1. FORENSIC ACCOUNTING - BA124 - Fall 2008Slide 13-1 Today’s Topics n Consumer Fraud

2. FORENSIC ACCOUNTING - BA124 - Fall 2008Slide 13-2 Consumer Fraud n Fraud against individuals n Number one consumer fraud = Identity Theft

3. FORENSIC ACCOUNTING - BA124 - Fall 2008Slide 13-3 Identity Theft n Involves over 42% of reported frauds n Use of name, address, SSN, band or credit card PINs to commit fraud n Prevention is the key

4. FORENSIC ACCOUNTING - BA124 - Fall 2008Slide 13-4 Identity Theft Conversion n Purchase of large-ticket items n False car or real estate loans n Creation of phone or cell accounts n Counterfeit checks or debit cards n Creation of new bank accounts n False filing of bankruptcy n False filing of police information n Creation of new credit card accounts n Change of mailing address

5. FORENSIC ACCOUNTING - BA124 - Fall 2008Slide 13-5 Identity Theft Cycle n Stage 1: Discovery n Gain information n Verify information n Stage 2: Action n Document accumulation n Action cover-up n Stage 3: Trial n 1 st – 3 rd dimensions (gas station, store, new account)

6. FORENSIC ACCOUNTING - BA124 - Fall 2008Slide 13-6 How to Steal Someone’s Identity n Obtaining info falsely n Going through the trash n Skimming credit cards n Hacking n Stealing wallets n Outright theft from the home n Stealing mail n False change of address form n Shoulder surfing n Phishing or Pharming

7. FORENSIC ACCOUNTING - BA124 - Fall 2008Slide 13-7 How to Protect Yourself n Guard your mail n Do not use pre-approved credit cards n Guard SSN and PINs n Guard all personal information n Guard your trash n Protect your wallet n Protect and change your passwords n Protect your home n Protect your personal computers n Use the Gramm-Leach-Bliley Act to opt out of having your information sold

8. FORENSIC ACCOUNTING - BA124 - Fall 2008Slide 13-8 Post Event Activity n Report event promptly n Collect evidential matter n Contact FTC regarding identity theft n Homeland security implications

9. FORENSIC ACCOUNTING - BA124 - Fall 2008Slide 13-9 Other Forms of Consumer Fraud n Foreign Advance-Fee Scams n Work at Home Schemes (MLMs) n Bogus Mystery Shopping Scams n Telemarketing Scams n Investment Scams (Ponzi Scams)