identity theft: how to protect yourself wells fargo advantage funds ® pierre movsessian, mba,...

Identity theft: How to protect yourself

Wells Fargo Advantage Funds®

Pierre Movsessian, MBA, CFP®, AIF®

LPL Branch Manager

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Disclosure information

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Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds®. Other affiliates of Wells Fargo & Company provide sub-advisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company. 201579 03-11

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Today’s agenda

Identity theft and how your identity can be compromised

Preventing identity theft

What to do if you are a victim

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How your identity can be compromised

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Wells Fargo knows identity theft

This information will help bolster your awareness, increase your anticipation of, and help you take action to help prevent identity theft in your life.

Find your confidence with Wells Fargo.

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“What victims of identity theft have in common is the difficult, time-consuming and potentially expensive task of repairing the damage that has been done to their credit, their savings, and their reputation.”

- Ralph BashamDirector, U.S. Secret ServiceU.S. Department of Homeland SecurityJuly 29, 2003

How serious is identity theft

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How pervasive is identity theft

Source: 2011 Identity Fraud Survey Report, Javelin Strategy & Research, February 2011.

In 2010, the number of identity fraud victims returned to a level last seen in 2007: 8.1 million.

2003 2004 2005 2006 2007 2008 2009 20100

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How pervasive is identity theft


Other key findings:

Although the number of victims fell by 28%, average consumer costs rose by 68%.

Friendly fraud continues to hit victims ages 25 to 34 most often and more likely to affect those earning less than $50,000 annually.

Average resolution time increased across the board.

Users of LinkedIn, not Facebook or MySpace, are more likely to be victims of fraud.

Consumers said a “change in physical address” as the number one method of account takeover in 2010.

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Facts and figures about identity theft

1 out of 5

• Victims do not know how their personal information was obtained

14%

• U.S. fraud victims said their information was stolen by someone they knew

13%

• Of victims experienced an account takeover

29%

• Of victims reported having their Social Security number stolen


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The fallout from identity theft

A NASA engineer was refused a loan by his bank of 11 years and had to use his retirement funds to finance his son's education.

A consumer spent three years trying to repair her damaged credit rating and was deprived of the chance to buy what she described as her dream home.

A department store clerk whose identity had been assumed by a shoplifter spent years unsuccessfully seeking employment in the retail industry, because his identity had been used by someone convicted of shoplifting.

Source: FDIC Consumer News, Summer 2000

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Cautionary tales

A fellow consumer was paying $40 a year to have the TransUnion credit agency monitor his credit report. An identity thief got his information and used it to open new credit lines in stores, authorizing his credit with one of TransUnion’s rivals, Equifax.

The thief charged $3,000 on credit cards and spent $1,000 in telephone calls in the eight weeks before the victim caught on.

A single mother from Atlanta checked her credit report and found that someone had opened more than 25 credit card accounts, taken out loans, and filed for a marriage license under her name. The culprit turned out to be an ex-colleague that lived with her for a short while.

Source: Newsweek, 7-4-05.

Source: Newsweek, 7-4-05.

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What is identity theft

United States Department ofJustice Definition:

Identity theft and identity fraud are

terms used to refer to all types of

crime in which someone wrongfully

obtains and uses another person's

personal data in some way that

involves fraud or deception,

typically for economic gain.

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Most common types of identity theft

Government or benefits fraud and phone or utilities fraud both showed increases from the previous year.

Other Identity Theft includes categories such as medical fraud, insurance fraud, securities fraud, and rental fraud.

Source: Consumer Sentinel Network Data Book for January – December 2009, Federal Trade Commission, February 2010. Percentages are based on the total number of identity theft complaints for the calendar year. Note that 12% of identity theft complaints include more than one type of identity theft in 2009.* Includes fraud involving checking and savings accounts and electronic fund transfers.

Credit Card Fraud 17%

Government Documents or Benefits Fraud 16%

Employment-Related Fraud 13%

Phone or Utilities Fraud 15%

Bank Fraud* 10%

Loan Fraud 4%

Other Identity Theft 23%

How Victims’ Information is Misused – 2009

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Financial identity theft

Criminal identity theft

Identity cloning

Business or commercial identity theft

Medical identity theft

Different types of identity theft

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Age Group Fraud RateFraud

AmountConsumer

CostResolution Time (Hrs)

18-24 2.0% $4,588 $302 31

25-34 5.7% $4,060 $1,471 47

35-44 3.8% $5,961 $459 32

45-54 3.9% $1,892 $512 31

55-64 2.7% $5,613 $212 17

65+ 1.9% $4,148 $137 21

Identity theft victims: Age distribution

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U.S. Fraud Incidence TrendsAveraged over three years (2008 to 2010)

Significantly lower than average

Lower than average

Greater than average

Significantly greater than average

The national average is 9.1%. U.S. Bureau of Labor Statistics, not seasonally adjusted, as of December 2010Source: 2011 Identity Fraud Survey Report, Javelin Strategy & Research, February 2011.

Where does identity theft occur

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Personal info you need to protect

Credit cards and reports

Social Security card and driver’s license

ATM and telephone calling cards

Mortgage statements

Dates of birth

Passwords and PINs

Home addresses and phone numbers

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How identities are stolen

Despite the surge of online activity, for most identity theft cases, the point of compromise is still through traditional methods such as:

A close associate, friend, family, neighbor or in-home employee Lost or stolen wallets, credit cards,

and checkbooks Breached home computers, stolen mail,

and trash

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Internet schemes: Phishing and pharming

One of the increasingly common ways that criminals try to obtain personal information is by using what is called a "phishing attack." If you have email, chances are good someone has tried to get you to bite on a phishing scheme.

Phishing:

A criminal attempt to obtain personal info using email spam

Pharming:

A scam in which malicious code is installed on a personal computer or server, misdirecting users to fraudulent websites without their knowledge or consent

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Preventing identity theft

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Defend yourself online

Shield your PC and wireless router with firewalls and up-to-date software to catch viruses, spy ware and crime ware

Do not reveal any sensitive personal information on any social networking sites

Ignore and delete emails urging you to click on a link to verify account info

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Defend yourself online

Create tough-to-crack passwords for your financial accounts

Don’t let financial programs or websites auto-save your passwords

As much as you can, connect to your financial accounts only from your own PC and using secure Wi-Fi locations

Opt out of receiving unsolicited e-mail offers from Direct Marketing Association members for five years by registering at www.dmachoice.org/EMPS

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Certify your mail is safe

Have your name and address removed from the phone book

Install a locked mailbox at your residence to deter mail theft

Do not leave the envelopes containing bills you pay with checks at your mailbox

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Carefully destroy papers you throw out, especially those with sensitive or identifying information.

A crosscut paper shredder works best.

If you are away from home for an extended time, have your mail held at the post office, or ask a trusted neighbor to pick it up for you.

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When ordering new checks, pick them up at the bank.

Convert as much bill-paying as you can to automatic deductions from your checking account and/or credit account to reduce your paper waste.

Reduce risk of “dumpster diving.”

Remove your name from marketing lists of the three credit reporting bureaus – this will limit the number of pre-approved offers of credit you receive.

1-888-5OPT OUT (They will ask for your SSN!)

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Keep your conversations secure

Avoid public conversation and eavesdropping that can go along with it.

Do not say, or let anyone say, your SSN out loud in a public place.

If you receive an unsolicited phone call asking for personal info, don’t do it and listen closely to background noise.

Watch out for “shoulder surfers” who use binoculars, video or camera phones to capture information.

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Keep your conversations secure

Sign up for the FTC’s National Do Not Call Registry

www.donotcall.gov

Remove your name from the marketing lists of the three credit reporting bureaus (Experian, TransUnion, Equifax):

Dial 1-888-5OPTOUT, orGo online to www.optoutprescreen.com

As a general rule, only give out sensitive personal information face to face, never over the phone

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SERVICE WHAT IS IT?Credit Monitoring A paid service that monitors for suspicious activity or changes to your

credit file. Detects potential fraud.

Fraud Alert A message that is placed on your credit report, requiring lenders and creditors to confirm your identity before issuing a new line of credit.

Intended to prevent fraud.

Credit Freeze Locks down your credit file at the credit reporting agencies, which are prohibited from issuing credit history to any lender, creditor, etc.

Prevents fraudulent new accounts from being opened in your name.

Public Data Scanning

Scans public records and Internet sites to detect if your personal or financial information is out there.

Detects potential identity theft (your information has been found, but may or may not have been misused for financial gain…yet).

There are additional services (some that charge a fee and some at no cost) for those who want extra protection and peace of mind.

Other ways to reduce the impact of theft

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Act quickly and deliberately in resolving

the problems that arise.

Contact your credit or debit account

companies regarding the accounts that

you know—or believe—have been

tampered with or opened fraudulently.

Request replacement cards with new

account numbers from your company.

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TransUnion 1-800-680-7289

Experian1-888-397-3742

Equifax1-800-525-6285

THE THREEMAJOR

CREDIT BUREAUS


Contact all three major credit bureaus

below and place a fraud alert on your file.

There are two types of fraud alert, an

initial alert and extended alert.

In some cases, you may want to

consider a “security freeze”,

which is stronger than a fraud alert

(only available in California and 11

other states)

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Brokerage accounts don’t have the same protections as a checking/savings account. If your account has been targeted, contact your brokerage firm.

If you suspect mail fraud, notify the local postal inspector.

If a phone account was opened, contact your phone/mobile phone company, and take the same steps you would take with credit bureaus.

Contact Social Security Administration Inspector General in cases of employment/benefit/welfare fraud.

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Whether you have a passport or not, write the passport office and alert them in case anyone tries to order a passport fraudulentlySSA Fraud Hotline, P.O. Box 17768 Baltimore, MD 21235

Contact your local police department or the police dept. where the identity theft took placeReport the crime and get a copy of the report. Otherwise, you

have no proof that a crime occurred.

Contact the Federal Trade Commission and file a complaint at:www.ftc.gov/idtheft or 1-877-IDTHEFT

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TIME 2009 2008 2007 2006 2005 2004

1-6 months 64% 53% 49% 38% 34% 13%

7-12 months 17% 15% 21% 21% 21% 10%

13-18 months 8% 12% 8% 7% 12% 11%

19-23 months 0% 2% 4% 7% 12% 6%

2-5 years 5% 10% 10% 16% 6% 22%

5+ years 5% 8% 9% 11% 8% 17%

Victim’s Time Involvement

A greater number of cases are reaching resolution in the first six months.

There has been a reduction in the number of victims taking more than two years to resolve a case.

Source: Identity Theft: The Aftermath 2009, Identity Theft Resource Center, 2010.

The recovery process

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Average Consumer Cost

Source: 2011 Identity Fraud Survey Report, Javelin Strategy & Research, February 2011

The recovery process

Average consumer costs overall rose to its highest levels since 2007.

Resolution times increased across the board as well. This may be due to a cutback in 24/7 resolution services in the industry.

2003 2004 2005 2006 2007 2008 2009 2010

$606

$754

$472

$580

$767

$511

$387

$631

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Identity theft: What we have learned

DON’T GIVE IN! Identity theft is a serious and pervasive crime in the United States

What you can do to prevent identity theft in your life

The steps you should take if your identity is stolen

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Consumer Sentinel (maintained by FTC)An international, multi-agency joint project, Consumer Sentinel enhances cross-border consumer education and prevention efforts.

FDIC (Federal Deposit Insurance Corporation)Independent agency created by Congress that maintains stability and public confidence in the nation’s financial system by insuring deposits, examining and supervising financial institutions, and managing receiverships.

Better Business BureauDedicated to creating an ethical marketplace where buyers and sellers can trust each other, and fostering fair, honest relationships between businesses & consumers.

FTC (Federal Trade Commission)The FTC deals with a broad range of issues that touch the economic lives of all Americans.

Resources

Questions

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Documents

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