$900,000 of fraud money

Okay, I know $70 is not alot of money since that is the amount siphoned from my credit card by an unknown intruder. It is a pea-sized concern compared to Dave's massive fraud amount in this featured story. But a theft is a theft no matter what the amount is. It is the intention that has me worried. So here lies another interesting article related to ID fraud. This horrible event is so prevalent that it is happening every minute of the day to someone.


In fewer than six months, some $900,000 in merchandise, gambling and telephone-services charges were stolen out of his debit card. His attempts to salvage his finances have cost him nearly $100,000 and have bled dry his savings and retirement accounts. His credit score, once a strong 780, has been decimated. And his identity – SS#, address, phone numbers, even historical information - is still being used in attempts to open credit cards and bank accounts. The new credit card rules that go into effect on Feb. 26, 2010 are supposed to protect you, but will they?

"I have no identity," said Crouse, 56. "I have no legacy. My identity is public knowledge and even though it's ruined, they're still using it. "It really ruined me," he said. "It ruined me financially and emotionally."

Crouse is among the 11.1 million adults - one in every 20 U.S. adults - last year who have the dubious distinction of breaking the record of the number of identity-fraud victims in the U.S., according to a recent study. The cost to the victims: a collective $54 billion. The odds have never been higher for becoming a fraud victim. It's an easy crime to perpetrate, a crime that's almost impossible to catch when done in a sophisticated manner and a crime in which enforcement is very limited.

Endless paperwork
Crouse can attest to that. Once an avid fan of online shopping and banking, the Bowie, Md., resident would auction on, download songs from and use his ATM card like a credit card. He first noticed suspicious activity in his account in February of 2009 for small charges of $37 or $17.98. He had a full-time job then and was spending out of an account that generally held $30,000. "All of a sudden it really got bad," he said. "In August the charges hit big time -- $600, $500, $100, $200 - all adding up from $2,800 to $3,200 in one day."

He called his bank immediately and started what began a tiresome process of filling out what he said finally amounted to about 20 affidavits swearing that he was not responsible for the charges. He said one day he filled out an affidavit about a charge and the next day the bank had accepted similar charges approaching $4,000.

Now he is in double jeapordy after being unemployed: His $2,300 a week net income had dwindled to $780 in unemployment checks every two weeks and his accounts were getting drained daily - even after he closed his debit account. He opened a new account at a new bank and the next day both accounts got hit with a $1,100 charge. The new bank told him it was keystroke malware that had likely done him in. Someone had hacked into one of the sites he visited regularly, his computer got infected and picked up all his personal information by tracking every key he struck.

While much of the fraud came from online purchases and at gambling sites, there were new accounts opened in different names but linked to his bank account. There was one purchase of a plasma TV from a Best Buy in Florida that was shipped to a New York address. In another case a woman in North Carolina was writing out checks tied to his account.

High-value targets
Identity thieves steal mostly through two means. They take an established address and phone number of an identity that "has some value," like a doctor or a lawyer. In many instances, they can go to the Internet and acquire the matching Social Security number for as little as $50. They then have enough information to get an address changed with your bank account or a credit card account. They apply for new accounts as you. Others take over existing accounts through keystroke malware that you - and probably hundreds or even thousands simultaneously - have picked up through the Internet. Listening software then sits on your computer, perking up when you go to a bank site. It copies all your key strokes -- your user name, password, challenge question, account numbers, everything.


Money Honey SF said...

For some reason it's hard for me to believe that someone can steal close to a $1million before the owner even notices this scandal. Does that mean banks will be responsible for such losses?

I guess banks have a separate account where they have cash reserves to cover for such incidents.

Money Reasons said...

If it's only $70, you might want to make sure it wasn't your spouse.

My wife bought a special class at the local gym, and the following month, there was a charge from a different state. We thought someone had stolen our identity, turns out that it was that special class... Their billing was thru that remote location... Who would have guessed!!!

Usually if someone steals your identity, they go hog wild with it (or so I'd assume)...

I hope it turns out to be nothing! Good job stopping it early (if it is real)!

Investing Newbie said...

I think the author of the article was suggesting that because he had such a "comfortable" income flow, that is why he didn't mind the charges.

Regardless, I'm with you Money Honey. I call my bank if I see even 1 penny out of line! It's not for being stingy, but rather, I don't want something like this to get out of hand.

Money Honey SF said...

DH and I have separate credit cards. We've had this before our marriage. Thus, I am sure he did not bring up these charges.

What gave it away was a charge at a convenience store. I know for sure it was not done by me since I don't shop there. And it was done on superbowl sunday.