Numbers…Numbers…Numbers
We live in an information age. At every turn we are asked to produce
the threads of data that add up to produce a fabric of our identity. Numbers,
numbers, numbers….we yield credit card data, our social security numbers,
our driver licenses at the shopping mall, to rental car agencies, to online
marketers and at the grocery checkout stands.
"...identifying
information is collected from the millions of customers to whom
MLM distributors sell products ... or place drop-ship orders." |
The “information monster” is hungry and has not overlooked the millions
of distributors involved in MLM, Direct Sales, Network Marketing and Party
Plan businesses. Social Security identification must be collected by law
so that MLM companies can issue form 1099 reports to the IRS for their
independent contractors. Credit card information is essential to process
online and telephone orders. Individual banking information is required
to establish automatic debit of check accounts for auto ship programs.
And of course, credit card, address, telephone, email and other identifying
information is collected from the millions of customers to whom MLM distributors
sell products or for whom Direct Sales distributors place drop ship orders.
Too Much Information
Being awash in a sea of information has its consequences. In a computer
driven and highly technological society, such easily retrievable data
fuels conventional commerce as well as e-commerce. In an ideal world of
completely honest souls, no unintended problems would occur. However,
welcome to the real world where small legions of thieves stand ready to
steal and manipulate your information for financial gain. Call it credit
card fraud, banking fraud, or any other type of fraud, the end game has
come to be known as “identity theft.”
Identity theft is a serious crime in which misappropriated personal information
is used to rob you when you are completely unaware. Each year millions
of individuals are affected, often spending months or years to clean up
their credit record. All of life’s activities ranging from loans to educational
opportunities, to housing, car ownership or credit card usage may be impacted.
In some odd instances, individuals may even be arrested mistakenly for
crimes they did not commit.
Ask Your MLM Company
Although your interaction with a MLM, Direct Sales, Network Marketing
or Party Plan company may represent only a fraction of your daily financial
experience, it is reasonable to inquire of mechanisms implemented by the
company to protect your privacy and information. A call or inquiry to
Distributor Relations or Operations should yield some comfort when you
are informed of systems in place to protect your information. You will
likely be informed that all internet and ecommerce transactions are secure
and encrypted. You should also be informed of security and privacy policies
instituted by the MLM company to safeguard information.
One specific area of concern by distributors has been the use of Social
Security numbers as the same number for distributor identification. Although
common practice in the past and in a more honest world, this approach
is being rethought by forward thinking Direct Sales companies that now
encrypt such information or issue distributor identification numbers that
do not reveal Social Security data. For instance, an early leader in this
practice, Florida based National Companies, a leading Direct Sales company
that markets consumer benefits services, was nominated for a prestigious
Direct Selling Association award of excellence after being one of the
first network marketing companies to implement a broad reaching privacy
program for distributors and customers to specifically combat identity
theft. The hallmark of the program was the substitution of coded distributor
identification numbers rather than taxpayer identification numbers.
Enter the FTC
The problem of identity theft obviously impacts the life of the MLM distributor
in ways far broader than their MLM experience. In everyday affairs, individuals
are exposed to this financial scourge. The FTC has taken a leading role
in both education and enforcement on this subject. The following highly
practical information is set forth in the FTC’s own published advice on
the subject of identity theft:
How Identity Theft Occurs
Skilled identity thieves use a variety of methods to gain access
to your personal information. For example:
- They get information from businesses or other institutions
by:
- stealing records from their employer,
- bribing an employee who has access to these records,
or
- hacking into the organization’s computers.
- They rummage through your trash, or the trash of businesses
or dumps in a practice known as “dumpster diving.”
- They obtain credit reports by abusing their employer’s authorized
access to credit reports or by posing as a landlord, employer,
or someone else who may have a legal right to the information.
- They steal credit and debit card numbers as your card is
processed by using a special information storage device in a practice
known as “skimming.”
- They steal wallets and purses containing identification and
credit and bank cards.
- They steal mail, including bank and credit card statements,
pre-approved credit offers, new checks, or tax information.
- They complete a “change of address form” to divert your mail
to another location.
- They steal personal information from your home.
- They scam information from you by posing as a legitimate
business person or government official.
Once identity thieves have your personal information, they may:
- Go on spending sprees using your credit and debit card account
numbers to buy “big-ticket” items like computers that they can
easily sell.
- Open a new credit card account, using your name, date of
birth, and SSN. When they don’t pay the bills, the delinquent
account is reported on your credit report.
- Change the mailing address on your credit card account. The
imposter then runs up charges on the account. Because the bills
are being sent to the new address, it may take some time before
you realize there’s a problem.
- Take out auto loans in your name.
- Establish phone or wireless service in your name.
- Counterfeit checks or debit cards, and drain your bank account.
- Open a bank account in your name and write bad checks on
that account.
- File for bankruptcy under your name to avoid paying debts
they’ve incurred, or to avoid eviction.
- Give your name to the police during an arrest. If they are
released and don’t show up for their court date, an arrest warrant
could be issued in your name.
How Can I Tell if I’m a Victim of Identity Theft?
Monitor the balances of your financial accounts. Look for unexplained
charges or withdrawals. Other indications of identity theft can
be:
- failing to receive bills or other mail signaling an address
change by the identity thief;
- receiving credit cards for which you did not apply;
- denial of credit for no apparent reason; or
- receiving calls from debt collectors or companies about merchandise
or services you didn’t buy.
Are There Any Other Steps I Can Take?
If an identity thief is opening new credit accounts in your
name, these accounts are likely to show up on your credit report.
You can find out by ordering a copy of your credit report from any
of three major credit bureaus. If you find inaccurate information,
check your reports from the other two credit bureaus. Of course,
some inaccuracies on your credit reports may be because of computer,
clerical, or other errors and may not be a result of identity theft.
Note: If your personal information has been lost or stolen,
you may want to check all of your reports more frequently for the
first year. Federal law allows credit bureaus to charge you up to
$9 for a copy of your credit report. Some states may allow a free
report or reduced rates.
Managing Your Personal Information
So how can a responsible consumer minimize the risk of identity
theft, as well as the potential for damage? When it involves your
personal information, exercise caution and prudence.
Do It Now
Place passwords on your credit card, bank and phone accounts.
Avoid using easily available information like your mother’s maiden
name, your birth date, the last four digits of your SSN or your
phone number, or a series of consecutive numbers. When you’re asked
for your mother’s maiden name on an application for a new account,
try using a password instead.
Secure personal information in your home, especially if you
have roommates, employ outside help, or are having service work
done in your home.
Ask about information security procedures in your workplace.
Find out who has access to your personal information and verify
that your records are kept in a secure location. Ask about the disposal
procedures for those records as well.
Everyday Diligence
Don’t give out personal information on the phone, through the
mail, or over the Internet unless you’ve initiated the contact or
are sure you know who you’re dealing with. Identity thieves can
be skilled liars, and may pose as representatives of banks, Internet
service providers (ISPs), or even government agencies to get you
to reveal identifying information. Before you divulge any personal
information, confirm that you’re dealing with a legitimate representative
of a legitimate organization. Double check by calling customer service
number on your account statement or in the telephone book.
Guard your mail and trash from theft. Deposit outgoing mail
in post office collection boxes or at your local post office instead
of an unsecured mailbox. Remove mail from your mailbox promptly.
If you’re planning to be away from home and can’t pick up your mail,
call the U.S. Postal Service at 1-800-275-8777 to ask for a vacation
hold. To thwart a thief who may pick through your trash or recycling
bins, tear or shred your charge receipts, copies of credit applications
or offers, insurance forms, physician statements, checks and bank
statements, and expired charge cards.
Before revealing any identifying information (for example, on
an application), ask how it will be used and secured, and whether
it will be shared with others. Find out if you have a say about
the use of your information. For example, can you choose to have
it kept confidential?
Keep your Social Security card in a secure place and give your
SSN only when absolutely necessary. Ask to use other types of identifiers
when possible. If your state uses your SSN as your driver’s license
number, ask to substitute another number.
Limit the identification information and the number of credit
and debit cards that you carry to what you’ll actually need.
Keep your purse or wallet in a safe place at work.
Consider Your Computer
Your computer can be a goldmine of personal information to an
identity thief. Here’s how you can safeguard your computer and the
personal information it stores:
- Update your virus protection software regularly. Computer
viruses can have damaging effects, including introducing program
code that causes your computer to send out files or other stored
information. Look for security repairs and patches you can download
from your operating system’s Web site.
- Don’t download files from strangers or click on hyperlinks
from people you don’t know. Opening a file could expose your system
to a computer virus or a program that could hijack your modem.
- Use a firewall, especially if you have a high-speed or “always
on” connection to the Internet. The firewall allows you to limit
uninvited access to your computer. Without a firewall, hackers
can take over your computer and access sensitive information.
- Use a secure browser — software that encrypts or scrambles
information you send over the Internet — to guard the safety of
your online transactions. When you’re submitting information,
look for the “lock” icon on the status bar. It’s a symbol that
your information is secure during transmission.
- Try not to store financial information on your laptop unless
absolutely necessary. If you do, use a “strong” password — that
is, a combination of letters (upper and lower case), numbers,
and symbols.
- Avoid using an automatic log-in feature that saves your user
name and password; and always log off when you’re finished. If
your laptop gets stolen, the thief will have a hard time accessing
sensitive information.
- Delete any personal information stored on your computer before
you dispose of it. Use a “wipe” utility program, which overwrites
the entire hard drive and makes the files unrecoverable.
- Read Web site privacy policies. They should answer questions
about the access to and accuracy, security, and control of personal
information the site collects, as well as how sensitive information
will be used, and whether it will be provided to third parties.
A Special Word About Social Security Numbers
Very likely, your employer and financial institution will need
your SSN for wage and tax reporting purposes. Other private businesses
may ask you for your SSN to do a credit check, such as when you
apply for a car loan. Sometimes, however, they simply want your
SSN for general record keeping. If someone asks for your SSN, ask
the following questions:
- Why do you need it?
- How will it be used?
- How do you protect it from being stolen?
- What will happen if I don’t give it to you?
If you don’t provide your SSN, some businesses may not provide
you with the service or benefit you want. Getting satisfactory answers
to your questions will help you to decide whether you want to share
your SSN with the business.
If Your Identity’s Been Stolen
Even if you’ve been very careful about keeping your personal
information to yourself, an identity thief can strike. If you suspect
that your personal information has been used to commit fraud or
theft, take the following four steps right away. Remember to follow
up all calls in writing; send your letter by certified mail, return
receipt requested, so you can document what the company received
and when; and keep copies for your files.
- Place a fraud alert on your credit reports and review
your credit reports.
Call the toll-free fraud number of anyone of the three major credit
bureaus to place a fraud alert on your credit report. This can
help prevent an identity thief from opening additional accounts
in your name. As soon as the credit bureau confirms your fraud
alert, the other two credit bureaus will automatically be notified
to place fraud alerts on your credit report, and all three reports
will be sent to you free of charge.
- Equifax - To report fraud, call: 1-800-525-6285,
and write: P.O. Box 740241, Atlanta, GA 30374-0241
- Experian - To report fraud, call:1-888-EXPERIAN
(397-3742), and write: P.O. Box 9532, Allen, TX 75013
- TransUnion - To report fraud, call:1-800-680-7289,
and write: Fraud Victim Assistance Division, P.O. Box 6790,
Fullerton, CA 92834-6790
Once you receive your reports, review them carefully. Look
for inquiries you didn’t initiate, accounts you didn’t open, and
unexplained debts on your true accounts. You also should check
that information such as your SSN, address(es), name or initial,
and employers are correct. Inaccuracies in this information also
may be due to typographical errors. Nevertheless, whether the
inaccuracies are due to fraud or error, you should notify the
credit bureau as soon as possible by telephone and in writing.
You should continue to check your reports periodically, especially
in the first year after you’ve discovered the theft, to make sure
no new fraudulent activity has occurred. The automated “one-call”
fraud alert process only works for the initial placement of your
fraud alert. Orders for additional credit reports or renewals
of your fraud alerts must be made separately at each of the three
major credit bureaus.
- Close any accounts that have been tampered with or opened
fraudulently.
Credit Accounts Credit accounts include all accounts with
banks, credit card companies and other lenders, and phone companies,
utilities, ISPs, and other service providers.
If you’re closing existing accounts and opening new ones,
use new Personal Identification Numbers (PINs) and passwords.
If there are fraudulent charges or debits, ask the company
about the following forms for disputing those transactions:
- For new unauthorized accounts, ask if the company accepts
the ID Theft Affidavit (available at
www.ftc.gov/bcp/conline/pubs/credit/affidavit.pdf). If they
don’t, ask the representative to send you the company’s fraud
dispute forms.
- For your existing accounts, ask the representative to send
you the company’s fraud dispute forms.
- If your ATM card has been lost, stolen or otherwise compromised,
cancel the card as soon as you can. Get a new card with a new
PIN.
Checks
If your checks have been stolen or misused, close the account
and ask your bank to notify the appropriate check verification
service. While no federal law limits your losses if someone steals
your checks and forges your signature, state laws may protect
you. Most states hold the bank responsible for losses from a forged
check, but they also require you to take reasonable care of your
account. For example, you may be held responsible for the forgery
if you fail to notify the bank in a timely way that a check was
lost or stolen. Contact your state banking or consumer protection
agency for more information.
You also should contact these major check verification companies.
Ask that retailers who use their databases not accept your checks.
- TeleCheck - 1-800-710-9898 or 927-0188
- Certegy, Inc. - 1-800-437-5120
- International Check Services - 1-800-631-9656
Call SCAN (1-800-262-7771) to find out if the identity thief
has been passing bad checks in your name.
- File a report with your local police or the police in
the community where the identity theft took place.
Keep a copy of the report. You may need it to validate your claims
to creditors. If you can’t get a copy, at least get the report
number.
- File a complaint with the FTC.
By sharing your identity theft complaint with the FTC, you will
provide important information that can help law enforcement officials
track down identity thieves and stop them. The FTC also can refer
victim complaints to other appropriate government agencies and
companies for further action. The FTC enters the information you
provide into our secure database.
To file a complaint or to learn more about the FTC’s Privacy
Policy, visit www.consumer.gov/idtheft.
If you don’t have access to the Internet, you can call the FTC’s
Identity Theft Hotline: toll-free 1-877-IDTHEFT (438-4338); TDD:
202-326-2502; or write: Identity Theft Clearinghouse, Federal
Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC
20580.
The FTC works for the consumer to prevent fraudulent, deceptive
and unfair business practices in the marketplace and to provide
information to help consumers spot, stop, and avoid them. To file
a complaint or to get free information on consumer issues, visit
www.ftc.gov or call toll-free,
1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC
enters Internet, telemarketing, identity theft, and other fraud-related
complaints into Consumer Sentinel, a secure, online database available
to hundreds of Il and criminal law enforcement agencies in the
U.S. and abroad.
|
Bottom-line: Be Careful
Obviously, there is no fool proof way to prevent identity theft. However,
MLM distributors and their companies can engage in prudent and careful
behavior to minimize this tremendous abuse of individuals and our economic
system. In the end, the watch words must be “Be Careful, be cautious and ask
questions.” |
