Agency issues alert concerning pretexting
April 30, 2009 · Updated 4:03 PM
The Federal Trade Commission published the following reports on pretexting and the law prohibiting the practice.
How Pretexting Works
Pretexting is the practice of getting someone's personal information under false pretenses. Pretexters sell information to people who may use it to get credit in another person's name, steal assets, or to investigate or sue. Pretexting is against the law.
Pretexters use a variety of tactics to get personal information. For example, a pretexter may call, claim he's from a survey firm, and ask a few questions. When the pretexter has the information he wants, he uses it to call a person's financial institution. He pretends to be that person or someone with authorized access to an account. He might claim that he's forgotten his checkbook and needs information about his account. In this way, the pretexter may be able to obtain personal information such as a Social Security number, bank and credit card account numbers, a credit report, and the existence and size of savings and investment portfolios.
Keep in mind that some information may be a matter of public record, such as whether someone owns a home, pays real estate taxes, or has filed for bankruptcy. It is not pretexting for another person to collect this kind of information.
Under the federal law - the Gramm-Leach-Bliley Act - it's illegal for anyone to:
use false, fictitious or fraudulent statements or documents to get customer information from a financial institution or directly from a customer of a financial institution.
use forged, counterfeit, lost, or stolen documents to get customer information from a financial institution or directly from a customer of a financial institution.
ask another person to get someone else's customer information using false, fictitious or fraudulent statements or using false, fictitious or fraudulent documents or forged, counterfeit, lost, or stolen documents.
The Link to Identity Theft
Pretexting can lead to "identity theft." Identity theft occurs when someone hijacks personal information to open new charge accounts, order merchandise or borrow money. Consumers targeted by identity thieves usually don't know they've been victimized until the hijackers fail to pay the bills or repay the loans and collection agencies begin dunning the consumers for payment of accounts they didn't even know they had.
According to the Federal Trade Commission, the most common forms of identity theft are:
Credit Card Fraud - a credit card account is opened in a consumer's name or an existing credit card account is "taken over"
Communications Services Fraud - the identity thief opens telephone, cellular, or other utility service in the consumer's name
Bank Fraud - a checking or savings account is opened in the consumer's name, and/or fraudulent checks are written, and
Fraudulent Loans - the identity thief gets a loan, such as a car loan, in the consumer's name.
Under the Identity Theft Act, a name or SSN is considered a "means of identification." So is a credit card number, cellular telephone electronic serial number or any other piece of information that may be used alone or in conjunction with other information to identify a specific individual.
Don't give out personal information on the phone, through the mail or over the Internet unless you've initiated the contact or know who you're dealing with. Pretexters may pose as representatives of survey firms, banks, Internet service providers and even government agencies to get you to reveal your SSN, mother's maiden name, financial account numbers and other identifying information. Legitimate organizations have the information they need and will not ask you for it.
Be informed. Ask financial institutions for their policies about sharing information. Ask them specifically about their policies to prevent pretexting.
Pay attention to statement cycles. Follow up with financial institutions if statements don't arrive on time.
Review statements carefully and promptly. Report any discrepancies to your institution immediately.
Keep items with personal information in a safe place. Tear or shred charge receipts, copies of credit applications, insurance forms, bank checks and other financial statements, expired charge cards and credit offers received in the mail.
Add passwords to credit card, bank and phone accounts. Avoid using easily available information like a mother's maiden name, birth date, the last four digits of a Social Security number, a phone number or a series of consecutive numbers.
Be mindful about where personal information is left in your home, especially if there are roommates or work is done in the home by others.
Find out who has access to personal information at work and verify that the records are kept in a secure location.
Order a copy of your credit report from each of the three major credit reporting agencies every year. Make sure it's accurate and includes only those activities you've authorized. The law allows credit bureaus to charge up to $9 for a copy of a credit report.
Credit reports contains information on where people work and live, their credit accounts, how they pay their bills and whether they've been sued, arrested or filed for bankruptcy. Checking reports periodically can help a person catch mistakes and fraud before they wreak havoc on personal finances.
More information about pretexting is available at www.ftc.gov/bcp/conline/pubs/credit/pretext.htm