Stories of Stolen Identities and Doing Nothing Wrong | Scams and Frauds Series by Larry Goldsmith – Part Two

As the holiday season is approaching, we wanted to share a NEW Info-Series with you highlighting some of the scams and frauds that are running rampant in today’s day and age. We hope this series, written by Larry G. Goldsmith, will help raise your awareness to these scammers’ newest tactics and provide you with tips to avoid being their next victim. 

Each week, Larry will share a story or two about a specific type of scam or fraud, as well as what you can do about it if you suspect you’ve already been a victim. We hope you find this series helpful and insightful. Stay safe out there! 

[Larry G. Goldsmith, JD, CPA, MAFF is a financial forensic accountant as well as a published author, licensed attorney, and certified public accountant.]

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Last time, I shared how commonplace it is to have your identity stolen. To follow are two different stories that highlight how your identity can be stolen, followed by a cautionary tale. In each instance, the person did nothing wrong, but still ended up the victim:

• A close friend called to say that someone used their name and credit to purchase three vehicles with bank financing without their permission or knowledge. They learned of the fraud quite by chance. It was a fluke that the victim was refinancing their home at that time, which alerted them to the situation. (Note: A credit freeze or a reporting service would have prevented the fraudsters from acquiring the cars.) It took months of aggravation and hours for my friend to prove that he didn’t buy the cars and to absolve themselves of the financial burdens and stress. In the end, the police were only able to recover one of the vehicles.

• Closer to home, I read that my bank had been hacked but I didn’t think twice about it because the bank issued a statement that the hack had been of no consequence and all the depositors’ data was safe. A month later, I came home at an unusual hour for me just when a Federal Express envelope was being delivered. I brought it into the house and called my wife and asked her who Mr. Jones was. Apparently, Mr. Jones and my wife had been approved for a half million-dollar loan with funds to be deposited in a new joint account in their names. By arriving home early, I acquired the loan documents before the fraudster could show up at my home and forge my wife’s signature. If I didn’t discover the package first, the fraudster would have dropped the signed loan agreement off at the bank and started withdrawing money without my wife ever knowing that the loan had been acquired. My wife called the bank’s fraud department and met with a branch manager. We later learned that all our personal and financial information had been a casualty of the bank hack. We had to close all our bank accounts and reopen new ones. A credit freeze may have prevented the bank from processing a loan.

• I am often asked if a homeowner should pay a home repairman in cash so that they receive a discount. My advice is always: NO! Let’s say you terminate their services because you didn’t like the contractor’s quality of work. If you paid in cash, some unscrupulous contractors will say they were never paid. Others may not pay for the materials or the subcontractors (subs) they used on your job. As a result, the contractor, their subs, or the companies supplying the materials can place a lien on a homeowner’s home if they report that they haven’t been paid, regardless of whether the homeowner is aware of the alleged non-payment. They can then seek a court order to sell your residence.

My recommendation: If it is a large job, go through a title company and have the contractor and his subs sign lien waivers. If it’s a smaller job, pay the contractor with a check and have the payments broken into percentage of completion installments. With each payment have the contractor sign off and state the percentage of work performed. Have the contractor provide you with a final lien waiver when the job is completed. You can find blank forms for all of this online.

In order to prevent being the victim of scams and frauds like these, it is important to review and examine your credit report several times a year. One time, I discovered an individual planning to obtain credit in my name by establishing a secondary address for me with the credit bureaus. I can only assume they planned to acquire credit by having the credit cards mailed to this secondary address that I didn’t know existed. Had I not checked my credit report, I wouldn’t have known.

By law, credit reporting companies will provide you with one report, once a year, free of charge. This is the minimum you should do if you want to avoid being a victim of fraudsters.