Consumer Fraud

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March 18, 2008
The Federal Deposit Insurance Corporation (FDIC) has received numerous notifications from consumers of an email that gives the appearance of being sent from the FDIC. The "From" line of the email displays the name, "Federal Deposit Insurance Corporation" and the subject includes the words, "Consumer Protection."

The email directs the recipient to click on a hyperlink in order to register for a "Consumer Protection Card Insurance" program which "can restore you up to $500 is you are a victim of internet fraud."
However, the hyperlink directs the recipient to a "spoofed" web page requesting the user to enter personal information, including name, Social Security number, bank name and account numbers, etc.

The requested information could be used to perpetrate identity theft and gain unauthorized access to bank accounts.

Consumers should NOT access the link provided within the body of the email and should NOT, under any circumstances, provide any personal information. Consumers are asked to report any attempts to obtain their personal information to the FDIC by sending information to alert@fdic.gov.

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February 27, 2008
Fraudulent emails are being sent to banking customers asking them to complete a Commercial Banking Online form. The email directs users to a website where they are asked to enter their Online Banking User ID and Password. These emails are fraudulent. Users should ignore and delete these emails.

Union Bank and other reputable companies do not ask customers to verify personal information such as passwords, PINs, credit card numbers or Social Security numbers online.

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January 31, 2008
Identity thieves are already using promises of tax rebates to trick people into revealing financial and personal data, the Internal Revenue Service said yesterday. Under one scam, consumers are receiving phone calls telling them they can only receive a rebate if they provide bank account information for a direct deposit. The IRS emphasized that it does not collect information by telephone, and does not force people to use direct deposit.

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A new phishing attack that targets customers of FDIC insured institutions is in wide circulation. Customers receive a fraudulent e-mail message which claims their account is in violation of the Patriot Act, and that FDIC insurance has been removed from their account until their identity can be “verified.” The message includes a link to a phishing website which prompts users to enter account information to “verify” their identity. DO NOT enter your personal information on such a website! Union Bank and/or the FDIC will NEVER request verification of your personal information via e-mail. Click here to view a sample phishing e-mail message.

If you receive what appears to be a “phishing” e-mail, please contact your local law enforcement authority.

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Be on the lookout for extremely official-looking, counterfeit U.S. Treasury checks currently in circulation. Scammers may claim the checks are issued by the government as a protective measure against other fraudulent checks. Please be aware that only official government entities are authorized to issue U.S. Treasury checks. A few of the security features of official U.S. Treasury checks are listed below.

Watermark - U.S. Treasury checks are printed on watermarked paper, and the words "U.S. Treasury" can only be seen by holding the check up to the light.

Bleeding Ink - The Treasury seal, located to the right of the Statue of Liberty, contains security ink that will run and turn red when moisture is applied to the black ink of the seal.

Microprinted Endorsement Line - The endorsement line on the reverse of the U.S. Treasury check is actually a line of microprint that, when magnified, spells out USAUSAUSAUSAUSA . . . .
Banks may look for other U.S. Treasury check security features, as well. You should be aware that the government may take 60 days or longer to return counterfeit checks.

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Many Union Bank customers have recently received personally addressed, fraudulent letters claiming the customer is the winner of a lottery they didn't enter and have never heard of! And these fraudsters go a step further - enclosed with the letter is a counterfeit "partial winnings" check, which may appear to be drawn on a legitimate bank. The fraudsters make their money by requiring the recipient to mail or wire a fee (sometimes referred to as a "Clearance Fee" or an "Assurity Bond") in order to "release" the remaining lottery winnings. But the recipient never receives any additional winnings, and the counterfeit cashier's checks are worthless. Another version of this scam is to claim the letter recipient is entitled to a large inheritance, but must pay "taxes" before receiving the money. There are multiple versions of the letter, but the format is similar in all.

First, the letter writer claims the recipient has won a large lottery prize (often from an international source, although not always), and claims to have tried to contact the recipient multiple times. The letter indicates a special exception has been made to keep the recipient from being disqualified, but an immediate response is necessary in order to claim the prize before it expires. Enclosed with the letter is a "cashier's check" for a small amount of the total prize, and the letter explains the remainder of the prize will be mailed after the winner pays a "clearance fee" or "bond" to the lottery office via mail or wire. However, the cashier's check is counterfeit, and the lottery winnings do not exist!

These letters appear to be "official," and one even included a Metropolitan New York Better Business Bureau logo! The cashier's checks may appear to be drawn on legitimate banks (recently Santa Barbara Bank & Trust and White Oak State Bank), but the checks are counterfeit. The letters include contact names and phone numbers, and the people who answer the phone sound legitimate. However, these are simply the fraudsters' methods to try to convince you to hand over your money, and it's up to you to say "No!"

Always use common sense if you receive an offer for "free" money, and ask yourself, "What's the catch?" and "Why would anyone give me money for free?" It's a sure sign of fraud if someone asks you to send money before they'll send you a larger sum. Plus, it just doesn't make sense. If it seems too good to be true, it probably is.

• Seal your lips. Never give your Social Security number – or personal information of any kind – over the telephone or online unless you initiate the contact.
• Shred. Shred bank and credit card statements, canceled checks, pre-approved credit card offers, bills with account information and the like.
• Guard your mailbox. When you pay bills, don’t put them in your mailbox with the flag up. Use a locked mailbox or the post office.
• Check your credit reports. Look for telltale markers of identity theft, like an address change you didn’t make or a new account you didn’t open. Cancel accounts you don’t use or only rarely use – open credit is a prime target.
• Scrutinize bank statements. Monitor your accounts frequently for suspicious activity.
• Be careful at ATMs. “Shoulder surfers” can get your account and PIN numbers.
• Build a firewall and install anti-virus software. If you use a computer at home, protect yourself by installing firewall software and anti-virus software that updates automatically. Some phishing e-mails contain harmful elements that might track your online activities or harm your computer system without your knowledge.
• Memorize. Don’t write down PIN numbers, passwords and the like – commit them to memory.

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Identity theft - Do you think it can't happen to you? That is exactly what one Union Bank customer believed, until it did happen. To protect the customer’s privacy, we will refer to her as “Jane.” A local police department contacted Jane and informed her that they had arrested some individuals in relation to an identity theft ring and that Jane’s credit report was found in their possession. Jane wasn’t exactly sure how they had obtained her credit report, but stated she had recently applied for a car loan at two different local car dealerships. Jane believes the thieves somehow obtained her credit report from one of the dealerships. In fact, the identity thieves had already fraudulently opened a credit card in Jane’s name.

Jane made the comment that she “never thought this would happen” to her. She indicated that she has taken precautions to protect her personal information, like shredding all documents containing personal information and not giving out personal information over the phone.

Unfortunately, there are many methods that identity thieves use to obtain personal information. For instance:

• They get information from businesses or other institutions by stealing records or information while they're on the job; bribing an employee who has access to these records; hacking these records; or conning information out of employees.
• They may steal your mail, including bank and credit card statements, credit card offers, new checks, and tax information.
• They may rummage through your trash, the trash of businesses, or public trash dumps in a practice known as "dumpster diving."
• They may get your credit reports by abusing their employer's authorized access to them, or by posing as a landlord, employer, or someone else who may have a legal right to access your report.
• They may steal your credit or debit card numbers by capturing the information in a data storage device in a practice known as "skimming."
• They may swipe your card for an actual purchase, or attach the device to an ATM machine where you may enter or swipe your card.
• They may steal your wallet or purse.
• They may complete a "change of address form" to divert your mail to another location.
• They may steal personal information they find in your home.
• They may steal personal information from you through e-mail or over the phone by posing as legitimate companies and claiming that you have a problem with your account. This practice is known as "phishing" online, or “pretexting” by phone.

Identity theft is the fastest growing crime in the U.S. Education is the first line of defense for protecting yourself. The more you know about identity theft and how your personal information can be obtained, the more precautions you can take to protect your identity.

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From the article, Internet Pirates are Trying to Steal Your Information, on the website of the Office of the Comptroller of the Currency. (See list of Fraud Resources below for link.)

Here's how phishing works: In a typical case, you’ll receive an e-mail that appears to come from a reputable company that you recognize and do business with, such as your financial institution. In some cases, the e-mail may appear to come from a government agency, including one of the federal financial institution regulatory agencies. The e-mail will probably warn you of a serious problem that requires your immediate attention. It may use phrases, such as “Immediate attention required,” or “Please contact us immediately about your account.” The e-mail will then encourage you to click on a button to go to the institution’s Web site. In a phishing scam, you could be redirected to a phony Web site that may look exactly like the real thing. Sometimes, in fact, it may be the company’s actual Web site. In those cases, a pop-up window will quickly appear for the purpose of harvesting your financial information. In either case, you may be asked to update your account information or to provide information for verification purposes: your Social Security number, your account number, your password, or the information you use to verify your identity when speaking to a real financial institution, such as your mother’s maiden name or your place of birth. If you provide the requested information, you may find yourself the victim of identity theft.

Please be aware that Union Bank will never ask you to provide sensitive account information via e-mail.

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Per the Missouri Independent Bankers Association, a new emerging scam is called "pharming," whereby spyware is unknowingly installed on your computer. When you type in a legitimate URL (Universal Resource Locator) in your brower's address bar, a redirection scheme takes you to a fake website without you even knowing it.

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The United States Secret Service reports that “The perpetrators of Advance Fee Fraud (AFF), known internationally as ‘4-1-9’ fraud after the section of the Nigerian penal code which addresses fraud schemes, are often very creative and innovative.”

Victims of this scam are coerced into believing they will receive large sums of money with virtually no effort. A potential victim may receive an unsolicited fax or e-mail from someone who claims to be a foreign official, a civil servant, etc., who has access to a large sum of money which he or she wants to transfer out of a foreign country (often Nigeria). The scam artist offers the victim a percentage of the funds, perhaps millions of dollars, in exchange for providing an account in which to transfer the funds. However, there are actually no funds to transfer, and the scammers make their money by requiring victims to pay fees in advance for “processing,” “taxes,” etc. The following are common scam traits, as provided by the US Secret Service(www.secretservice.gov):

• In almost every case there is a sense of urgency;
• The victim is enticed to travel to Nigeria or a border country;
• There are many forged official looking documents;
• Much of the correspondence is handled by fax or through the mail;
• Blank letterheads and invoices are requested from the victim, along with banking particulars;
• Any number of Nigerian fees are requested for processing the transaction, with each fee purported to be the last required;
• The confidential nature of the transaction is emphasized;
• There are usually claims of strong ties to Nigerian officials;
• A Nigerian residing in the US, London or other foreign venue may claim to be a clearing house bank for the Central Bank of Nigeria;
• Offices in legitimate government buildings appear to have been used by impostors posing as the real occupants or officials.

  If you encounter such a fraud, use your common sense and ask yourself the question, “Why would a total stranger want to give me free money?” The answer is, “They wouldn’t!” Be smart and don’t take the bait.

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Click on the link for recent Fraud Alerts issued by the Federal Deposit Insurance Corporation.

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Skimming fraud at the ATM is on the rise. Skimming occurs when identity thieves illegally attach a data-storage device to an ATM card reader. Click on the link for a list of "The World's Top Twenty Tips for ATM Use" from the Global ATM Security Alliance.

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• Close any accounts that have been tampered with or opened fraudulently.
• Contact Union Bank and all of your creditors and all banks that you have accounts with. Cancel all existing bank and credit accounts and establish new accounts with new account numbers.
• Contact your local police or other appropriate law enforcement.
• Contact the three major credit reporting agencies to report the fraud and to request a free copy of your credit report from each agency. (Click here to learn how to contact the credit reporting agencies.)
• Contact the Federal Trade Commission at 202-FTC-HELP. You may also ask for a free copy of the article, Take Charge: Fighting Back Against Identity Theft (http://www.ftc.gov/bcp/conline/pubs/credit/idtheft.htm), or click on the link to download a copy.
• File a complaint with the Federal Trade Commission (www.ftc.gov). This web site is also a great source for information to assist you in restoring your credit.

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Click on the links to the following articles to learn more about fraud.

• National Resource for Identity Theft (Federal Trade Commission)(http://www.consumer.gov/idtheft/index.html)
• Internet Pirates Are Trying to Steal Your Information (Federal Reserve Bank of Boston)(http://www.bos.frb.org/consumer/identity/index.htm)
• When a Criminal's Cover is Your Identity (Office of the Comptroller of the Currency)(http://www.occ.gov/consumer/phishing.htm)
• Consumer Fraud Alerts (FDIC)(http://www.fdic.gov/consumers/consumer/news/cnsum00/idthft.html)
• Anti-Phishing Working Group (http://www.antiphishing.org)

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