Fraud Investigator Insights

“Fraud – The Many Faces of Fraud

Merriam-Webster defines fraud as “an act of deceiving or misrepresenting.” Fraudsters “deceive” businesses and government institutions by “misrepresenting” themselves as someone else, using illegally obtained personally identifiable information (PII) of others to establish credit, obtain medical services, secure employment, receive government benefits, and more.

During International Fraud Awareness Week (November 12-18), we’re taking a look at the three most common types of fraud our Investigators saw among identity theft victims in 2016: new account, utilities, and check fraud, in order to help members understand what these types of fraud are, how they happen, and how to recognize the signs.

New Account Fraud

Our Investigators worked 1,776 new account fraud cases last year. “New account” is a broad category but most instances involve new credit accounts, such as a credit card or car loan.

One of the first signs that someone is trying to use your personal information to secure new credit is a “denial of credit” letter for an account for which you did not apply. Under the Equal Credit Opportunity Act (ECOA) Regulation B, creditors must provide notice if a credit application is declined. If a fraudster is using a victim’s actual name and address on a credit application, there will be incomplete or inaccurate information that cannot be verified, so the prospective creditor sends the notice to the name and address on the application. Don’t ignore such a letter thinking it is a mistake or because credit was denied that no harm has been done; someone has your PII and is using it to try and obtain credit. Just because credit was denied once does not mean it will be denied by the next credit or they are attempting to defraud.

Hard inquiries or new unauthorized accounts on your credit report are more obvious signs that someone is fraudulently using your PII. These may not show up right away, which is why your IDShield membership includes internet monitoring of your PII, along with alerts if suspicious activity is suspected.

Other signs that you may be a victim of new account fraud include:

  • A bill or statement for an account you don’t recognize.
  • A collection call or letter for an account that is not yours.
  • A change of address verification. Fraudsters may submit a change of address notice to the USPS so that any new credit account statements will be re-routed, enabling them to use any unauthorized account for a longer period of time without being detected.

Utilities Fraud

The lights are on but you’re not home? Maybe that’s because the lights are not at your home address. Utilities fraud occurs when someone uses your name or other PII to obtain water, gas, cable or phone services, including mobile accounts. Most utilities companies require a Social Security number, along with a deposit, to secure services. Many do not make a typical inquiry with the three credit reporting bureaus; however, they may request a data report from the National Consumer Telecom and Utilities Exchange NCTUE) to learn about the applicant’s payment and utilities account history. Consumers may request an NCTUE Disclosure Report to review the information that utilities companies will see in their data report. Most consumers learn they are a victim of utilities fraud when they receive a collection call or letter from a utility company they do not use. A copy of a utility bill from their actual company during the time the fraud occurred helps victims prove the account is not authorized.

Phone or utilities fraud was the third most common form of identity theft nationwide last year, according to the Consumer Sentinel Network Data Book, published by the Federal Trade Commission. It was the second most common case type resolved by our Investigators.

Check Fraud

Payments made by check may be declining but check fraud has not gone away. There are a number of ways check fraud can occur:

  • Lost or stolen checkbook.
  • Checks stolen from outgoing mail and fraudulently cashed.
  • Any individual or business you’ve written a check to has your account number; that along with your bank routing number can be printed on blank check stock available at office supply stores.

The amount of information you have printed on your checks should be limited to information that is already publicly available: your name and physical address. Do not include your driver’s license or Social Security number.

Our Investigators advise that you should review your checking account activity frequently; this includes checks as well as ACH debits. Doing this can help you catch check fraud right away; otherwise, your first indication may be a collection call or letter.

Consumers can request a free copy of their consumer report from check authorization and verification services: Certegy, ChexSystems, and TeleCheck.

Don’t Fight Fraud Alone

It’s hard to estimate how much fraud costs U.S. businesses and organizations. In its 2017 True Cost of Fraud Report, LexisNexis estimates that every one dollar of fraud lost by merchants, financial services companies and lenders lose, costs $2.66 in revenue.

While fraud victims may not see a direct dollar loss, in the end we all pay the price. That’s why it’s important to remain vigilant about protecting your personal information, reviewing credit reports and monitoring activity on existing accounts. Fraudsters look for the easy way to get a quick illegal return, so if it’s too hard to obtain and use your information, they are more likely to move on to another target.

If you are a victim of fraud, you are generally not responsible for outstanding balances on any unauthorized account. But you can’t just ignore the collection notice; you must dispute the claims and have them removed from your credit report. If you detect suspicious activity that may indicate you are a victim of any type of fraud, your ID Shield membership has you covered.

Your case will be assigned to an Investigator who will help you to look beyond your initial concern to detect any other possible issues. Then he or she will take over your case, working to resolve it until all fraudulent information is cleared and your identity is restored to pre-event status.” ~copied from ID Shield Newsletter.

For more information about ID Shield please call me, Jim, at 503-387-9497




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