Scams identified to date include on-line stock sale offers in companies appearing to be associated with the cleanup efforts,  bogus job offers relating to clean-up companies, and solicitations of funds and contributions to be sent for oil spill relief efforts.  The goal of these exploits is to fraudulently obtain your personal information and your funds, neither of which will be used legitimately.

You need to be careful.  Due diligence is in order.  Before you provide any information or send any contributions relating to the oil spill disaster, do your homework and assure yourself that the organization and offers are legitimate.  If you can’t legitimize the information objectively, run don’t walk away from their sites and offers.

It is just another sad sign of the state of our society, and so unfortunate that so many seek to take advantage of our emotional willingness to help in times of need for their own personal exploits.  Not only does it make everyone more skeptical to help at all, furthering the erosion of our society, it significantly effects the legitimate organizations who truly want to help those in need.

A small charge, an amount under a dollar up to a few dollars, appears on your credit card statement.  Due to the insignificance of the amount, you don;t bother spending any time trying to figure out what it was for, and having it reversed off your account.  You try and recall where the charge could have come from, perhaps an adjustment to a legitimate purchase.

I never thought much about thieves stealing million of credit card accounts, and simply charging a few dollars to each stolen account.  But as it turns out, that’s exactly what they do, and a few dollars charged to millions of accounts, results in millions of dollars.

I went home that night and checked my credit card statements, and sure enough, I found these insignificant charges on my account.  The total of them do not warrant my doing anything about it, but they are there.  I’ll bet if you look, you’ll find them on yours as well.

Here’s the link to an article where the FTC just busted a very organized ring was stealing credit card accounts and doing this very scheme.

What amazes me more than the gambling is the amounts that can be lost, and with the embezzlements, the amounts that can be diverted from an organization to support gambling without the organization missing the funds.

Case in point comes from an article in today’s Journal Inquirer, a local Connecticut newspaper.  “Woman gets 9 months for thefts.”

The woman in the article was convicted of embezzling $335,000 from a local school lunch program.  She was the director of dining services for the local town, and took cafeteria receipts, concealing the thefts with falsified logs.  The article also stated she lost more than $380,000 over six years gambling at the slot machines.

The real questions I have after reading this article are 1) how much funds flow through this town’s cafeteria services to have been able to loose $335,000 and not miss the funds, and 2) where were the basic level internal controls over cash receipts, collections, entries and deposits to have both prevented this from happening in the first place, and also to have detected discrepancies as soon as they started to occur?

I guess a third question would be fair as well – towns like this town undergo annual financial audits by outside accounting firms.  Given the existence of casinos in CT and the high risks of gambling and embezzlement, why wasn’t such a large theft detected as part of any year’s audit?

Just makes me wonder just how much fraud, theft and embezzlement is occurring as we speak, waiting to be detected or discovered, or more likely, waiting for accidental identification after the snowball effect has occurred.

As I read the instructions it dawned on me that we used our credit and debit cards in many different contexts beyond store purchases, gas purchases, red box terminals and ATM machines.

At the airport I had to use a credit card to retrieve my boarding passes – the airlines call it “self-service” checkin.  Nothing self-service about it, we had to get in line both ways due to system issues.  I wondered what system was behind the self-service terminals that hundreds of thousands of travelers insert their credit card into every traveling day, and more importantly, what safeguards were in place to protect my card information from skimming or theft.

The safe in our room had two options – enter a private code or swipe a credit card on the reader.  The same card used to close the safe would be required to be swiped to re-open the safe.  I wondered what systems were behind the safe tracking my credit card information, and more importantly, who had access to my card information when I swiped.  I chose to enter a four digit code, as I had no way of knowing if dishonest employees could access all the cards swiped on the room’s safe.  And then I wondered how many safes were in this one hotel – hundreds.  In all the rooms in all the hotels in the US alone – thousands…

An individual attending one of my sessions in Miami asked me what I suggested for a replacement to using debit and credit cards due the high incidence of skimming.  She asked if we should switch back to cash only.  I responded that if we did that, the number of personal robberies would certainly increase.

The solution if to be prudent where you use your credit card, monitor your card’s activity, loose your debit card (and switch to a credit card), and remain vigilant.

I came across a frightening image.  It was a picture of a redbox movie rental station, focused in on the credit card swipe area.

Much to my surprise I learned the folks stealing our credit card and debit card information have been installing their card skimming devices onto redbox stations.

If you are a redbox user like myself, you need to start watching for signs to ensure that a skimming device has not been added to the redbox station you use.

Here is the URL to the redbox image to help show you what to look for:

http://4.bp.blogspot.com/_Y5Wj_eMCNq4/SFx15mMbAoI/AAAAAAAAAYU/OegMqgrtUCI/s1600/redbox.jpg

While convenient for transporting files home to work on, or for sharing files and photos with friends, these USB drives pose a serious risk for employers. Ill-willed employees could simply copy confidential files, such as client lists, trade secrets, employee information o even the accounting files, right onto a concealed USB jump drive, and take the information with them.

Company policies should state that all company information is proprietary and remains the property of the company. No personal possession, copying, transferring, or downloading is permitted for any reason. All employees should be required to sign both a confidentiality agreement as well as an acknowledgment for receiving the company’s policies regarding company information. The signing of the forms will act both as a deterrent as well as allow for enforcement in the event company information is diverted.

USB jump drives should be prohibited, and the company’s IT policies and procedures should ensure that all files are regularly backed up. Using USB jump drives as a permanent backup solution will cause you headaches when the drives fail, and they do fail at a high rate when used frequently.

If needed, the USB ports on employee computers can be disabled, preventing employees from making illegal copies of company information via USB.

If you don’t know what these drives look like, or worse in what objects these drives are available (concealed), you should spend a few minutes searching images on the Internet – you will be amazed where these drives are turning up.

Protect your company’s valuable assets.

If you want to remain current in the world of employee embezzlement, I suggest you develop a similar routine to keep up with the latest developments.

I am amazed that some types of employee thefts, tried and true for years on end, continues to plague employers in this day, especially when they are very well known and very basic schemes.

My routine involves shopping at Staples, although any office supply store would suffice.  It is there that you will learn the latest types of pens, inks and other office supplies that can be used by an ill-willed employee to steal from the company.

The latest is the revival of the erasable ink pens.  There simply is no place for erasable ink pens (or pencils) in the accounting department of any employer.  For example, checks manually prepared using erasable ink pens can be altered after they are signed – the thefts are just that easy.  This is why you need to know what these pens look like, and scream if you see your staff using them.

Pilot’s “Frixion” are the latest rage.  The ink can be removed by friction.  Simply use the rubber end of the pen and erase off the writings.  There is no place for these in the finance and bookkeeping offices.  You need to know what they look like, and ensure they are not being used.  Better still, never have manual checks altogether – insist all checks are computer generated from your accounting system.

What the Frixion package does not tell you is that the ink is also thermostatic ink (reacts to temperature).  If you write with the pen and heat up the area where you wrote, the ink will go transparent.  Once cooled, the ink will re-appear.  Fun for a science project, and for ensuring a document is the original, but no place for this in accounting.

I encourage you in your battle against employee fraud to visit your local office supplier on a regular basis, to watch for the latest items.

Watch for my next post – USB Jump drives.

Searching today’s news posts for fraud related articles to be incorporated into two sessions I will be presenting in Miami in May, I came across this article in The Washington Post.

Although I am well aware of manufacturers and producers misrepresenting their ingredients or nutritional claims , at times puffing versus out right lies, I hadn’t realized until tonight that a new type of “fraud” had been labeled for this growing practice.

I guess I shouldn’t be surprised by the “bait and switch” tactics of companies wanting to offer something of higher quality for a higher price without having to include the higher quality ingredients.  In the end it simply comes down to greed.  Save money, misrepresent the product, and hope the consuming public is no wiser.  No harm, right?

My son has a life-threatening allergy to nuts, peanuts mainly, but any nuts or nut products.  We have to read the labels and ingredients carefully for everything we use and consume.  I am always surprised where we find nut products, or that the items were made in a plant that also processes nuts.  We have even seen times where nuts were not listed in a product we buy and use frequently, and for some reason, when we buy the same item at a later time, the nut warming in present.  We have been told that same name items could be manufactured in different plants on behalf of the maker, and that some plants could be nut free while others may not.

My fear after reading this article is whether these manufacturers are careful when they are substituting ingredients, and updating their labeling to reflect their substitutions.  I suspect not, as their scheme would be easily revealed.

Buyer beware I guess.  Another sad sign of our society.  We’ll just have to continue reading everything carefully and “trust” that the maker didn’t pull one of these schemes.

Here’s the URL to the full article.

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/29/AR2010032903824.html

Time and again I have posted regarding the use of a credit card over a debit card.  The main issue is that with your debit card, when fraudulent access is gained to your account, your funds are gone.

I found this article tonight that does a great job highlighting some of the issues occurring with debit and credit cards, and identifies ten (10) contexts where the use of your debit card would likely prove to be a real issue for you.

Here it the link to the article.  You may have to paste it into your browser.

http://finance.yahoo.com/banking-budgeting/article/109125/10-places-not-to-use-your-debit-card?mod=bb-checking_savings

I have received many requests from all sorts of sources over the years, many from individuals or organizations who have fallen victim to some type of fraud or financial crime.  Still more inquiries come from individuals suffering through a divorce, struggling to determine how to identify their former spouse’s true income and assets.  Often I never hear from the person who requested the information, and I never know if what I provided was even helpful.  It’s a fine line between deciding to invest the time in responding to inquires versus ignoring them due to time limitations.

Yesterday’s request was unique in that the information I provided was incorporated into a response to a reader’s plea for assistance with their fraud issues – posted within Jean Chatzky’s blog post.  Certainly the highlight of my month!

I thought the blog post did an excellent job providing the reader with useful direction and resources to deal with being a victim of a financial crime.

Thank you Jean for incorporating my input in your blog.

Here’s the link to Jean’s blog post:

http://www.jeanchatzky.com/homepage/ask-jean-tuesday-free-yourself-from-fraud/#more-2848