Credit

Ben Bernanke is a victim of identity theft. This is proof positive that it can happen to anyone.

Ben Bernanke - the Federal Reserve Board chairman - was one of hundreds of victims of an elaborate identity-fraud ring, headed by a convicted scam artist known as "Big Head," that stole more than $2.1 million from unsuspecting consumers and at least 10 financial institutions around the country.

How Did It Happen?

On August 7, 2008, Anna Bernanke - Ben Bernanke's wife - was at a Starbucks when her purse was stolen off the back of her chair.

What Was in Her Purse?

It's not good...

• Driver's License (no problem)
• Four credit cards (not so great - the fewer the better)
• Checkbook (no problem)
• Social Security card (OUCH!!!)

So the thieves had Mrs. Bernanke's SSN, Date of Birth (from the Driver's License), home address, and home phone (from the checks). This is the perfect combination of personal data.

It goes without saying that you should never carry your Social Security card in your purse or wallet. It should be tucked away in a very safe place at home or in a bank lock box. You should also limit the number of credit cards you carry. Just think of how many banks you'd like to call and/or fraudulent transactions you want to deal with and limit your cards accordingly.

Who Were the Thieves?

The thieves were part of a crime ring called "The Cannon to the Wiz." Here is the entry from the Urban Dictionary for "cannon":

Cannon - Old school term for a skilled pickpocket. "Stumpy is a real class cannon - he can clean out a vic's pockets faster than a flatfoot can eat a donut!"

These thieves were after personal information as well as checks and credit cards. They worked in government or medical offices or were simple pickpockets or mail thieves. They attended major sporting events in order to target victims with wallets and purses full of loot. One such victim was Donna Pendergast - an assistant Michigan Attorney General. Her experience went like this:

The robber was so adroit he managed to lift the wallet from her purse without her even knowing it. "They took it right out of my purse while it was on my shoulder," she said. "I didn't feel a thing."

Have They Been Caught?

Yes and no.

Federal agents busted the identity theft ring this summer, but George Lee Reid - the one who fraudulently used the Bernanke's checks to steal $9,000 - had the charges dropped against him, but the Feds are now searching for him again on related charges.

More information on this story from Newsweek.

Of all the worries that parents of young children face, few would rank the prospect of their 7-year-old opening up six credit cards and running up $35,000 in debt as one of the most pressing. But increasingly, parents and young adults are struggling with a very similar reality these days — only the children themselves aren't to blame, identity thieves are.

Last week, two stories of childhood identity theft hit the headlines...

• In Florida, a woman was accused of opening up a Capital One credit card under her daughter's name, and then using the card until the girl's father began to notice collection notices being sent to their home.
• In California, a man was discovered to be using the identity of a 4-year old who died in 1984. He was caught after using the deceased child's name to buy a home, a car, and to obtain several credit cards.

A Growing Problem

According to the Federal Trade Commission, there were more than 34,000 incidents of childhood identity theft reported between 2005 and 2007. The figure makes up about 5 percent of all identity thefts.

Chiefly to blame is a credit check system that at no time makes an effort to verify the age of individuals. With nothing but a Social Security number, thieves are often able to gain a credit history by finding creditors who don't require a photo ID or birth certificate. The first age that goes into a system like Trans Union, Experian, or Equifax, becomes permanently associated with the applicant's name and Social Security number.

Here's how John Moira, the father of the girl who had her identity stolen by her mother, describes it:

"My heart dropped, I couldn't believe it," said John Moisa, who became suspicious when he received correspondence from the credit card company addressed to his daughter. "At first I didn't think about it until my mom said she was getting collection calls at her house."

Moisa called the credit card company, which wouldn't initially talk to him until he faxed proof of his daughter's age. Moisa said he's spent the past several months trying to repair the girl's credit.

"It was unpaid, past-due bills, so it didn't look good," Moisa said.

Parents Are the Best Protectors (and Most Likely Culprits)

Some experts estimate that around half of childhood identity theft is committed by parents and relatives with access to a full range of information and documentation associated with a child. Other reports point to teachers, administrators, coaches, babysitters, and others with easy access to documents and records. (Some teachers have even been known to have pupils write their social security numbers on all homework and tests, exposing students anyone who bothers sifting through the school's wastepaper baskets.)

With a down economy, parents and family members might be more likely to turn to identity theft as a way getting their hands on additional credit.

"The majority of cases involve parents who may be going through a tricky time, going through a divorce and looking for additional credit," said Purl, Chief Operating Officer for Grand ISS, a St. Petersburg-based investigative security firm.

Purl said with more people out of work, identity theft cases involving young children are likely to increase.

"I think we're going to see more crime in general, as money is more tight for people. We've seen that with credit card fraud and white-collar crime. It's an easy way to make money," Purl said.

How Can We Protect Our Kids?

It's becoming increasingly important for parents to help their kids get savvy about giving away personal information on the internet, or over the telephone. Beyond that, responsibility falls on parents to be vigilant about who they send copies of birth certificates to, and to notice things like debt consolidation notices coming in the mail addressed to their children.

For more on how to prevent childhood identity theft and what to do if you think your child has been targeted, check out this fact sheet from the Identity Theft Resource Center - www.idtheftcenter.org.

Charles Darrow patented Monopoly in 1935. Since then, millions of people have turned giddy when receiving the "Bank Error in Your Favor" card from Community Chest.

Unfortunately, bank errors are nothing but a hassle in real life - the only thing you collect is a headache and frustration. To help reduce the headache, here are 10 things that everyone should know about bank errors:

Be Patient
The problem will not be solved over night. Banks process many transactions every day and it may take a few days for them to track down and solve your problem.

Be Quick
Call in the error to the bank supervisor (there isn't much that a teller can do) as soon as you discover it. The sooner the bank can start looking into it the better.

Keep Notes
Keep quality notes of who you talk to, when you talked to them, and what was said/promised. You may need to make several phone calls and it helps to be able to clearly state who you spoke with and what was said. You also may be required to provide documentation somewhere down the line of what you did. Good records will help make this as painless as possible.

Know the End Game
Ask for a date when the problem should be resolved. This will help keep the bank focused on solving your problem in a timely way.

Dodge Bounced Check Fees
If the mistake is an under deposit (you end up with less money than you thought), you should ask the bank to cover any fees that may occur because of the shortage of funds. The bank should cover fees to fix the problem and any others that occur because the correct amount of funds was not in the account

Don't Spend the Bank's Money
If there is an over deposit, don't spend the money. It might be tempting if the bank accidently deposits an extra $10,000 in your account. Unfortunately the money isn't yours and you shouldn't assume that the bank is going to let you keep it. If you do spend it you are just going to have to give it back - possibly with penalties or jail time if you can't return the money in a timely fashion.

Don't Move the Bank's Money
Don't be tempted to move the money to your brokerage account so you can make some nice interest or buy one of your favorite stocks. Leave the money in the account so the bank can figure out how it got there. Don't take the money out of the account so you don't spend it. The bank needs it there to track where it came from. Also, the money needs to be in your account when the bank figures out where it goes and decides to move it out of your account.

Stop Dreaming
The bank's not going to let you keep the money. Yes, the bank makes errors, but they are not going to let you keep somebody else's money because they made an error. Get over it. Stop dreaming about that Hawaiian vacation or a mall spending spree. It's not your money.

Complain or Switch
Some people seem to have bad luck when it comes to bank errors. I've been lucky and have had very few, but if you're having to deal with a lot of errors you should complain. Call customer support and ask to speak with a supervisor. Let them know how much of a hassle these errors have been. Have a reward in mind for how they can keep you as a customer. If you have a credit card, ask them to lower the interest rate. If you're paying monthly bank fees for your account, ask them to wave them.

If they're unwilling to do anything for you it's probably time to move to a new bank.

Act Fast on ATM Issues
You only have 60 days to report an ATM transaction error. So, if the ATM records show that you took out more money than you actually did or vice versa, you must report it promptly or you are out of luck.

A bank error is not the joyous occasion that Monopoly suggests. It's more like a "Go Directly to Faceless Corporate Bank Hell" card. Follow these ten steps, however, and you'll survive mostly unscathed.

One more thing...

We've noticed on a different blog post - British Lottery Scam - that people are tempted to take a bad check and deposit it, hoping that the bank will become confused and give them the money. Here's how one poster puts it:

I received the lottery scam in the mail. There is a check enclosed that is to be cashed and sent back to pay the British taxes. What would happen if I cashed the check and kept the cash? Would the scammers loose the money?

Ummm... no. Checks like these are forgeries. The scammers don't loose money. You just create a problem for yourself by depositing a bad check, temporarily inflating your bank account, and then suddenly having it removed once the bank figures out it's fraudulent.

Does that sounds fun?

To learn more about bank errors, visit the always excellent bankrate.com.

To shred or to tear: that is the question. Robert Cockerham of cockeyed.com decided to put the matter to a test. His test subject? A newly received Chase Mastercard pre-approved application.

Step 1: Robert tears the application into small pieces.

Step: 2: Robert meticulously lines the torn pieces up and tapes them together, like so.

Step 3: Robert fills out the application, replacing the current billing address with a new one (his parent's house) and using his cell phone as the phone number on the new account.

With that, he mails it in.

Step 4: Robert excitedly receives his new credit card at his parent's house and activates it using his cell phone.

Analysis:

• Tearing up your sensitive documents is not sufficient.
• Some creditors will process applications, even if they've been torn up, taped together and have a new address.
• A criminal could easily apply for credit in your name, change the address, and activate the account via a pre-paid cell phone. You wouldn't even know what happened until creditors started calling you about your unpaid bills.
• You must destroy all sensitive documents using a cross-cut shredder before placing them in the trash.
• Better yet, opt-out of pre-approved offers and give your shredder and the recyclers a rest.

Read the whole story on Cockeyed.com.