Identity Theft and Home Equity

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As if we don’t have enough to worry about, now we have to worry about people digging through our garbage.  The Identity Theft Assistance Center has a new report identifying people with large amounts of home equity are becoming increasing targets.  Home equity lines of credit is very appealing to these criminals because of the reserves.  Home owners need to be diligent and check their accounts on a regular basis to ensure no tampering has occurred.

The Federal Bureau of Investigation released their annual mortgage fraud report in April.  In the report, home equity mortgage credit fraud is cited as an “emerging scheme” in the battled real estate and mortgage markets.  Identity Theft criminals have long targeted people with poor credit.  This practice came about with the emergence of the “sub-prime” market.  If you are not familiar with the sub-prime market, it was basically a way for people who could not afford loans obtain loans.  It required very little identification which made it a prime target of identity thieves. 

Now that the lenders have seen the errors in their ways and tightened up their requirements, Identity theft thieves are looking for new avenues.  These new avenues require going after people with good credit.  Home equity loans are attractive because they are as easy to open up as a credit card account.  All they need is a little bit of financial information.  And where do they find it?  You got it…..right there in your garbage can.

How this usually goes down……. thieves will pose as home owners online and request home equity accounts.  After the account is opened,  they will send a fax to the bank requesting a wire transfer.  The bank unknowingly calls the crooks to verify the transfer.  And in a blink of an eye the money is out of the account.

We are seeing a lot more requests from home owners requesting to be set-up on a quarterly schedule.  We provide free security containers where you can drop your junk mail and all your other paper work to be picked up for on-site paper shredding.  This service starts as low as fifty dollars per visit.  People often overlook paper shredding and take an attitude of “it won’t happen to me”.  Mobile document shredding takes about ten minutes to set up and we work to your schedule.  Give us a call and see why we are the fastest growing paper shredding company in Houston.

Protecting Consumers’ Personal Data

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From the Texas Attorney General’s website…..

New Texas laws underscore the need for businesses to be extremely careful when handling and disposing of their customers’ personal information. Simply exposing the information to the risk of identity theft carries some hefty penalties, irrespective of whether the information ended in the wrong hands.

Some of the most common ways in which businesses mishandle sensitive information is by failing to shred receipts and other documents with customers’ personal data before throwing them into the trash. Several large companies which have improperly disposed of records with information such as credit card and Social Security numbers faced swift legal action by the Attorney General. Our investigators conduct routine spot-checks around the state as part of ongoing enforcement efforts. This office also investigates other types of neglect by businesses, such as improperly safeguarded databases or Web pages through which consumers submit personal information.

Penalties against businesses who violate Texas’ identity theft provisions are substantial. For example, New provisions of Chapter 35 of the Business and Commerce Code require businesses to develop retention and disposal procedures for their clients’ personal information. The law provides for fines of up to $500 for each record that could potentially land in the wrong hands. And the new Identity Theft Enforcement Act could mean fines of up to $50,000 for each similar violation – even for a single record. Additionally, businesses that give consumers specific reassurances about how their privacy will be protected could face penalties of up to $20,000 per violation if they fail to live up to those promises.

The reason for these strict new laws is clear: They help protect millions of Texans from becoming the next victims of identity theft. The laws also help safeguard the business community at large, which is facing mounting losses as a result of identity theft.

Identity theft is the fastest growing crime in the country. According to federal statistics, more than 20,000 Texas families file identity theft complaints each year – and that number simply reflects those who are aware they are victims. For many consumers, it takes months or even years to discover they have been victimized, and by that point the harm against them is substantial. Nationally, it is believed that identity theft drains at least $50 billion from our economy – most of it attributed to losses businesses must absorb when identity thieves run up huge lines of credit and make other purchases under the name of their victims.

For consumers, becoming the victim of identity theft is an emotional nightmare. They often face countless hours filing police reports and communicating with merchants, credit card companies and credit bureaus to clear up their name. They must often defer important plans, such as purchasing a home or new car, and will find it exceedingly difficult to obtain lines of credit for months or even years.

Businesses are hit hard, too. With just a few pieces of a consumers’ personal information some criminals have been able to secure high-limit credit cards and even buy cars or homes under their victims’ names. Not only does this hurt the bottom line of the business community at large, but could ruin a small business if it extends large lines of credit to even a single identity thief.

Businesses understandably want to know what they can do to help prevent identity theft. Since a business’ size and the types of data it handles can vary widely, each business should carefully review its practices and put in place necessary measures that will prevent clients’ personal information from ending up in the wrong hands.

The following are some of the types of client information most susceptible to being mishandled or improperly discarded by businesses:

  • Credit and debit card numbers
  • Social Security numbers
  • Bank account information
  • Mother’s maiden names
  • Passwords
  • Dates of birth
  • Account numbers within the business (i.e. membership number)

This information commonly appears in the following paper documents and electronic files:

  • Receipts
  • Refund forms
  • Credit and employment applications
  • Bank statements
  • Checks / money orders
  • IRS-related documents
  • Personnel files
  • Medical records
  • Sweepstakes entry forms
  • Email / Hard copy correspondence
  • Disks, magnetic tape, and all other data storage devices
  • Discarded computers

It’s important to note that Texas law does not take the age of the documents or information in question into account. For example, even if a credit card slip improperly thrown into the trash shows the number of an expired card, the business could still be liable under the law. Some businesses sued by the Attorney General erroneously thought that by purging documents that were many years old there was no risk to consumers. But when those files were shown to reveal full Social Security numbers, which are assigned for the life, it is clear that even “old” files can create new harm. Likewise, expired credit cards are often reissued under the same number, but with a different expiration date that an identity thief can figure out quickly through trial and error.

Each business should develop a thorough list of all the types of information it handles, who handles it, where that information is maintained and how it is disposed of when it is no longer needed. There should be clear written protocols about how to properly handle that information and how to dispose of it, which could mean:

Shredding applicable paper documents Permanently deleting electronic files Properly destroying / wiping old computers and data storage devices

Businesses should be particularly careful when disposing of storage devices and old computers. Simply hitting the “delete” button seldom erases data from a disk or hard drive permanently – savvy identity thieves can easily retrieve that information. Businesses should rely on their internal computer experts or consult with an outside vendor to explain proper permanent deletion of electronic files. It might be necessary to ask the vendor to professionally “wipe” or remove and destroy a hard drive before getting rid of an old computer or server.

Similarly, businesses that obtain consumers’ personal information through Web sites, such as accepting credit cards to purchase goods and services, should be especially careful that those pages are properly safeguarded. Because of the constantly changing nature of the Internet and the tactics used by hackers, it’s a good idea for businesses to review and update security measures for their Web sites and internal systems on a regular basis.

Businesses should constantly remind their employees and new hires about proper handling of their customers’ personal information. For example:

Restaurant waitstaff should be instructed to keep their eyes on customers’ credit cards and related receipts at all times, and not let these linger on an unattended table or bar.

Employees working for businesses that send this type of data electronically to colleagues should be reminded to double-check recipient’s address before clicking “send” on an email, to make sure they are not unintentionally sending sensitive information to the wrong people.

The threat of identity theft should be particularly impressed upon employees who travel with laptops, ensuring that the computers and disks are secure at all times, and any theft or other suspected breach should be immediately reported to management.

All businesses handling hard copies with any information that could be useful to an identity thief should keep those discarded documents in a safe place and shred them before throwing them into a publically accessible dumpster.

If in doubt, shred it. It’s going into the trash anyway.

It is also a good idea to send periodic reminders to employees, such as through email, newsletters, and clearly displayed signs. For example, some businesses that faced legal action from the Attorney General for improper document disposal agreed to send protocol reminders to all employees by periodically including corresponding notes in their paychecks.

The scenarios through which consumers’ information could end up in the wrong hands are clearly limitless, and the above are simply some examples and common-sense suggestions. Each business should develop procedures according to their size and type of information handled, and update those protocols the moment they realize new ways in which their customer’s sensitive data could fall into the wrong hands. Employees should therefore be encouraged to immediately alert management whenever they come across a situation that could put this information at risk.

The Office of the Attorney General encourages all Texans, individual consumers and businesses alike, to contact us if they discover a business that is not taking proper care of their clients’ information by calling us at 1-800-252-8011.


A Scary Story About Document Destruction

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Don’t think you need to shred?

Read this story from one of our customers.

My mother was used to throwing our trash away in the trash cans outside our house, which then got tossed into the ubiquitous garbage dumpster on Monday morning when the trash man came. No one ever thought someone would actually go through the trash cans. It was a nice neighborhood. We weren’t throwing away anything special. And after all, why would she need to destroy anything before throwing it away? We had nothing to hide.

Okay, so maybe you were thinking about shredding your junk mail in 1996, but we weren’t. For it’s worth, I wasn’t even of legal drinking age at the time. Nor was I responsible for taking out the trash. But that’s not the point. The point is that someone went through our trash sometime in the summer of 1996, and wreaked havoc on my family’s credit and good name, not to mention finances.

Yes, it turns out whoever went through our trash was able to piece together enough information about our family to apply for a mortage, have their apartment heated and well-lit, get cable and internet, and go on quite the shopping sprees at both Macy’s and Nordstrom’s. This went on for a year. We didn’t find out until the fall of 1997 when a bill collector called. I answered the phone.

shredding.jpgMe: “Hello, Miller residence.”

Caller: “Yes, we’re looking to speak with Joanna Miller please regarding an important business matter.”

Me: “Sure, may I ask who’s calling please?”

Caller: “CR Solutions.”

Me: “Um, may I ask what this is regarding?”

Caller: “We need to speak with Joanna Miller please, is she available?”

My mother always told me to get a name and reason for the call before passing along any calls to her or anyone in the family, but it was clear this guy wasn’t going to budge. It sounded suspicious and I had a bad feeling in my stomach when I ran upstairs to let my mom know someone was on the line. When my mom came down to take the call, she seemed confused, and a tad bit concerned. The look on her face said “Who could this be?” as she picked up the receiver, and I sat there in the kitchen the entire time, curious to find out just who in the world this suspicious man was and why he was calling for my mother.

Mom: “A Macy’s card? Good lord, what?? I don’t have a Macy’s card. You must have the wrong number.”

Caller: “No, ma’am, we have the right number. And you now owe $2000.00 plus $686.00 in late fees and charges, due immediately.”

Mom: “There’s no way. I don’t have a Macy’s account. Who did you say is calling?”

According to my mom, the mysterious man on the other end of the line then confirmed her social security number, home address, prior address, and maiden name. I watched my mom’s face turn white and she hung up the phone with a dazed look of confusion on her face.

Needless to say, my family’s identity had been stolen. The thieves had managed to gather my mother and father’s social security numbers, along with our address and other key pieces of information about our family from our trash. And we never had a clue until the day we received the call from the collection agency.

My parents wised up, after a little investigation, a review of their credit report, a couple hundred hours, an attorney, and several thousand dollars. The thieves were eventually caught. My parents started using a shredder to destroy anything that contained personally identifiable information before throwing away.

Identity theft is one of the fastest growing crimes in America. Don’t become a victim. Check your credit report regularly, be careful with whom you share social security and account numbers, and shred ANY documents that contain personal info before tossing them into the trash. If you live in the Houston area, check out Shredding Houston, a Houston-based recycling service that comes to your residence or business and picks up your shredding, at your convenience, and destroys it securely. Find out how Shredding Houston can help protect your identity and good name by taking care of your shredding.

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