes, such as identity theft and phishing (seeking personal information via suspicious e-mails).
In recent years, the number of identity theft incidents, due to the annual increase in e-filing tax returns, has jumped during tax season and is hitting new levels in 2012. Last year, the IRS reported more than 260,000 suspicious returns totaling more than $1.4 billion was discovered before they were sent to the wrong taxpayers. This year, so far, 2 million returns have been flagged for investigation.
In a nationwide crackdown, the IRS stepped up examinations of suspected identity thefts as the tax season began in January, and said it investigated over 100 people in 23 states.
Even so, the crime persists. Regrettably, I found out first-hand.
Until now, I was never a victim of identity theft or e-crime. But, out of the blue, last week, when I electronically filed my federal tax return, I was stunned when it was rejected with the following notice: The primary SSN in this return is equal to the primary SSN in another return filed for the same tax year.
This fast growing E-crime occurs when stolen Social Security Numbers are used to fraudulently file federal returns with refunds due. The thieves, according to what an IRS investigator told me, usually work for criminal enterprises that train people to abet them. Of course, it can only succeed when a taxpayer hasn’t filed. However, if the stolen SSN is used illegally, when the appropriate individual attempts to E-file, the second return is flagged with the message noted above and an investigation ensues to determine which one is valid.
While exploring my status I learned from IRS personnel that this type of fraud has reached “epidemic” proportions this tax season. Luckily, I discovered my dilemma before any loss.
After checking my credit status, which had not changed, I followed procedures suggested by the IRS to protect my finances, including contacting the Federal Trade Commission’s fraud department, which immediately put a 90-day alert on my credit card and bank accounts.
Nevertheless, I checked the status of each of my credit/debit card accounts, which turned out to be unexpectedly fortunate.
In an episode unrelated to my federal tax ID theft, I discovered one account was closed because someone tried to use it for a $1.00 transaction. I learned that e-criminals often use that method to determine if a cardholder recognizes or ignores it. The credit card fraud investigator said that when a transaction for a small amount goes unnoticed, the e-thief usually feels safe enough to charge costlier items to that account.
Luckily, my credit card bank, aware of the ploy, immediately robocalled me for verification. However, I hung up before realizing its intent, as I find robocalls annoying. I would have only discovered the problem when I tried to use that card, which was red-flagged after the disconnect. As a result, that account was suspended.
Around the time I put alerts on my accounts, it was reported that Microsoft co-founder Paul Allen, one of the richest men in the world, was also a victim of identity theft. An AWOL soldier was identified as the suspect and arrested last Wednesday. 
When I read about that, I thought, if a billionaire — who, more than likely, has the ultimate high-tech protection — isn’t safe from identity theft, how can the rest of us avoid becoming victims?
Despite years of warnings and numerous efforts to educate the public, as well as various safeguards, we remain vulnerable to sophisticated e-thieves. Besides, there are those, particularly senior citizens and naïve college students, who, all too often, readily give up personal information or make it accessible to those who steal identities and, sometimes, life savings.
If you haven’t learned by now, here’s a quick refresher: never provide personal information, like Social Security numbers or birth dates, to someone claiming they represent what sounds like a legitimate organization, if you’re suspicious of the caller. Hang up, call the business or company yourself to verify if they’re seeking such data.  
I’ve heard that once you’re a crime victim the odds diminish that you’ll be victimized by that crime again. I have no idea how true that is, but, now that I’ve had a lesson in ID theft, I hope I don’t become a crime statistic again.
Nevertheless, I’ll be more alert to potential identity theft than previously. Basically, there was nothing I could have done to prevent either situation, except, as a few friends suggested, file soon after the tax filing season begins. I always inspect my monthly credit card invoices and check the receipts against posted transactions, but, from now on, I’ll check online once in a while to make certain there are no suspicious charges.
Two incidents are enough to make me more cautious and more conscientious of the state of my finances. Even if you’ve never been a victim, a similar approach just might nip in the bud a criminal encounter of the e-kind.