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Nuggets of wisdom from Libby
Apr 19

Fraud – The More Things Change …

Posted by: Libby Print PDF

It’s funny how the more things change, the more they stay the same. “Secrets of a former credit card thief”, by Michelle Crouch on has many of the same principles as “Catch Me If You Can”, the story of Frank Abignal. Abignal’s book and movie starring Leonardo DiCaprio was a real life tale of crime involving fraudulent checks passed by Abignal and his ability to change identities and personas. He was chased by the FBI for years starting when Abignal was just a teenager. He was subsequently caught, convicted and forced to tell the secrets and provide the training to law enforcement to catch others. That relationship was pivotal in security changes within the banking industry.

Some thirty years later, the same principles are applied in a new arena - scamming and phishing on the internet. This time the story is about Dan DeFelippi, a former credit card and identity thief who has been convicted for his crimes and now trains agents in the latest fraud techniques. His story starts in middle school with what he describes as innocent hacking with an interest in seeing what he could do. In college he started selling fake ID’s to make extra money. He soon discovered on line chat rooms where a whole new world opened up to him where he could make a great deal of money in fraudulent credit cards with very little effort.

DeFelippi reveals he bought customer credit card information, stored on the magnetic stripe, on line from hackers and from those who “skimmed” the information as servers in restaurants. He would then use an encoder to put that data on fake cards, and make purchases on them. Defelippi recommends that consumers avoid using debit cards. If the account is hacked your cash is gone until you fill out the paperwork and persuade the bank to give it back to you. He states that credit cards are much better at protecting you against fraud.

DeFelippi often employed “phishing” scams to obtain credit card information. The first one was directed at AOL users because he thought they would be less computer literate and more likely to fall for his scams. “Your credit card information has expired. Come to this (phony) site and update your information or your account will be closed”. Another “phishing” scam was directed at PayPal customers; “Someone has accessed your account. We’ve locked you account. Please click here to access your account”. The unsuspecting mark would then be linked to a fake website and the PayPal log-in information would be captured.

Protect Yourself

· Checking your credit report at least a couple of times a year to make sure you're not a victim of ID theft. You can do this for free, once a year, for each of the three credit reporting agencies.

· Do your online shopping with reputable established sites. Otherwise, thoroughly check out companies you don't know or haven't dealt with, looking for others' comments on their experiences.

· In particular, don't be tempted to buy merchandise from an email that came from a person or company you don't know, no matter how much of a bargain it seems.

· Double check that any page on which you're about to give your card details is secure -- that it has "https" at the start of the address (the "s" is the security indicator).

· Remember that when you're online, you're moving data backwards and forwards. If you're using an open wireless network, assume it's not secure and that you could be vulnerable to credit card fraud.

· Invent your own answers to the security questions many financial sites now use. Don't use the real information. That way, nobody will be able to guess or research it.

· (Of course, you'll have to make sure you can remember the answers you gave!)

· Use the same ATM for all your cash withdrawals. You'll get to know the machine and therefore more likely will spot if anyone has tampered with it.

· Bank locations are less likely to be vulnerable than convenience stores or clubs, he suggests.

Delfilippi has been caught and is “offering” his expertise to guide apprehensions, induce protections of financial fraud, and help all of us avoid being scammed. There are many, many others taking his place, preying on the vulnerabilities and naiveté of the public. It can be as simple as giving your credit card to the drive-thru cashier.

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