Finance Book

There are many stories of identity theft coming in the media. Most of these stories are focused on individuals whose identities are stolen. However, no one seems to be interested in understanding the impact of identity theft on small businesses.

Surveys have shown that one in sixteen businesses is attacked by identity thieves.

Most of the small business owners are interested in developing their business and making profit. In the process, they tend to neglect the security aspect. This is more likely in case of newly started businesses. Many established businesses also do not have a plan to react to such theft.

It is important to understand how identity thieves can harm the security of your business.

1. The thieves can get access to your company’s checking accounts as well as business credit cards and take away the money.

2. Some smart thieves can open a new checking account and obtain credit in the name of your business. This credit can be a big risk to your business.

3. The employee information or client information of your business is also at risk. Theft of such information may lead to serious consequences. Such information may be sold to other thieves, and it will increase the risk tremendously. If the identity details and other personal information of the customers are stolen, customers may sue the business for damages.

4. There may be some other risks to your business. Someone may change the name of your business or address of your business to capture important incoming letters. It may result in large unauthorized purchases, difficulties in credit ratings and damage business credibility in gentle. If it is your personal business, your entire financial life is in danger.

5. There is a new law introduced recently – Fair and Accurate Credit Transactions Act (FACTA) which deals with the security of identities of customers and employees of all businesses. If any business is negligent about securing this information, it can be liable and can be prosecuted for heavy penalties.

Identity theft is no more a civil matter. Businesses can be prosecuted for criminal charges if they are negligent in securing the information of their clients or employees.

By: Chintamani Abhyankar

You must be feeling the pinch of increase in the prices of gas.  High prices are same for everyone and you cannot escape. However, you may be facing a more devastating trouble while filling gas at the pumps – identity theft.

Identity thieves at the gas pumps try to install an electronic device called skimmer.  It is a tiny device installed outside the gas pump, particularly on the payment area.  You may be in a hurry while filling gas and may not look at the pump carefully.  Such skimmers may be in the form of tiny cameras to capture the pin numbers of customers or they may be in the form of fake keypads mounted on the top of the original ones to capture the keystrokes and the pin code.

Thieves take advantage of the fact that there are no attendants at the pumps.  They will keep on collecting information on credit cards with these skimmers and either will sell this information to others or use such information to make purchases on-line.  Sometimes they may make duplicate cards with the account numbers of the victims.  In any way, they will siphon your money very quickly.

This fraud recently became visible and may spread countrywide if the pump owners are not careful.

Well you cannot do anything to prevent installation of skimmers at the pumps, but you can certainly protect yourself by taking the following precautions -  

1.    Avoid using ATM cards at the pumps – The safest form of payment at a gas pump is always cash but it may not be feasible all the time.  However at least you can limit the risk by avoiding the use of ATM cards.  These cards are linked directly to your checking account and it is very hard to recover the money once it goes out of your account.  Even if the fraud is detected on your account, the account may be closed or frozen by your bank and you will not have access unless the matter is resolved.

Instead of ATM cards, you should use credit cards.  Fraud with credit cards is much easier to handle because the credit card companies will take quick actions to prevent losses.  Also by law, your liability for fraudulent use of credit card is limited to $50.  This may not put a big hardship for you.

2.    Always try to select a pump which is close to the cashier. Installing skimmers on these pumps may be difficult for the identity thieves.  If you are unable to get a pump close to the cashier, you can wait for some time but never take a pump which is far away from the cashier.

3.    You have to be careful about the payment.  If you use only one gas station most of the times, it will be easier for you to get accustomed with the features of the pumps there.  Just have a look at the pad and around that place to find out whether there is anything suspicious.  If you suspect anything, immediately point it out to the cashier, explaining your doubts.

4.    Always select a pump with a sealed sticker.  In this manner, you can reduce the risk of using tampered pump.  If you feel the seal of the pump is broken or slightly damaged, avoid using it and inform about it to the cashier.  If on a particular gas station you find many pumps with the damaged seal, avoid using such gas station.

5.    You should check your credit card statements routinely.  By doing that, you will be able to know quickly about the unauthorized entries.  Realizing quickly the clues of identity theft is important for preventing huge damages.

You cannot avoid filling gas at the pumps.  However, if you are watchful and particular about some small things, you can reduce the risk of identity theft to a great extent.

By: Chintamani Abhyankar

Social security number is allotted to you only once in your life.  Even if it is stolen or misused, you cannot change it. People are very careful about their credit cards or debit cards.  They take many precautions for protecting their card details.  However they are not that vigilant about their social security number. Theft of the social security number can lead to far more serious consequences which can even destroy your entire life.

Social security number is one of the primary form of identification in US.  It is asked for even now and then and people tend to submit it freely.  This weakness is realized by identity thieves who steal your number and use it for malicious purposes.

The thieves will use your social security number in two ways.  Either they will use both your name and the number together for fraudulent purposes or they can use your number with their own name.  Both these things lead to evil consequences. Let us see how they do it.

1.    Opening new lines of credit – Your name is used for opening a new line of credit, a mortgage or a credit card, quoting your number with your personal details.  The thieves will siphon all the money and will never pay the dues.  Finally the dues go into collections and you get a shock on receiving notices from the collection agencies.

2.    Gaining illegal employment – Illegal immigrants may buy or steal a social security number for getting employment.  They will always keep their withholding at a very low level and will finally end up in huge tax liabilities.  As the office of social security never vouches for the name and corresponding number of an individual, the employer will not be able to know the real details of the employee.  Finally, the person in whose name the social security number really stands will get unexpected tax liabilities.

3.    Obtaining other documents like a driving license – The thieves may apply for a driving license quoting your number.  The license may be used for criminal purposes.  The crimes will naturally go in you name.  You may be arrested or even fired from your job due to a criminal history which you have never created.

4.    Misusing medical facilities – Quoting your social security number, someone can get costly medical care in your name, and then without payment of bills he/she can disappear leaving behind a huge debt for you.  Even worse, your medical record may be spoiled because of such incidence.  Your blood group, your allergies and other precautions required for you may be entered on your medical record  which are not in fact yours and this can create serious complications when you get admitted for any reason. 

As it is not possible for you to change your social security number, you should take extreme care while handing it over to anyone. If you think submitting it is not necessary, you should question the institution or person about the purpose of asking for it. You should also check regularly your credit report in order to find out suspicious entries.  If anyone has used your name and your number to get some benefit, you may come to know about it sooner.  However if your number is used with another name, you may not find such fraud for years.

There are some professional monitoring agencies in the market who can guard your identity on the Internet. They will apply some special software in order to find out whether there is any misuse of your social security number, your credit or debit card or any other personal information on the Internet or in public records.  You can subscribe to one of these services and get some peace of mind.  After all, your life must not be destroyed by these thieves for a small neglect on your part. 

By: Chintamani Abhyankar