How to keep thieves from using fraud to steal from you

November 12, 2008 2:33 PM

A question about someone impersonating my uncle to steal money from his checking account, and how to guard against future attacks.

Late this summer, someone went to my uncles local bank and wrote a counter-check for a couple of hundred dollars from his checking account. Seeing that it worked fine, later that day the thief came back and wrote another counter-check for a couple thousand.

My uncle didn't notice until he was going over his bank statements a couple of weeks later.

Apparently, the person who stole the money had his account number and a driver's license with his name (and maybe license number—if the bank checks that) on it. My uncle still has his driver's license so obviously the license they showed was a fake.

Once my uncle found out, he went in to the bank and filled out the necessary paperwork so that he would get his money back. He also closed the account and opened a new one with (obviously) a different account number.

So he's getting a new account number, a new debit card, and new checks (which he's having sent to his branch for pickup). He also asked the teller to put a "codeword" on his account, the thought being that if someone came in, they'd need this codeword to take anything out.

He went to the DMV telling them that someone was going around with a fake version of his license and he wanted to get a new one. He was told that the DMV doesn't do that. The DMV did suggest that he file a report with the police, but it was unclear whether this would help him get a new license or if they were just saying that he should go to the police in general.

He did go to the police, and he filled out a report. The person who helped him there said that usually when something like this happens, the person takes out some cash and then skips town.
(I guess the idea being that it's easier for these people to take cash on one day and get away, rather than get overly greedy, staying days at the trough, and get caught)

A few days ago my uncle tried to open up a new account at a department store and was told he was unable to do so—so it sounds like his name is "flagged" or something (which sounds like a good thing).

As far as his checking account number, my thinking is that anyone who's ever seen or gotten one of his checks could have that.

As far as the license info, the only thing he could think of was that he gets his house cleaned every so often and someone could've gotten it then.

So, here are my questions:

- What have we not thought of that would lower/keep this from happening in the future?

- Can banks really put a rock-solid "codeword" on an account, or was that the teller just patting him on the head?

- If someone comes into a bank without a bank card, but with the account number and a driver's license, does the bank just check the name and photo on the license or do they actually check the driver's license number against the one on file as well? The answer to this might give us a better idea as to whether the thief had my uncles correct license number on their fake license.

- In a situation like this, can my uncle get a new (Oregon) driver's license number?

- The bank says that they don't have cameras that would allow them to go back and look at the thief—my guess is that they do, but they would rather just cut a check for a couple of thousand bucks (or fill out the paperwork for their insurance) and be done with it. I know my bank (Wells Fargo) has a camera at every window, (what kind of bank says they don't have cameras—First National Bank of Honor System?) Is there a way, perhaps with the help of the police report, to insist that the bank actually go back through their footage that day for those 20 minutes? It would be great piece of mind to my uncle to know "Yeah I recognize that guy!" as opposed to wondering every time he gives someone a check.

- Is there a way for him to put some "hoops" on his info (like the codeword at the bank) so that withdrawls/loans/new-credit-cards can't be signed up in his name?

Thanks in advance

posted by blueberry to work & money (5 comments total)

Is there a way, perhaps with the help of the police report, to insist that the bank actually go back through their footage that day for those 20 minutes?

It's very possible that they don't keep the tapes that long. They're mostly intended to be used for armed robberies, not frauds.
posted by dilettante at 2:40 PM on November 12, 2008

Identity Theft 101

Avoid ID Theft [FTC]

Identity Theft Victims Guide

I doubt the bank would lie about the cameras. They got ripped off, too (or really, their insurer got ripped off). If they offer a codeword option, it's better than nothing, but he may be better off changing banks (try a credit union this time). Don't obsess about what the bank checked. You'll never really know and it doesn't matter.

Your uncle needs to check his credit reports and freeze them. (The bank may have done this for him if he was denied through the store, but he should check, and find out how to unlock it selectively. He doesn't want to be the one locked out of his own credit.) Look at all consumer credit charges carefully. This could be a one-time thing but it may also mean years of vigilance.

The worst case for ID theft means a new social security number (and the old one will follow him around for years, it will be like having a clean identity you're keeping clean and a dirty identity you want to make sure doesn't get dirtier).
posted by dhartung at 3:14 PM on November 12, 2008

I found out this weekend that there is no defense against someone who knows only your routing number and account number. Donald Knuth was hit by this attack and wrote about how it works. This is printed on every single check you write, and these two pieces of information are all that are needed to withdraw money from an account.

The best thing your uncle can do is: a) get a new account, and b) only pay by check to a few trusted places.
posted by zippy at 5:46 PM on November 12, 2008 [1 favorite]

They don't check driver's license number against the one on file. Heck, if you're charming and seem trustworthy, you can get away with showing a much less standard form of ID, like a student ID or building ID.
posted by desuetude at 6:37 PM on November 12, 2008

The tapes thing doesn't sound outrageous. Bank tapes lose their value very quickly, they probably rotate through 7 or 14 video tapes (ie. each Friday, they use the Friday tape, and overwrite last week's footage).

I've personally come to the conclusion that the banking system is very insecure. It was setup before people really looked hard at how security worked, with authentication, authorization, permission, and all that. And what's worse is that it hasn't been updated. I don't know what the solution is, but other people here are headed in the right direction.

Being locked out of his own account is a BAD thing if he didn't ask for that. It means that somebody likely has opened and defaulted on other accounts, and he's much worse off than just a stolen check. Pull the credit reports and verify everything there. AFAIK banks can't unilaterally setup monitoring on your credit reports, with lockouts and such.
posted by cschneid at 7:52 AM on November 14, 2008