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What You Need to Know About the Equifax Data Breach

Posted By Kenyatta Turner, LegalShield Independent Associate, Friday, September 15, 2017

What you need to know about the Equifax Data Breach:

Equifax, Inc – a major credit bureau, announced on Thursday, 9/7/17, that a massive data breach was discovered in July, which may have exposed names, birth dates, Social Security numbers and addresses of approximately 143 million U.S. consumers. The current US population is approximately 326 million, so this data breach potentially affected 44% of Americans! In addition, a smaller amount of driver’s license numbers, credit card numbers and certain documents were obtained. The breach lasted from mid-May to July of 2017.

This is just the latest example of how, no matter how careful you are, there are forces beyond your control that can still lead to your personally identifiable information being exposed.

At IDShield, we know how stressful data breaches are, and we are here to help.  As a member, please know:

  • You have full access to our dedicated and experienced licensed private investigators to ask any questions and get help if you are worried that you are a victim of fraud.
  • You have proactive credit monitoring through Experian and will be alerted if there are any changes to their credit report.

If you are not a member of IDShield, there are still steps that you can take to provide an extra layer of security.

  • First, set up a fraud alert. This will reduce the chance of a fraudster opening a credit or loan account in your name. If you place the alert with one bureau, they will ensure its placed on the other bureaus as well. Fraud alerts last for 90 days, but can be renewed. You can search online for placing a fraud alert and select one of the main bureaus to set it up through. To sign up via Experian, use this link: https://www.experian.com/fraud/center.html. To sign up via TransUnion, use this link: https://www.transunion.com/fraud-victim-resource/place-fraud-alert.
  • Second, be diligent. Don't give out your personal information if it sounds fishy. IDShield members, if you're unsure, this is a great time to call your licensed private investigator for advice!
  • Third, change your passwords for online banking and other finance accounts. This will reduce the risk of your money or assets being moved fraudulently. As you change your password, use your IDShield Vault password manager to generate a new strong password!

And of course, if you don’t yet have IDShield, this is a great time to sign up for comprehensive identity protection and full service, white glove restoration. Visit www.idshield.com to learn more!

 

I'm here to help, so please do not hesitant to contact me!

Kenyatta Turner, LegalShield / IDShield Independent Associate, 602-367-1069

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Tags:  data breach  financial  financing  fradulent  fraud  hackers  identity protection  law  lawyer  Legal  legal advice  legal services  legalshield  lending  loans 

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America is Now Known as the Land of the Free and Home of the Hacked

Posted By Kenyatta Turner, LegalShield Independent Associate, Saturday, April 8, 2017

America is Now Known as the Land of the Free and Home of the Hacked

by David Coffey, Opinion Contributor - 3/31/17

 

Unfortunately, Americans are now familiar with identity theft, from having experienced it themselves or personally knowing a victim of this insidious crime.

The Consumer Sentinel Network, maintained by the Federal Trade Commission (FTC), tracks consumer fraud and identity theft complaints. Of the 3.1 million complaints received in 2015, 16 percent were related to identity theft, which represented an increase by more than 47 percent from 2014. In fact, identity theft is reported as America’s No. 7 fear — before economic collapse and right after biowarfare.

This is not at all the case in Europe. Except for the U.K., our neighbors across the Atlantic barely know about identity theft. There are a number of systemic reasons for this happier situation, and some of them should inspire our policymakers here in the U.S.

Identity theft starts with the misappropriation of a victim’s personal identifiers. I am sure that none of the readers of this article would ever write their home address or license plate number on their set of keys. Then, by the same logic, why would they be okay with having their identity’s safety rely on a single all-purpose identifier?

Just like an armored door is built with numerous reinforced key points, an identity should be protected via the combination of more than one identifier. This is common sense. Unfortunately, this is not how our system works — and the culprit is our social security numbers (SSNs).

SSNs were created in 1936 to keep track of the earnings history of U.S. workers for Social Security benefit computation purposes. Their purpose was limited. Today, SSNs have become the national identifier used by both the government and the private sector as a way to identify and gather information about an individual’s financial life.

Efforts have been undertaken to curb this expansion, from legislation such as the prohibition of displaying the SSN on driver's licenses or motor vehicle registrations, to recommendations including the President's Identity Theft Task Force asking that federal agencies reduce the unnecessary use of SSNs, which they called “the most valuable commodity for an identity thief,” and the FTC’s plea to private entities to find better ways to authenticate identities.

Despite these efforts, SSNs still reign unchallenged. An identity thief only needs to get his or her hands on the 9-digit number, which is registered in many places, to steal a person’s identity and wreak havoc in their lives, from opening fraudulent credit card accounts to filing fake tax returns and more. But in Europe, social security numbers are used for retirement benefits only. An identity thief would need a person’s national ID number, which appears in very few places, and banks often additionally require a copy of a passport or identity card to prove an identity.

Once the fraudster has gone to the trouble of acquiring these precious personal identifiers, he’ll want to make money off it. And what better way than to gain access to the victim’s bank account? In America, where the use of credit cards is largely accepted, the damage an identity thief can cause is immense, because it is not limited to the amount of money present is the victim’s bank account when the theft occurs. A huge sum of credit card debt can be amassed by a thief on a shopping spree.

Meanwhile, the majority of Europeans use debit cards, which limits the losses one would endure. What’s more, the United States is one of the last countries to still use magnetic strips which are easy to replicate and therefore more liable to identity theft. European countries use a system called EMV, which adds a security layer in the form of a PIN to credit card purchases.

Part of the shift to cards embedded with an electronic chip to greatly boost security, the PIN system was introduced in the U.S. starting in 2013, but despite the liability shift — entailing that retailers who do not buy the technology used to authenticate transactions be held accountable for any fraud that occur in their store — only 37 percent of U.S. stores now accept chip cards.

It will take some time for banks to update all of their ATMs. Besides, thieves have already found a way around it: they simply create a new bank account under the victim’s name, or make purchases online where the PIN number is not required.

At the end of the day, protecting oneself and one’s family from identity theft requires each of us to take decisive steps. Control your personal identifiers closely. Sign up for monitoring of your accounts, so you’ll get a warning of unusual activity. Finally, if your identity is stolen, be prepared to have a private investigator take the necessary steps to restore your identity to its pre-theft status.

Dave Coffey is senior vice president and chief digital officer of LegalShield, a leading provider of protection against identity theft solutions.

 

Kenyatta Turner, MM
Independent Associate | Executive Director
Business Solutions | Employee Benefits
www.kenyattaturner.com | (602) 367-1069 
 

Tags:  Employee Benefits  fradulent  fraud  identity protection  identity theft  Legal  legalshield  mobile apps 

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How To Save $100,000

Posted By George (Clint) Frederick CPA PLLC, George Frederick CPA PLLC, Wednesday, April 6, 2016

 

HOW TO SAVE $100,000

 

The American Institute of Certified Public Accountants publication Journal of Accountancy published today (April 6, 2015) contained an article on fraud.  As I read the article, as titled below, it occurred to me the article could have been titled “How to Save $100,000”. For example, specific operating ratios, employee guidelines, and company policy tailored to the unique characteristics of your company will deter fraud.

 

 

Antifraud controls cut significantly into losses

 

The presence of antifraud controls such as management reviews and telephone hotlines can greatly reduce the damage done by fraud schemes, and the use of such controls is slowly on the rise. Those are two of the trends identified in the 2016 Report to the Nations on Occupational Fraud and Abuse, released Wednesday by the Association of Certified Fraud Examiners.

 

The biennial report, based on thousands of fraud cases reported by fraud examiners worldwide, provides a detailed look of fraud, its perpetration, detection, and how battled and prevented in various industries and regions. Fraud takes a significant toll on organizations. The fraud examiners who participated in the survey estimated that the typical organization loses 5% of revenues to fraud in a given year. The fraud losses

in the study totaled more than $6.3 billion, an average loss of $2.7 million per case. The 23.3% of cases with losses of $1 million or more boosted that average significantly. The median loss was $150,000. Asset misappropriation (83%) caused the smallest median loss at $125,000. In contrast, financial statement fraud (10%) caused the biggest median loss at $975,000.

 

HOW TO SAVE $100,000

 

Antifraud controls limit damage. Organizations that implement antifraud controls inflict much smaller losses. Organizations that engage in proactive data monitoring and analysis, lose $92,000. Whereas organizations without that control lose double or $200,000. Organizations with fewer than 100 employees were the most likely to suffer from fraud in the study, representing about 30% of the cases reported.

 

FRAUD CONTROLS TO ADOPT

 

The study found proactive data monitoring, management reviews, and hotlines reduce loss by 50%. Fraud training for employees, anti-fraud policies, and codes of conduct in an employee manual are also deterrents to company fraud. We recommend a professional external overview of an organizations fraud control.

 

Tags:  fraud  management  small business 

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IRS - Tax Frauds - The Dirty Dozen

Posted By George (Clint) Frederick CPA PLLC, George Frederick CPA PLLC, Thursday, February 18, 2016

This is a reprint from the Feb. 17, 2016, issue of 'The Journal of Accountancy' published by the American Institute of Certified Public Accountants.

Every year, the IRS releases a list of what it calls the worst tax scams of the year. Beginning Feb. 1 and ending on Feb. 17, the IRS issued a news release each day highlighting a scam. These “dirty dozen” scams can be encountered at any time of year, but the IRS reports that they peak during tax season.

 

1. Identity theft

According to the IRS, the No. 1 scam this year is tax-related identity theft, which the IRS defines as when someone uses a taxpayer’s stolen Social Security number to file a tax return claiming a fraudulent refund (IR-2016-12). Although the IRS has introduced more effective screening and detection systems that are designed to detect identity theft before it issues a refund, the Service admitted that it is still a major problem. To fight the problem more effectively, over the past year, the IRS has participated in a Security Summit initiative in partnership with states and the tax-preparation industry to try to improve security for taxpayers. The participants share information of fraudulent schemes that have been detected this filing season to provide increased protection. More than 20 data elements are used, unknown to taxpayers, to verify tax return information.

 

In addition, the IRS urged taxpayers to protect their own information so it is harder for thieves to breach the IRS’s security systems. These efforts at taxpayer education include theTaxes. Security. Together. campaign to help taxpayers avoid the data breaches that make it easier for them to become victims.

 

2. Phone scams

The second scam this year is phone scams, in which criminals call, impersonating the IRS (IR-2016-14). Many times, they disguise the number they are calling from so it appears to be the IRS or another agency calling, and they may threaten arrest, deportation, or license revocation. The scammers sometimes use IRS titles and fake badge numbers to appear legitimate and use the victim’s name, address, and other personal information, which makes the call sound official.

To protect themselves, the IRS says, taxpayers should be aware the IRS will never call to demand immediate payment, call about taxes owed without first having mailed a bill, call to demand payment without the opportunity to question or appeal, require use of a specific payment method, such as a prepaid debit card or wire transfer, ask for credit or debit card numbers over the phone, or threaten to bring in local police or other law enforcement to arrest a taxpayer for not paying.

3. Phishing

Another scam that continues to appear high on the list is “phishing,” in which taxpayers get unsolicited emails seeking financial or personal information. A taxpayer who receives a suspicious email should send it tophishing@irs.gov. “The IRS won’t send you an email about a bill or refund out of the blue,” said IRS Commissioner John Koskinen (IR-2016-15). Scam emails can also infect a computer with malware without the taxpayer’s knowing it, often enabling the criminals to access sensitive files or track keyboard strokes, exposing login information.

4. Return preparer fraud

Return preparer fraud involves “dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers” (IR-2016-16). The IRS warned taxpayers to be wary of “unscrupulous preparers who prey on unsuspecting taxpayers with outlandish promises of overly large refunds,” which is why the IRS says this scam makes it onto the list every year.

“Choose your tax return preparer carefully because you entrust them with your private financial information that needs to be protected,” Koskinen said. The IRS provides a number of tips for taxpayers to choose competent preparers, including checking what the preparer’s credentials are, making sure the preparer will be available after filing season, and ensuring that the taxpayer’s refund is deposited into the taxpayer’s account, not the preparer’s. The IRS recommends avoiding preparers who base their fees on a percentage of the refund or promise larger refunds than other preparers.

 

5. Hiding money or income offshore

Hiding money or income offshore, which is a major focus of IRS enforcement efforts, is the next tax scam the IRS addressed (IR-2016-17). “Our continued enforcement actions should discourage anyone from trying to illegally hide money and income offshore,” Koskinen said. As the IRS explained, there are legitimate reasons that taxpayers have foreign accounts, but these accounts trigger reporting requirements. The IRS offers a number of programs, including the Offshore Voluntary Disclosure Program, for taxpayers to come into compliance with these requirements. The IRS noted that the heightened reporting required under the Foreign Account Tax Compliance Act, which went into effect in 2015, makes it even harder for taxpayers to conceal assets overseas.

6. Inflated refund claims

Another scam that is closely related to return preparer fraud is inflated refund claims, in which unscrupulous preparers set up shop to lure unsuspecting taxpayers (IR-2016-18). “Be wary of tax preparers that tout outlandish refunds based on federal benefits or tax credits you’ve never heard of or weren’t eligible to claim in the past,” Koskinen said.

Inflated refund claims often involve claims for tax credits that taxpayers are not entitled to, such as education credits, the earned income tax credit (EITC), or the American opportunity tax credit. The IRS reminds taxpayers that they are responsible for what is on their return, even if someone else prepares it, and they can be assessed penalties and interest as well as additional tax.

7. Fake charities

Next on the list is fake charities. Taxpayers are cautioned to check the Exempt Organizations Select Check on the IRS’s website to determine whether a charity is bona fide and qualifies for deductible contributions (IR-2016-20). Legitimate charities should be willing to give donors their employer identification numbers, which can then be used to check whether the charities are qualified on the IRS website. Fake charities often use names similar to well-known organizations and may set up fake websites. They also can be used for identity theft purposes. When large-scale natural disasters occur, these fraudulent organizations tend to increase, the IRS reports, and it warns that taxpayers should not make any contributions without checking first.

8. Falsely padding deductions

No. 8 on the list is falsely padding deductions (IR-2016-21), which consists of deceitfully inflating deductions or expenses on the return to pay less tax or receive a bigger refund. This item is new to the dirty dozen list this year. The IRS warns taxpayers that they should “think twice” before overstating their charitable contribution expenses or padding their business expenses, as well as avoid claiming credits they are not entitled to, such as the EITC and the child tax credit. Taxpayers who do this may be subject to substantial penalties and may, in some cases, face criminal prosecution.

9. Excessive claims for business credits

The next item on the list, excessive claims for business credits, expands on last year’s “excessive claims for fuel credits” (IR-2016-22). This scam involves two specific false claims for credits: fraudulent claims for refunds of fuel excise tax and bogus claims for the research tax credit. The IRS says that its refund fraud filters are stopping a number of fraudulent fuel excise tax refunds this year.

10. Falsifying income to claim tax credits

Tenth on the list is falsifying income to claim tax credits (IR-2016-23). This usually involves falsely claiming higher earned income to qualify for the EITC, which is a refundable credit. Unscrupulous preparers often do this to get taxpayers larger refunds than they are entitled to. Even when taxpayers are unaware of these false claims, they are, as the IRS reminds again, responsible for what is on their tax return. They can be subject to significant penalties, interest, and possibly prosecution.

11. Abusive tax shelters

No. 11 is participating in abusive tax shelters (IR-2016-25). Abusive tax shelters are defined as schemes using multiple flowthrough entities to evade taxes. They often use limited liability companies, limited liability partnerships, international business companies, foreign financial accounts, offshore credit or debit cards, and multilayer transactions to conceal who owns the income or assets.

The IRS also mentions the misuse of trusts and captive insurance companies among the types of transactions taxpayers should avoid. As in some of the other scams, the IRS warns that participating in these transactions can result in significant penalties and interest and “possible criminal prosecution.” According to Koskinen, “These schemes can end up costing taxpayers more in back taxes, penalties, and interest than they saved in the first place.”

12. Frivolous tax arguments

The final “scam” is frivolous tax arguments, which the IRS warns taxpayers not to be talked into (IR-2016-27). Announcing the release today of the 2016 version of its webpage, “The Truth About Frivolous Tax Arguments,” the IRS explained how the courts and the IRS have treated these arguments, which involve claims such as that the only employees subject to income tax are employees of the federal government or that only foreign income is taxable. “Taxpayers should avoid unscrupulous promoters of false tax-avoidance arguments because taxpayers end up paying what they owe plus potential penalties and interest mandated by law,” Koskinen said. The IRS reminded taxpayers that they would automatically be subject to the $5,000 penalty for frivolous tax positions.

 

Tags:  FRAUD  TAX 

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Another Fraud Using the IRS

Posted By George (Clint) Frederick CPA PLLC, George Frederick CPA PLLC, Friday, January 22, 2016

 This is another spoof attempting to gain information about you or to instill malware on your computer to obtain your passwords and credit card information. Everyone that works is receiving W2's and 1099's this time of year as required by the IRS to report your income.  Don't fall for the message that may read as follows: 

 

"I have enclose the W2's return's document for your review as instructed by my client. Click here (  VIRUS in Form of a PDF Document )      to view all document in one folder.

I'll await your response if you need more details.

Thanks"

This is fraud!

Tags:  fraud  IRS  scam  Taxes 

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