What Will the Scammers Think of Next?
Here's one for the books. Don't be a victim!
Sept. 29. 2005: Vol. 1, No. 35
IN THE NEWS
Self-proclaimed identity thieves have a message for you: Personal information is frighteningly easy to get.
"Stealing your ID can be as easy as ABC"
The Boston Globe, Sept. 25, 2005
We live in a service-driven society. And the jet fuel of service is information.
Over the past year, private business and the government have shown themselves to be cruelly negligent about safeguarding personal data.
In 2004, the Federal Trade Commission recorded 388,000 ID-theft complaints, a 19 percent increase over the year before.
The average out-of-pocket cost to individuals is $500.
To paraphrase the MasterCard commercial, the cost of months of credit denial, anger and anguish: priceless.
In his Boston Globe story about ID theft, Joe Light describes a chilling interview with an 18-year-old identity thief in Russia whose business is creating highly personal dossiers about individuals. All this information is floating around the Internet unprotected and available--if you know where to go.
The Russian thief gave the writer some names of people whose dossiers he had ssembled. Joe Light called one of them and writes:
I had just called her on an unlisted cellphone number and informed her that I had her Social Security number, Visa card number, bank account and personal identification numbers, and eBay account name and password.
If I chose, not only could I drain her bank account and rack up charges on the Visa, but with her Social Security number, I could probably open new credit cards--maybe even a mortgage--long before she discovered a problem. Ultimately, she would likely not be responsible for the charges, but it might take days--or months--to rectify her credit.
The point is that Joe Light's saga directly relates to yet another horrifying Internet/telephone scam I'll reveal at the end of this story.
In 1961, just out of the Army and working in my second job in book publishing at $90 a week, I found myself on a federal grand jury. Usually grand juries are made up of older people with many years' experience on petit (trial) juries. This special grand jury was empanelled to serve every business day for a solid month from 10:00 a.m. to 1:00 p.m.
When I tried to get out of it by saying I was a young guy on my first job, Judge Dudley Bonsal called me up to the bench. A disarming, utterly charming guy, Bonsal had red hair and freckles that contrasted against his severe black robe. He surveyed me up and down, and then looked me in the eye and said in a very quiet voice, "But you are just the kind of fella we need for this kind of jury. Won't you please say yes?"
What's a boy to do?
It turned out this jury was a big deal. We got our pep talk from a young U.S. attorney named Robert Morgenthau, who has made big news lately, as he is about to be reelected after more than 30 years as New York district attorney at age 85 (sic!).
It turned out that $1 million worth of negotiable financial instruments had been stolen from the safe of Wall Street firm Bache & Co., and were being fenced all over the country.
For one solid month, the 23 ladies and gentlemen of the special grand jury sat riveted as the kingpins of every major crime family in New York were paraded before us--Gambino, Luchese and Traina, to name three.
As a 26-year-old kid, I had vaguely heard about the Mob. But that was eight years before Mario Puzo's "The Godfather" was published. None of us knew what "omerta" (the vow of silence), "Capo di tutti capi" (big boss), "The Commission" (ruling body), "family," and all the other jargon that we have all come to know and love, meant.
I remember one of the witnesses was the meanest man I had ever seen, causing us all to shrink down in our leather chairs. He made Humphrey Bogart as Duke Mantee and Edward G. Robinson as Johny Rocco seem like Lawrence Welk.
Another witness, a third-generation family member, was rail thin, elegantly dressed in a custom tailored blue suit, shirt and muted tie with gold cuff links and a gold watch. This was the new breed of businessman Mafioso--the Robert Duvall character in the film version of The Godfather.
When he was excused, the young U.S. attorney asked if any of us noticed the ring on the witness's right hand. We all shook our heads.
"West Point," he said quietly.
I was irked. We had paid for this bastard's education, and now he was cleaning our clocks.
Not that we learned much from them beyond their constitutional right not to incriminate themselves. They all took the Fifth.
Other witnesses, plus the circumstantial evidence, were overwhelming, and we ultimately voted a true bill (indictment).
That was my first firsthand look into the world of crime.
At that time--pre-Internet--honest folks came into contact with crime in three ways: either your home or car was broken into, you were mugged on the street, or you witnessed a shooting or some other act of violence.
Today we are witnesses to--and very often victims of--crime every day. We need look no farther than our computer screen.
Who among us has not had messages from phishers, pharmers, hackers and spoofers? For example, the Anti-Phishing Working Group (www.antiphishing.org) recorded the following reports of phishing scams from October 2005 to July 2005:
October 2004: 6,957
November 2004: 8,975
December 2004: 8,829
January 2005: 12,845
Feburary 2005: 13,468
March 2005: 12,883
April 2005: 14,411
May 2005: 14,987
June 2005: 15,050
The Telemarketing Equivalent of Phishing
What follows is an e-mail received by Peggy that is being forwarded around the country.
This was sent to me and I am passing it along.
This message is from my friend who was notified by their friend who works for the Davis Police Department:
Hi! I just thought I'd pass along this information given to me by our dispatch supervisor.
Take care--and be careful!
WARNING...New Credit Card Scam.
Note, the callers do not ask for your card number; they already have it.
This information is worth reading. By understanding how the Visa and MasterCard telephone credit card scam works, you'll be better prepared to protect yourself.
One of our employees was called on Wednesday by Visa, and I was called on Thursday by MasterCard.
The scam works like this:
The person calling says, "This is [Name], and I'm calling from the Security and Fraud Department at Visa. My badge number is 12460. Your card has been flagged for an unusual purchase pattern, and I'm calling to verify. This would be on your Visa card which was issued by [Name of bank]. Did you purchase an anti-telemarketing device for $497.99 from a marketing company based in Arizona?"
When you say, "No," the caller continues, "Then we will be issuing a credit to your account. This is a company we have been watching, and the charges range from $297 to $497, just under the $500 purchase pattern that flags most cards. Before your next statement, the credit will be sent to you at [your address], is that correct?"
You say, "Yes."
The caller continues: "I will be starting a fraud investigation. If you have any questions, you should call the 1-800 number listed on the back of your card [1-800-VISA] and ask for security. You will need to refer to this control number."
The caller then gives you a six-digit number. "Do you need me to read it again?"
Here's the IMPORTANT part on how the scam works.
The caller then says, "I need to verify you are in possession of your card."
He'll ask you to "turn your card over and look for some numbers."
There are seven numbers; the first four are part of your card number. The next three are the security numbers that verify you are the possessor of the card. These are the numbers you sometimes use to make Internet purchases to prove you have the card.
The caller will ask you to read the three numbers to him. After you tell the caller the three numbers, he'll say, "That is correct. I just needed to verify that the card has not been lost or stolen, and that you still have your card. Do you have any other questions?"
After you say "No," the caller then thanks you and says, "Don't hesitate to call back if you do," and hangs up.
You actually say very little, and the person never asks for or tells you the card number. But after we were called on Wednesday, we called back within 20 minutes to ask a question. Are we glad we did! The REAL Visa security department told us it was a scam and in the last 15 minutes a new purchase of $497.99 was charged to our card.
Long story made short--we made a real fraud report and closed the Visa account. Visa is reissuing us a new number. What the scammers want is the three-digit card ID number on the back of the card.
Don't reveal this number to anyone. Instead, tell the caller that you will call Visa or Master card directly for verification of their conversation. The real Visa told us that they will never ask for anything on the card as they already know the information since they issued the card! If you give the scammers your three-digit ID number, you think you're receiving a credit.
However, by the time you get your statement, you'll see charges for purchases you didn't make, and by then it's almost to late and/or more difficult to actually file a fraud report.
What makes this more remarkable is that on Thursday, I got a call from a "Jason Richardson of MasterCard" with a word-for-word repeat of the Visa scam. This time I didn't let him finish. I hung up!
We filed a police report, as instructed by Visa. The police said they are taking several of these reports daily! They also urged us to tell everybody we know that this scam is happening.
Please pass this on to all your family and friends. By informing each other, we protect each other.
Takeaway Points to Consider
- Scams like this one engender consumer distrust of direct marketers, who need to take credit card information to process orders. Your call centers should be prepared to acknowledge this discomfort and help assure customers their financial information is safe with your company.
- Help your customers avoid becoming victims of identity theft by educating them on how to identify felonious behavior. Post this content on your Web site, in your shipping materials, in your billing statements, etc.
- The Direct Marketing Association has prepared a list of guidelines consumers can follow to avoid falling prey to fraudulent marketing schemes. Visit http://www.dmaconsumers.org/minimizeyourrisk.html to learn more--and share this information with your customers, friends and family.
Letters to the Editor
These letters were written in response to "The Inevitable World War With China," which was published Sept. 20, 2005:
I enjoyed, I think, your thoughts a couple of columns back on China, the 800-pound gorilla that no one wants to talk about. As a kid, I saw the fear in the eyes of my parent sbrought on bythe Nazis (and in the eyes of the guys in the family who were going off to fight it). I studied communism in college (or as it was more intellectually defined in the classroom, dialectical materialism), and got it pounded into my head by the shoe of a rotund guy named Nikita Krushchev one day in New York. I have watched potentates and wannabe potentates try their version of shoe-pounding.
But nothing scares me more right now than China. Call it want you want, China Inc. is playing dirty and will continue to do so ... big time ... as long as they can get away with it. And they are doing it not with the fastest fighter planes, huge land forces or smarter smart bombs (all of which they probably have). They are doing it ever so subtly and softly with low wages and stealing technical intelligence. They have sucked just about every manufacturing job out of the United States. They have lulled the biggest and supposedly the sharpest U.S. corporations into thinking that they can be partners.Whatever happened to our nationalism, yes, our nationalism? Our trade secrets? Our defense secrets? Our leadership (now slipping) in developing technical innovations? As long as the Boeings, the Unocals and the Microsofts fall all over themselves wooing Chinese business, it will not become the business of Congress; they will say it's about making money, more money for those already filthy rich, and for all the large and small investors.
I ain't got nothin against making money. But please, when it becomes downright embarassing... Denny, I'd like to see more from you on China. China Inc. China the Terrible and Repressive as it applies to AMERICAN BUSINESS. And if you don't want to pluck this string all the time in your column, just give us the references you come across in your daily reading to go to so we, your faithful readers, can do it for ourselves.
Yes, I know "the times, they are a-changin.'" And as you said in that column, "We must innovate our way out." Let's just not have our innovations stolen by China Inc. even before we can slap our logo on it.
Was the line, "I will never again wear a baseball cap not made in China" correct? Hey, it's okay to buy a baseball cap made in China. As long as they don't buy the New York Yankees in return!!!!!!
This letter was written in response to "Is Your Business Model Obsolescent?," which was published Sept. 27, 2005:
Interesting what you say about newspapers and who's reading them. In Canada, two large, national newspaper chains have started issuing free, short, snappy mini-tabloids aimed largely at young commuters. They've gone to great lengths to promote their freebies, which do not seem to be justified by the amount of advertising they carry. They are either desperate for any kind of readers, or are conducting very expensive research into how their news will be delivered in the future. Incidentally, I note that the only papers to enjoy readership growth are weeklies--which I recall were always deemed a good direct-response advertising buy.
--John Friesen, with Blue Giant Media
Web Site Related to Today Edition
Anti-Phishing Working Group