Entries in Identity Theft (16)


Beware of Identity Theft When Filing Your Taxes

iStockphoto/Thinkstock(NEW YORK) -- With the start of the tax filing season just around the corner, the IRS is on alert for rising cases of identity theft and tax fraud.

Many taxpayers can become victims if they are not very careful about protecting their personal information.  In some cases, thieves grab W2 forms and other financial documents from mailboxes.

"The problem is there's way too much information about us floating around out there," says Adam Levin, CEO of the security firm Identity Theft 911. 

He says thieves have posed as tax accountants.

"They will take the name as a store front of a well known tax preparation company set up shop for a few days," Levin explains.  People will then go in to get their taxes done and "all of a sudden the store disappears," along with taxpayers' personal information.

The IRS is well aware of the problem.

"If you think you have been the victim of identity theft and your refund has been affected, contact the IRS," says spokesman Eric Smith.  "We have a process for handling that."

Levin says the number of cases of taxpayer identity theft reported to his firm has soared 800 percent since 2008.

Copyright 2013 ABC News Radio


Debit Card Thieves Ship Shopping Spree to Victims

iStockPhoto/Thinkstock(ANCHORAGE, Alaska) -- When Chris and Susie Linford of Anchorage, Alaska, found out that their bank account was drained of nearly $5,000 without their knowledge, they were stunned.

“We had our debit card on us the whole time,” said Mrs. Linford, who believes the thief may have stolen their information remotely. Fortunately for the couple, their credit union, Credit Union One, quickly detected the fraudulent purchases and refunded their money. But the surprises didn’t end there.

In the weeks after the theft, the Linfords began receiving an odd assortment of Christmas gifts at their front door -- a veritable hodge-podge version of the 12 days of Christmas that directly corresponded with the thieves’ $5,000 shopping spree. Among other things the Linfords received:

  • A $900 signed Dale Earnhardt Jr. poster
  • A Chipper Jones autographed baseball bat
  • Six metal plant stands
  • A case of leather Samsung Galaxy Note covers
  • Four Northface jackets
  • A series of linen photo albums
  • Two women’s coats
  • One radar gun
  • And a letter from the fruit of the month club regretting to inform them that they do not deliver to Alaska

Mrs. Linford speculates that the thieves failed to change the shipping address when using the stolen information to order items online, either that or they planned to come by the house and pick up the goods before the Linfords noticed. An idea that Mrs. Linford says, would have been especially foolish: “I work from home and we have a very large dog, bad plan.”

The barrage of gifts slowed down after the Christmas season but has picked up again recently as vendors continue to send items that were on back-order when the crooks purchased them. Including Mrs. Linford’s personal favorite so far: “yesterday our little hacker sent us some virus protection software.”

Because of the nature of the crime, the Linfords were told that they do not have to return the items to the merchants, but that hasn’t stopped Mrs. Linford, who has been contacting each seller individually to return the ill-gotten goods. Otherwise the seller would have to pay out of pocket.

“We were told you’re welcome to keep it, but I thought no that’s not right,” Linford told ABC News.

With both the money and the items returned to their rightful owners, the case seems to have been put right. But as Linford points out there are still a few people out there suffering because of it. “I’m sure the thieves family’s are a little disappointed, they didn’t get their Christmas gifts.”

Copyright 2013 ABC News Radio


GAO Report: Alarming Rise in IRS Refund ID Thefts, Few Prosecuted

iStockphoto/Thinkstock(WASHINGTON) -- A new government report charts an alarming rise in tax return refund identity thefts and finds that few of the thefts are even investigated by the Internal Revenue Service (IRS).

The U.S. Government Accountability Office (GAO) report said the IRS identified 641,690 incidents of identity theft involving tax fraud this year as of Sept. 30.  That is an increase of 62 percent from the 232,142 incidents reported in 2011.

Just 0.1 percent of these cases initiated criminal investigations and the rest of the crooks were able to keep the ill-gotten gains.  Only 898 criminal investigations were initiated in fiscal 2012, the report said.

"Notwithstanding the IRS's efforts, its resources and ability to resolve cases are stretched thin," according to the Taxpayer Advocate Service's 2011 annual report to Congress.

Beth Tucker, IRS Deputy Commissioner for Operations Support, testified in front of the House Committee on Oversight Thursday, saying, "The IRS is working to speed up and further streamline identity theft case resolution so that innocent taxpayers will experience as little inconvenience as possible."

The dollar volume of fraudulent refunds is not known, according to the GAO.  Financial institutions recognized and returned to the IRS $754 million in tax refunds they found suspicious between January and Sept. 30, 2012.  The GAO said that figure is only a fraction of the total amount of refund fraud.

James White, a spokesman for the GAO, said the nearly 642,000 cases included many attempts by individuals or groups of criminals, but the IRS does not know how many individuals are responsible.

Thieves can obtain a taxpayer's name, and Social Security number in many ways, including hacking into a computer system or stealing paper files at one of the many organizations that use names and Social Security numbers in their records, including employers, schools and financial firms.  They then file a fraudulent tax return seeking a refund, often early in tax filing season before the real taxpayer files.

IRS officials said that "one of the challenges they face in combating this type of fraud is its changing nature and how it is concealed," the GAO report stated.

"While perfect knowledge about cases and who is committing the crime will never be attained, the better IRS understands the problem, the better it can respond and the better Congress can oversee IRS's efforts," the report continued.

The IRS has said it is pursuing ways to detect, resolve and prevent identity theft-based refund fraud, including a new filtering process that analyzes tax return characteristics.  On its website, the agency offers tips for those who believe their tax records have been affected by identity theft and how to prevent it:

  1. Don't carry your Social Security card or any documents with your SSN on it.
  2. Don't give a business your Social Security number just because it asks.
  3. Check your credit report every 12 months.
  4. Protect your personal computers by using firewalls, anti-spam/anti-virus software, update security patches, and change passwords for Internet accounts.
  5. Don't give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know whom you are dealing with.

Copyright 2012 ABC News Radio


Nationwide Utility Bill Scam Spreads to Midwest

Fuse/Thinkstock(NEW YORK) -- Utility companies in the Midwest are warning customers of an ongoing con that has already affected thousands on the West and East Coast in which a scammer claims households are eligible for an energy credit offered by President Obama to obtain personal information.

The Iowa Utility Association and three utility companies say a scam that falsely claims President Obama, who happens to be in Cedar Rapids on Tuesday, is providing energy credits by applying payments to utility companies with fake accounts provided by the scammers.

Scott Reigstad, a spokesman for Wisconsin Power and Light Company, an Alliant Energy company, said about 100 customers have been scammed since July 5.

"Nationally, the scams have been happening for months, some through social media, text messages, or fliers," he said.

Though many people wouldn't think of providing personal information to strangers on the phone, the scammer's pitch may be more persuasive than you think, especially if they already know the name of your utility company. "These credits that supposedly the president has offered seem fairly attractive to some people," said Mark Douglas, president of the Iowa Utility Association. "Because they offer the chance to reduce a utility bill, people are very willing to release that personal information."

Victims' stories vary, but the goal of the scam is to extract enough personal information from you to initiate identity theft.

"We had people reporting they have received calls from people saying they were utility representatives and they needed banking information now or their power would shut off," said Douglas.

Most of the scammed Alliant customers were contacted by phone through voice recordings or a person and were provided a bank routing number to pay their utility companies. Victims of the scam are instructed to provide their Social Security numbers in some instances, Reigstad said.

About 49 customers of MidAmerican Energy Company, Iowa's largest energy company, according to the firm, have tried to make payments with a non-working routing number used in the scam. Those customers were from cities including Des Moines, Waterloo, Iowa City, Davenport and Rock Island, Ill.

"Payments made using the routing number will not be applied to customers' bills," said Tina Potthoff, media relations manager with MidAmerican. "We are trying to reach out to customers to make sure no one else falls victim to this."

Starting in late June, customers began calling MidAmerican Energy Company to inquire about the non-existent government program.

"We've seen this at other utilities," Potthoff said. "The best possible way to put a stop to this is prevention and education."

The advice from MidAmerican and the other utility companies is to never provide personal information that the utility company should already have. If you're suspicious of someone who calls you and claims to represent your utility company, "hang up on the caller and give us a call so they know we are on the other end of the line," Potthoff said.

"If you're ever in doubt, give us a phone call as soon as possible," she said.

It's unclear where the scam originated, though Potthoff said the utility companies are working with local law enforcement to try to get to the bottom of it.

San Diego Gas & Electric issued an alert to customers warning of the scam on May 15. Pennsylvania Electric Company, PECO, released a warning to customers on June 28. Florida Power & Light Company issued a release last week and said 30,000 customers had tried to use the credit when making a payment.

For about six days in late May to early June, PSE&G, a utility company in New Jersey, noted customers were trying to or did pay their bills with the fake routing number and the payment bounced back because it was not a legitimate way to pay.

Bonnie Sheppard, spokeswoman from PSE&G in New Jersey, said about 10,000 customers tried to pay their bill with the scam "credit."  The company, which serves three-quarters of New Jersey's population, has over 2 million electric customers and nearly 2 million gas customers.

While customers in Iowa have mostly been contacted by telephone, victims have unwittingly encouraged their friends to join in the scheme by social media and word of mouth, said Potthoff of MidAmerican Energy.

"People think they are getting a good deal but they are publicizing a scam," Potthoff said.

Copyright 2012 ABC News Radio


One in 10 Children Are Victims of Identity Theft, Report Finds

Comstock/Thinkstock(NEW YORK) -- Children are increasingly becoming the preferred target of identity thieves, authorities say.

“We’ve seen children have this crime begin as early as five months old and then it goes on for years,” said Bo Holland, founder and CEO of All Clear ID, a company that offers basic identity theft protection to consumers.

“A parent will typically find out when their child is moving into adulthood,” Holland added.  “When they are about to go to college, they apply for that first loan and, boom, they get denied.”

In the last three years, there have been 57,000 cases of child identity theft reported to the Federal Trade Commission.  A new report from All Clear ID estimates that one in 10 U.S. children are victims.

Criminals can hack home computers in search of tax forms with a child’s Social Security number.  They also can target hospitals, child-welfare agencies and even schools.

“They’ll use your child’s Social Security number with a different name and a different birth date,” Holland said.  “So if you pull a credit report, the credit report is looking for a specific name and the birthday that goes with it.  And so you won’t find it.  You’ll get 'file not found,' and you’ll feel safe.”

“The problem is large and growing,” said David Vladeck, the FTC’s director of the Bureau of Consumer Protection.  “Part of the problem is it’s undetected and undetectable.”

Authorities advise parents to:

-- Make sure you have antivirus software installed on your home computer.
-- Tell your children never to give out their Social Security number without your permission.
-- Check your children’s credit periodically, even when they are under age.

“Parents need to understand that there are measures they can take to safeguard their children’s identity,” said Vladeck.  ”Parents should think about protecting their children’s identity, and the Social Security number is absolutely the foundation there.”

Copyright 2012 ABC News Radio


Tax Return Theft: How to Safeguard Your Refund

iStockphoto/Thinkstock(NEW YORK) -- It is a day dreaded by most Americans, the day taxes are due, but for hundreds of thousands of taxpayers it’s just the beginning of a nightmare where they discover Social Security numbers have been stolen and fake returns filed in their name.

Tax-related identity theft is an exploding problem. The Internal Revenue Service paid out $1.4 billion in fraudulent tax refunds last year to identity thieves who filed false returns, six times more than in 2010.

Experts say the fraud is attractive to scam artists because people are unaware they have been scammed until their tax return is rejected.

The fraud is perpetrated in three ways:

  1. A crook files a tax return using your name and Social Security number before you file your own.
  2. A crook uses your Social Security number when hired for a job and the income from that job shows up as yours.
  3. A crook steals the Social Security number of a child or elderly dependent of yours and claims them.

In order to minimize the likelihood of becoming a victim of identity theft the IRS has these recommendations:

  • Don’t carry your Social Security card or any document with your Social Security number on it.
  • Don’t give a business your Social Security number just because they ask for it. Only give it when it is required.
  • Check your credit report every 12 months.
  • Secure personal information in your home and on your computer.
  • Don’t give personal information over the phone or the Internet unless you initiated the contact or are sure you know who you are dealing with.

If you believe you are a victim of tax-related identity theft, here’s what you should do:

  • File a report with the Federal Trade Commission’s Identity Theft database.
  • Call the FTC’s hotline for individual ID theft counseling: 1-877-ID-THEFT
  • Place fraud alerts on your credit reports at, and
  • Contact the IRS Identity Protection Specialized Unit, toll-free at 800-908-4490.
  • Visit the IRS Taxpayer Advocate Service, which has a helpful toolkit, here.
  • Fill out the IRS Identity Theft Affidavit, Form 14039.

Copyright 2012 ABC News Radio


Identity Thieves 'Make It Rain' Cash with Fraudulent Tax Refunds

Justin Sullivan/Getty Images(WASHINGTON) -- Police in Tampa, Fla. knew something was up when they noticed many of their biggest drug dealers were no longer on the streets. When one of the drug dealers was pulled over in a traffic stop, instead of finding drugs in the car police found large numbers of pre-paid debit cards and ledgers with social security numbers.

Identity theft involving tax fraud is increasing faster than law enforcement and government officials can deal with it, according to testimony Friday before a House Oversight subcommittee. Identity theft to scam fraudulent tax refunds from the government has increased 100 percent in just three years.

"As of August 31 of this year, IRS incident tracking reports indicated that the numbers of taxpayers affected by identity theft has more than doubled since 2008 to over 580,000 taxpayers this year alone,” said J. Russell George, Treasury Department Inspector General for Tax Administration.

The crime has become too easy. It’s like a party, according to Rep. Richard Nugent, R-Fla., whose district has a problem with tax related identity theft. “Tampa police department has busted what the lawbreakers call ‘Make it Rain’ parties, where criminals get together in a hotel room with internet access and file fake return after fake return,” Nugent told the committee.

Chances of getting caught and punished are low because each fraud case amounts to an average of $3,400, often too little to merit prosecution. To make putting the criminals behind bars even more difficult, the IRS is limited by law in sharing information from a taxpayers return with local law enforcement authorities.

Officials say once someone gets hold of a name, social security and date of birth, they have enough information to go on line, file a fraudulent tax return, and seek a tax credit.

"In 2010 IRS paid over $12 million to people who were listed as deceased,” said Rep. Todd Platts, R-Pa., the chairman of the subcommittee on Government Organization. “Service members who were killed in action defending this great nation are often targets of identity thieves who often use their information to steal tax returns from their families,” Platts added.

Making matters even worse, Platts said, “In 2010 IRS issued 4.2 billion in tax credits to individuals who were unauthorized to work in the United States.”

For the victims of tax fraud identity theft, the people who had fraudulent tax returns filed in their names, getting the problem fixed and their lawful refund paid could take a year-and-a-half. “A typical path for an identity theft refund case that is not complex may take as long as 18 months to resolve,” George told the subcommittee.

Democratic leader Rep. Edolphus Towns, of New York, felt it was too long to wait. “It is unacceptable to have innocent taxpayers waiting 12 to 18 months to verify their identity before a replacement refund check is issued,” he said. “We can and should do better.”

At the hearing, government officials vowed to do more to reduce identity theft tax fraud even though their budgets and staffs are likely to be cut to save money.

Copyright 2011 ABC News Radio


Former Beauty Queen Scammed Thousands, Says FTC

Photodisc/Thinkstock(WASHINGTON) -- A former beauty queen was part of an operation that allegedly duped half a million people into spending almost $30 million in a pair of fraudulent schemes, according to the Federal Trade Commission.

One scam lured people to pay for help in getting free government grants and another involved misleading claims about weight loss supplements, the FTC claims in a complaint.

Juliette Kimoto, 2006 Mrs. Nevada, owned four companies that offered a “bogus government grants service” and dietary supplements that made false claims about endorsements by Oprah Winfrey and scientific research, the FTC said this week. The FTC reached a settlement with Kimoto and another individual involved in the scheme. The settlement was first reported by Daily Finance.

Kimoto seemed to have a picture-perfect life. A mother of six, she had married her high school sweetheart who was named “Husband of the Year” in the same pageant where she won her title. She said she was actively involved in her Mormon church, according to the Las Vegas Sun.

Her husband, Kyle Kimoto, is serving a federal prison sentence of 29 years, ordered by an Illinois federal judge in September 2008. His telemarketing scam, which is separate from the FTC’s claims about his wife, made over 12 million phone calls to consumers with weak credit histories to sign up for a bogus credit card. Authorities said he victimized over 300,000 people out of $43 million. He was ordered to pay restitution of about $35 million. The FTC said litigation is continuing against him.

His wife hatched her separate scheme while he was undergoing his criminal trial, according to the FTC.

According to memos from the FTC, consumer injury exceeded $29.7 million. The credit line scam impacted over 500,000 consumers and the grant scam victimized over 50,000 people.

As part of a settlement with the FTC, Juliette Kimoto is banned from selling grant-related products or services, credit-related products, or work-at-home business opportunities, and taking consumer payments by pre-authorized electronic funds transfer, among other activities.

The FTC is also banning Kimoto’s companies from making “misleading health claims” related to dietary supplements. She is also required to pay more than $90,000 and to turn over various personal assets worth over $220,000. Those assets include “jewelry, a piano, and a 1967 Chevy Camaro, along with all the cash and other assets” owned by her companies.

Copyright 2011 ABC News Radio


100+ Arrested in NYC Identity Theft Ring

iStockPhoto/Thinkstock(NEW YORK) -- Thousands of unsuspecting Americans were victimized by an identity theft ring based out of New York City that resulted in millions of dollars in losses – and a number of arrests, announced Friday.

Authorities are calling it not only the largest, but the most sophisticated identity theft and credit card fraud case ever. The thieves employed bank tellers, store clerks and restaurant waiters to skim customers' personal information, used it to create fake credit cards and then sent crews on nationwide shopping sprees to buy high-end goods -- later sold online, or overseas.

The scams were based out of New York, but had ties to three other continents.  Most of the defendants are in custody but a couple dozen remain at-large. More than 100 people have been charged following a two-year investigation.

Copyright 2011 ABC News Radio


LAPD Warns Job Seekers About Identity Theft

Digital Vision/Thinkstock(LOS ANGELES) -- The Los Angeles Police Department is investigating an employment scam that could lead to identity theft, and warns that the unemployed should be more cautious when applying for jobs online.  

The LAPD says victims are applying for jobs they find online and are told they need to pay an upfront fee for a background check. Job seekers are also asked to provide personal information like driver's license info and Social Security numbers.  

L.A. police say you should never pay fees to apply for a job and never give personal data to a possible employer online whom you've never met.

Copyright 2011 ABC News Radio

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