Identity Theft Prevention

Not Just Personal Problem

Copus Cases

Harold Copus
Family Business Security Expert

Identity theft prevention information is generally focused on individuals. The horror stories abound about how identity theft has disrupted lives and cost victims huge amount of time, the frustration of working with financial institutions to correct the identity theft problem - and many thousands of dollars.

But family businesses should also have a concern about identity theft prevention according to family business security expert

Harold Copus

The Case In Point

Identity theft prevention was the focus recently when a business discovered that someone was cashing unauthorized company checks all over the country.

Our firm was hired to investigate and we pinpointed the culprit, a very clever mailroom employee.

His method was simple. First, he stole a company-issued check, scanned it and mailed out the original so no one would be suspicious. Using the scanned copy, he proceeded to create a multitude of checks, and through a network “cashed” them in around the country for a total of over $400,000. Some checks actually cleared the client’s bank account. Most did not, but still they had been cashed.

Working with the client, local police, Secret Service and Postal Inspectors, a search warrant was obtained for the residence of the employee. The residence contained internal customer data of the client, a check from one of those customers that was in the process of being copied, and a duplicate postage meter. This guy was about to make this his fulltime business.

The Facts

We hear a lot about personal ID theft, but companies face the same issues. Anyone having access to a company check can copy it and get into your business account. Identity theft prevention means that access to company checks has to be limited. Exposure can come about in many ways including mailrooms, bookkeepers or even the cleaning crew. Once a thief gets his hands on a check, he has the ban routing number, account number and the check sequence. All he has to do then is copy or scan the check to create his own “original.”

Often times, accounting departments will have a notice printed on the check that two signatures are required over a certain dollar amount. That’s no problem for the I.D. thief, who now knows that if he makes the check out for less than that amount, he will only have to forge one signature!

The Security Solution

There are several forms of identity theft prevention to combat this type of checkbook I.D. theft. If you can afford it, institute Positive Pay with your bank. It can be cost prohibitive for smaller companies. All companies, however, should have their check stock reviewed by a security professional. Often, additional security features can be added to a check to preclude tampering by a thief. In the case above, many internal procedures were modified including a complete rework of the check stock.

Advice from an Attorney
At No Charge!

This identity theft protection advice comes from an unfortunate attorney whose wallet was stolen. Learn some identity theft protection tips, and what to do if your information is stolen.

Identity theft protection

  1. The next time you order checks have only your initials (instead of first name) and last name put on them. If someone takes your checkbook, they will not know if you sign your checks with just your initials or your first name, but your bank will know how you sign your checks.
  2. Do not sign the back of your credit cards. Instead, put "PHOTO ID REQUIRED".
  3. When you are writing checks to pay on your credit card accounts, DO NOT put the complete account number on the "For" line. Instead, just put the last four numbers. The credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check processing channels won't have access to it.
  4. Put your work phone # on your checks instead of your home phone. If you have a PO Box, use that instead of your home address. If you do not have a PO Box, use your work address. Never have your SS# printed on your checks. (DUH!) You can add it if it is necessary. But if you have it printed, anyone can get it and you have lost identity theft protection.
  5. Place the contents of your wallet on a photocopy machine. Do both sides of each license, credit card, etc. You will know what you had in your wallet and all of the account numbers and phone numbers to call and cancel. Keep the photocopy in a safe place. I also carry a photocopy of my passport when I travel either here or abroad. We've all heard horror stories about fraud that's committed on us in stealing a name, address, Social Security number, credit cards.

Unfortunately, I, an attorney, have firsthand knowledge because my wallet was stolen last month. Within a week, the thieves ordered an expensive monthly cell phone package, applied for a VISA credit card, had a credit line approved to buy a Gateway computer, received a PIN number from DMV to change my driving record information online, and more. But here's some critical information to limit the damage in case this happens to you or someone you know:

If [when!] your identity is stolen

  1. We have been told we should cancel our credit cards immediately. But the key is having the toll free numbers and your card numbers handy so you know whom to call. Keep those where you can find them.
  2. File a police report immediately in the jurisdiction where your credit cards, etc., were stolen. This proves to credit providers you were diligent, and this is a first step toward an investigation (if there ever is one). But here's what is perhaps most important of all: (I never even thought to do this.)
  3. Call the 3 national credit reporting organizations immediately to place a fraud alert on your name and Social Security number. I had never heard of doing that until advised by a bank that called to tell me an application for credit was made over the Internet in my name. The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit.

By the time I was advised to do this, almost two weeks after the theft, all the damage had been done. There are records of all the credit checks initiated by the thieves' purchases, none of which I knew about before placing the alert. Since then, no additional damage has been done, and the thieves threw my wallet away. This weekend someone turned it in. It seems to have stopped them dead in their tracks.

Call these numbers

Now, here are the numbers you always need to contact if you are the victim of personal identity theft because your wallet or other information is stolen:

  1. Equifax: 1-800-525-6285
  2. Experian (formerly TRW): 1-888-397-3742
  3. Trans Union: 1-800-680-7289
  4. Social Security Administration (fraud line): 1-800-269-0271

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