The Identity Thief's Identity Can be Amazing

Identity theft can affect anyone and sometimes it's surprising, who the culprits turn out to be.

For instance, a man was recently arrested in San Francisco and charged with 53 counts of fraud and forgery. For months, he had been "hanging out" in Nob Hill hotels, which is where the rich and famous stay in the "City." When the authorities searched his room they found 500 names and credit card numbers, including those of Congresswoman Nancy Pelosi and a spokeperson for the FBI.

Maybe Ms. Pelosi will have a more personal perspective when she reviews federal legislation designed to protect people from these crimes. Many are saying that the legislation being proposed isn't "victim friendly."

The major complaint against this legislation is that it allows the entity compromised too much sway in determining when potential victims need to be warned and will nullify State laws requiring disclosure.

Not sure where our "Nob Hill Bandit" got the idea to use a iPod to store stolen data, but the scenario was recently used in the Harrison Ford movie "Firewall." In the movie, Harrison deftly steals a large amount of data from his bank, using a iPod to store the information. Of course (in the movie) he does it because kidnappers are holding his family and saves the day (including the stolen data) by the end of the movie.

Here is the the full story on the "Nob Hill Bandit" by United Press International.

Another story, which caught my eye this morning, especially with all the IRS phishing scams going on is where a IRS worker committed identity theft.

The Associated Press is reporting that a IRS worker in Dallas is being charged with 12 counts of fraud for using a social security number to obtain credits cards fraudulently.

Of course, the reporter was unable to reach the IRS worker's attorney for comment and the prosecutor will not comment where the defendant stole the information.

Here is the full story on the IRS employee.

IRS Moves to Tighten Up Disclosures that Allow Tax Preparers to Sell Your Personal Information

I've often commented that marketing is the root cause of identity theft. For years, our information has been "gathered and sold" AND a lot of the "gatherers" have done a lousy job of protecting it.

After all, we seem to read about this data being compromised every week.

Lately, we've all read about the IRS phishing attacks and how to protect ourselves. But did you know that by signing releases when you have someone do your taxes authorizes your preparer to sell your information?

Some might argue that this puts your information at as much risk as clicking on one of those "phishy" e-mails circulating around the internet. Especially when data is being breached at record rates by criminals, who normally use it to commit financial crimes in your name.

Here is an interesting analysis from USA Today:

Now, the IRS wants to change the rules, and at a hearing today in Washington, the agency is bound to get an earful. Consumer advocates have criticized the IRS for what they see as plans to loosen the rules. Major tax preparers have blasted the agency for adding what they regard as needless confusion.

Actually, the IRS is on the right track. The proposed rules would make consent more specific and clearer to taxpayers. They'd require a "warning" to consumers that once returns are disclosed, the preparer "has no control over" what third parties do with it.

That warning is a needed eye-opener for consumers, who now may give away their privacy simply by failing to read fine print:

• Disclosures are a boon to tax preparers and businesses working with them, not the taxpayer. Why should taxpayers share highly personal data to assist marketing?

• Preparers often pitch "refund anticipation loans," which allow taxpayers expecting a refund to get their money within two days. That bit of convenience comes at a high cost. A report last April by the Brookings Institution found common fees of $130 for loans that sometimes last less than two weeks. On an annualized basis, the interest can exceed 200%. The loans, Brookings found, take a significant chunk of low-income taxpayers' refund dollars - an estimated $740 million in 2003.

• In this digital age, hardly a month goes by without news of some company losing credit card or other personal data through a security breach. Disclosing tax information opens the possibility that return data could be mishandled as well.

To sum it up USA Today commented:

Better yet, if Congress has any interest in protecting its constituents rather than its campaign contributors, it might want to require that preparers stick to doing taxes, instead of turning tax time into a bazaar for selling other financial products.

Here is the full story by USA Today:

For sale: Your 1040 (USATODAY.com)

In case anyone is interested in how many data breaches have occurred in the past couple of years, here is a pretty eye-opening chronology from the Privacy Rights Clearinghouse.

Of course, my personal advice is to "Just Say No," when your tax preparer asks you to sign your "identity" away.

If We Can't Trust Giving to the Red Cross, Who Can We Trust?

Most major organizations face a growing problem, or the fact that many of their fraud losses come from within. You would think that the Red Cross would be immune to this, but apparently not.

It seems that although disasters bring out the best in people, it also brought out some of the worst behavior imaginable.

Hurricane Katrina illustrates this. It almost seems that more money was distributed to fraudsters than to the people, who were victims. No one was immune from the Government to the Red Cross.

I recently blogged about "Who Really Profited in the Hurricane Disasters" in reference to massive amounts of money that was lost due to fraud and waste in the government effort to provide relief.

Now the Red Cross is under fire and has turned the case over to the FBI. Here is a story from the AP, courtesy of Forbes:

"The FBI is looking into allegations of theft and other wrongdoing by American Red Cross volunteers who distributed relief supplies after Hurricane Katrina. A task force probe - which includes state, local and federal authorities - began after the Red Cross conducted its own investigation and turned over information to authorities, said Jim Bernazzani, the agent in charge of the FBI's New Orleans office."

Full story, here.

My sad prediction is that in future disasters, I would imagine the public is going to be less likely to help. Perhaps (in the end) only aggressive prosecution of the guilty will bring the people's confidence back. A little diligence within some of these organizations to prevent misdeeds from their own would help, also.

It would only be justice for those, who committed fraud when people's lives were at stake.

Here are some previous posts, I've done on the hurricane disasters:

Fraud Related to FEMA

FBI Reports Fraudulent Activity on Internet Related to Hurricane ...

Katrina Fraud Far and Wide