Identity Theft in the News - Financial Industry

Identity Theft knows no bounds. All businesses, big and small, are vulnerable to this complex and rising crime. Any business or organization that gathers any personal information or account numbers are at risk. Although businesses have several choices to dispose of confidential information, on-site shredding is, and always will be, the most prudent and convenient method available. Following are some examples of information handling gone wrong.

Financial

From geek to gangster

Source: Online. http://www.cbs.com. 5 October 1999

CBS News -- Mark Frank, a Boeing engineer, lived a pretty buttoned-down life until last November, when his very orderly existence began to come undone. He received a phone call from his wife informing him that their account had been wiped out. Someone had taken all their money.

Not only had his money been stolen, but his very identity as well. Denver police called Frank to tell him someone had been writing checks in his name. “He’s got your name, address, account numbers,” said the detective.

Richard Darrow was an identity theft expert with an MBA and a little computer savvy. He turned himself from a geek to a gangster and turned Frank’s life upside down. He knew where Frank worked, how much he made, his money market account numbers, savings account numbers, checking account numbers — anything needed to defraud a man, Darrow says. “His information became available to me, I believe, when I was digging around in a Dumpster behind a mortgage company,” says Darrow. “The proficiency with which I could do it was frightening, even to me.”

Needing to fund a drug habit, Darrow used a phony computer-generated driver’s license as identification to cash payroll checks he had also created on the computer. He bought merchandise with bogus personal checks. “On a good day, I could make $5,000 in cash and another $7,000 to $8,000 in merchandise,” says Darrow. He assumed the identity of no fewer than 75 people, including Frank.

Violent crime is down across the country, as criminals have turned to scams like identity theft that are a lot less dangerous and far more lucrative. Denver ’s district attorney, Bill Ritter, now treats identity theft not as a nickel-and-dime forgery, but as an organized crime, subject to racketeering laws. Darrow is currently serving time in Colorado and is cooperating with authorities, hoping to avoid a possible 48-year sentence for crimes he says were remarkably easy to pull off.

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Document dumping

Source: 11/20/01 Fox 13 Investigates

It’s your personal and most private information — your financial statements, your social security number, your credit report. And you work hard to protect it. You trust your bank, your lawyer and your investment institution to safeguard it.

When a whistleblower told us some employees at a Regions Bank in Tampa were tossing that type of personal information into the garbage, we immediately went to work. We waited for the trash to be collected and then dumped.

We picked through it, piece by piece scanning for private information. “Here’s the account number,” says Investigative Reporter Glen Selig, as he digs through it. “Here’s the person who holds the annuity and we have the prior address and current address.”

We also found somebody’s stock trading account, including holdings and account numbers. Also in the trash were social security numbers and credit summaries. W-2 payroll information, financial account summaries, a home address, date of birth -- all belonging to the same person. Almost an entire file on a woman, who also happens to be a Hillsborough County Sheriff’s deputy, more than enough information for a bad guy to steal her identity and ruin her credit. She says she sees cases of Identity Theft all the time. Now, she’s worried.

Sandra Broady, who represents the Association of Records Managers and Administrators, says it is the financial institution’s responsibility to safeguard that data. Not only is it their responsibility, but it is the law. According to §655.059 of Florida Law, “… the books and records of a financial institution are confidential…. A person who willfully violates the provisions of this section … is guilty of a felony of the third degree….”

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Dumpster Diving is legal!

Source: Online http://marketplace.newsnet5.com. 28 March 00

When Cleveland ’s NewsChannel5 reported, Chris Hernandez, went on a special assignment on Dumpster Diving, he was amazed at the amount of personal information available to the public. Digging through trash from a bank and mortgage company, Hernandez found a torn up mortgage application filled with private information on Ernie Allessio — his name, Social Security number, home phone number, and annual salary, among other personal information.

He had given the information to the bank when borrowing money for a new home. The application also revealed his wife’s Social Security number and the account number to every credit card he owns.

Security experts say when banks and other businesses don’t follow the right procedures, it’s as easy as if you just gave the bad guys a file full of your personal information. Avery Friedman, a consumer rights attorney, says federal laws require banks to safeguard your privacy. “As you know, it only takes one time for information to get in the hands of the wrong person. Keep in mind, Identity Theft is a booming business.”

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Confidential material found in bank’s Dumpster

Source: Associated Press

Paul Andrews just had to see for himself, so he went rummaging through the waist-high trash bin behind a NationsBank branch. There, among the garbage bags and old manuals, were several thousand customer records.

The documents contained sensitive information ranging from customer’s names and addresses, to their bank accounts and Social Security numbers. A NationsBank executive, confessing his chagrin, said the records were disposed of improperly.

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“Dumpster Divers” defraud banks

Source: The Kentucky Post

Three Californians conspired to defraud Northern Kentucky branches of Star Bank and PNC Bank of more than $163,000. They pulled account information from the trash and used it to obtain driver’s licenses, Social Security cards, and other identification. Armed with that identification, they posed as various customers and looted accounts.

Paul W. Lucia withdrew $9,500 from a Star Bank account in Elsmere and cashed $143,000 in certificates of deposit at the bank’s Crescent Springs branch. Then he tried to defraud the PNC bank in Ft. Mitchell of $9,800, but was unsuccessful.

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Former trash collector gets ten years

Source: Mobile Register, 2/9/00

Former BFI Waste-hauling employee Decosta Leroy Jackson was sentenced to 10 years in prison Tuesday in Mobile County Circuit Court, stemming from a scam last year in which he rifled through discarded banking records and used them on a personal shopping spree. He was supposed to destroy or recycle private banking records of area bank customers in his job with BFI.

Instead, prosecutors said, he used credit card and checking account numbers from the records to buy airline tickets, television sets and other items. Jackson searched through private business records of customers of area financial institutions, including Regions Bank and AmSouth Bank.

His then-employer, BFI, apparently had contracted with the businesses to destroy or recycle the records. One of the victims sustained nearly $52,000 in losses as a result of Jackson ’s crimes.

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Trust lost with trash

Source: Toronto Sun

Client confidentiality went out with the trash at Montreal Trust’s downtown headquarters. Several thousand pages of account names, numbers, and balances were found blowing through downtown streets.

The breach of bank security had customers fuming. Clients’ information should not be released, whether it’s inadvertent or otherwise.

State Farm Insurance, Lac Minerals, Eatons, at least eight government ministries, and dozens of mutual fund companies, some with balances running into the millions of dollars, were among the corporate clients whose security was compromised. Out-numbering the corporate clients were thousands of personal accounts. Many threatened to close their accounts.

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