Eliminate Risk, Says Frank Abagnale

Image by Tanya Ryno via FlickrThe United States loses $660 billion annually from white-collar crimes, says Frank Abagnale, the former con man who served time in American, French, and Swedish prisons for stealing millions of dollars, before his recruit by the FBI to teach law enforcement agents how to prevent and deter identity theft and fraud.

Abagnale, the inspiration for the Steven Spielberg-directed and Leonardo DiCaprio-starring film, “Catch Me If You Can,” was today’s keynote speaker at a Government Technology Magazine-sponsored summit in Albany, New York.

He outlined 3 tips to reduce identity theft:

1. Shred your sensitive documents. Use a micro-cut shredder, the type that turns any inserted document or credit card into confetti that is impossible to piece together.

   If you don’t use a micro-cut (or cross-cut) shredder, he could re-assemble your shredded document in 8 hours.

2. Monitor your credit, but never freeze it. When hiring a firm to monitor your credit, verify they are monitoring Equifax, Experian, and TransUnion; and that all notifications come to you in real-time, not every quarter.
3. Pay for everything with a credit card. Never use paper checks nor debit cards.

   “I put everything on that credit card,” he says, adding that most companies who accept checks as payment require a social security number, driver’s license, and/or date of birth as supplemental data written on the check. Nine U.S. states, he said, currently use the social security number as a driver’s license number.

   He doesn’t expose his money to risk. By using a credit card and not a debit card that merely uses his own money to pay for items, “I spend their money” while his money sits in an interest-bearing account.

Protect who you are. Unless the government or a financial institution asks for identifying information, don’t give it away.

“Stop giving away information about yourself,” Abagnale says. “If you’re giving someone a credit card, why do you also give away your social security number and date of birth?”

Companies are also at risk, not only consumers.

He referred to the fact that you can call a company, ask for accounts receivable, and receive over the phone wiring instructions including the bank name and ABA routing number. You can also call corporate communications and request a full-color copy of the annual report.

Enterprising individuals can then take the wiring information and the corporate logo and create a fake check, but who would be the wiser?

It’s all about ethics.

At a time when 4-year colleges do not offer bachelor’s programs in Ethics, is it any surprise the white-collar crime rate is so high?

For instance, as Abagnale cited, a mortgage banker will ask you to lie about your salary to guarantee a loan. The banker sends the paperwork to the investor, and when asked if the salary was checked, the banker will lie and say yes.

In another example, a $5 million cigarette heist was caused by an inside employee who was paid $1 million to steal corporate data about supply chain management and trucking routes.

Of the Fortune 500 firms, 48% do not have a code of ethics.

Synthetic identity theft is the next big thing.

Credit agencies build tolerance for typographic errors into their reporting.

As Abagnale said, suppose, for instance, that you knew John’s name and social security number. You could change John’s name and number, by one letter and one digit, and request every month that so much is withdrawn from his account and deposited into yours.

The credit agency will assume you are John and made a mistake, so a secondary file will be created.

When you stop the withdrawals and the credit file is closed, John will be asked to pay while you are scot-free as nobody knows who you are.

To sum, protect your identity both online and off.

Invest in a micro-cut shredder, don’t freeze your credit, use credit cards and cash only, don’t give away information about yourself, be ethical, and stand on the lookout for synthetic theft.

“It’s much easier and wiser to eliminate risk,” said Abagnale.

What do you think?

You can see more information about him and some of his reports at abagnale.com.

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