S.E.E. asked:


My boyfriend was caught with an id that has his picture on it, but one of his friend’s name and information. He never used the id, he was just found with it. Does anybody know the penalties for this?

JOSEPH

Author asked:


The rampant use of credit cards, and especially that use compounded by the secret avenues of the internet, can put the common consumer in a substantially vulnerable position to become a victim of fraud. Much like computer viruses and the necessary adjustments made by internet providers, card companies and merchants are vigilantly combating fraud as it occurs and thinking of new ways to pre-empt it before it can hit. The cost of fraud is high, over 500 million pounds in the UK alone in 2004 so finding ways to anticipate and curtail the damage caused by fraud, is like the credit card industry itself, very big business.

Everyone wants a piece of the fraud protection trade. Credit card companies offer their own incentives and programs and advertise them through clever ads starring Donald Trump, Viking marauders, and unwitting customers channeling the voices of the thieves who made them victims. Internet sites like Scambusters dot com and Merchant911 dot com protect consumers and merchants respectively. Often these services are free, or just provide a forum within which consumers and merchants can share information regarding recent scams. Even email, which can easily be harvested for numbers being sent back and forth in transactions, is a potent medium through which consumers can communicate with each other about impending threats or even scams in progress. Though the elimination of fraud is an impossibility, its reduction is possible due to recent innovations in fraud prevention such as security chips, picture id’s and the increasing awareness of online merchants.

Company databases often unwittingly supply massive amounts of credit card information to hackers, having conveniently kept it all in one place. Often, the merchant himself will be responsible for payment of the fraud if it is found that improper steps were taken to ascertain the purchaser’s identity and/or adequately protect the identity of their consumer’s. The purchases most at risk for fraud are “card not present” purchases. Sites like Merchant911.com list fraud screening sites like: preCharge, MaxMind, Cardinal Commerce, FraudSmack, WhyLabs and Merchant Sense all of them offering fraud-screening services to the merchant community, specifically e-merchants who deal exclusively with “card not present” scenarios. Consumers have other resources, including identity theft protection software, many of these offered by ClearCommerce.

Though the dangers of “card not present” shopping are manifold, the convenience and ease of shopping from home will likely do little do deter even the most nervous consumer. Though fraud may never be eradicated, online services, software and common sense go along way towards total protection.



CLIFF

Beauty & Brains asked:


Last week while I was at work, I was told of the high rate or credit card theft. Wanting to slow it down and prevent it from happening at my register, I asked customers for their id when using a credit card. Of all the people I asked, only one lady got pissed. “Why do I have to show id for a $5 purchase?” My manager went over to apologize to the customer and told me not to ask for id’s anymore. About an hour later, I had an older caucasian male in his mid 30’s come through with a credit card that had a chhinese/japanese name on it. I truely believe that credit card fraud stops at the registers. If more cashiers asked for id, the rate would truely go down. What’s your thoughts on this topic? I’d rather give 5 seconds to show my id, than to have someone taking 5 months plus of my time with me straightening the fraud out. Thanks in advance.

RUSS

Phil asked:


With APACS revealing credit card fraud had risen by 25 per cent in 2007, research from Saga found that people aged less than 50 years old, and especially men, are more likely to be the victims of card fraud or identity theft. This they say is down to the fact that younger people tend to have multiple credit and debit cards which makes fraudulent activity harder to spot.

Of those surveyed, 94 per cent admitted to owning a credit or debit card with 86 per cent saying they have up to four different cards. Over half of those questioned said they carried all their cards with them at the same time, further increasing the risk of fraud should their wallets or purses go missing.

The report from Saga also showed that 22 per cent of people aged between 18 and 34 years old, with multiple cards, and 16 per cent of those aged 35 to 49 years old, only used their extra cards once a year. However, long periods of time without using the cards, makes it harder to identify if the card has been used fraudulently. 

One in 10 cardholders only, admitted to keeping their cards in a secure place which highlighted a need for card protection against loss or protection. Saga’s research illustrated the laid back approach younger people have towards guarding themselves against fraud with just 66 per cent of those who discovered their card had been lost or stolen, making an effort to report it straight away. This is in comparison to 78 per cent of cardholders aged over 50 years old who took action immediately.

Chief executive of Saga Group Limited, Andrew Goodsell said, “Our study shows a worrying trend that men and younger people are generally less concerned about ID fraud than their older counterparts, and are not taking the steps to prevent fraudulent activity. However, prevention is always better than cure, and we urge everyone to be cautious when using and handing over credit cards to strangers because fraud is on the increase.”

An astonishing 88 per cent of customers aged between 18 and 34 years old say they would not object to their card being taken out of sight when paying in a shop or restaurant. Just over half of those aged 50 year olds or more were happy for the same to happen.

People who bank or shop online also tend to be of a younger generation and this has also help the increase in people aged less than 50 become the victims of fraud.

Jemma Smith, APACS spokeswoman said, “There were zero online banking fraud losses in 2003 in the UK.” That figure had shot up to £33.5 million being lost by 2006.

“The increase in internet fraud could be expected when you look at how many more businesses are accepting online transactions. The problem is that criminals are targeting the customers more than the technology. It is about hacking into computers as much as it is about tricking users into revealing their card or account details. That is why opening an unsolicited e-mail is like opening the front door of your home to a stranger,” Smith said.



JOSE

The Truth asked:


She goes by Tosin and will tell you she is an accountant for Optimum Limited Nigeria … She will try to get you to wire her money through Western Union for cell phones, etc. and passport agengy fees to come visit you. She is actually part of a small group or is working for herself trying to get you to open up bank accounts (Wells Fargo and Bank of America in the US) to have money for her employer to deposit it into and then you wire it immediately to her…This is Fraud and carries prison time if you get caught. She sends you pics of a beautiful black woman and says she wants to marry to get out of Nigeria (hopefully a white man because see has seen how they treat their wives). Don’t fall into her trap, the money you send her up front you will not see again, she won’t use it for what she tells you it is for. When you ask her about coming to visit her instead she id very oppositional about it. When you ask her about buying her tickets, it can only be done in Nigeria, its the law there

EDWARDO

injustice4all asked:


Hi! I know of a reservist that has been actived due to 9/11. Since that time he’s remarried and enrolled his stepsons (who visit their deadbeat mom every other weekend) in the military DEERS and Tricare programs and has used these benefits even though he enrolled them fraudulently. Even more frightening is that I have reason to suspect he deceived the military regarding his education and in actuality has not earned his bachelor’s even though he is an officer. He’s being sued by someone for failure to pay for a service provided, so I think he has money problems. Letters/talks to his supervisor, first seargeant, and base commander, as well as Pass and ID on base, have been fruitless. This guy has a top secret clearance and I am concerned that if this is the level of integrity that he has shown openly, what other behaviors is he capable of and how much damage could he do to our country? Who should I contact with this information, or am I being over cautious?

JARROD

Ginger asked:


I’m afraid because there was not one penny in the wallet and they STILL kept it, that’s what scares me !
Is there a way that I can tell the DMV to keep tabs on my lost California ID?

and can whoever has all of this use my ID to get into bars, or to do fraud with or to open loans, or to go to my bank to withdrawl money, if they have the ID then they could couldn’t they? Because they know what bank and they have the debit cards. Also I did call the bank to cancel all of the debit cards but they still have my informationa nd my ID ?

I think i know who took it and it’s someone who goes to my school so it just makes it easier for them to stalk me , what can I do ?

MAURICE

Mike Clover asked:


Current studies show that ID Theft is at epidemic proportions. The Federal Trade Commission surveys estimated that there are close to 9.9 million victims and growing by 2 to 3 million a year.

For individuals that are not victims of identity theft, the best thing you can do is check your credit report regularly, focusing on two categories.

* Inquiries from unfamiliar companies. Here we are talking about someone applying for something in your name in a state that you don’t live in. Remember inquiries are the result of you applying for credit.

* Unfamiliar Accounts (tradelines). Are there debts or new credit listed on your credit report that you are not familiar with?

There are 3 major Bureaus that provide services to monitor your credit report. These services give e-mails to you promptly if there are any changes to your report.

What to Do if ID Theft happens to you.

You want to keep a detailed log of events as you start the dispute process. You do this in case you run into problems with a creditor. The first step obviously is contact the 3 credit bureaus, local police, creditors, etc…… You keep detailed conversations logs with any of these entities you communicate with. Also keeps receipts, bills, or out of pocket expenses you incur during the process of disputing. I would also make note of the emotional stress and how it is affecting your work performance and personal relationships. In addition your expenses and time could be tax-deductible in certain circumstance.

Contact Law enforcement

Here is the properties procedure for contacting the authorities so you can file a formal report. You should include all fraudulent accounts in the report. As the Credit Bureaus say they are able to remove disputes, remember to keep a copy of the report number and contact info.

Who to contact:

* FTC.gov/bcp/coline/pubs/credit/affidavit.pdf

* Local Police Department

* FTC 800-438-4338 or 800?ID THEFT

Credit Bureaus - Steps to take with the CRAs

* Notify one of the credit bureaus fraud units that you are victim of Identity Theft. This Bureau will be responsible for telling the other 2 Bureaus. (Equifax: 800-525-6285; Experian: 888-397-3742; Trans Union: 800-680-7289)

* Tell Bureaus to flag you credit report with fraud alert

* Get a copy of your credit report with scores

* Once you have read your report, send a dispute letter, accompanied with police report along with the FTC fraud affidavit specifying which accounts are fraudulent.

* Subscribe to the Bureaus monitoring services of your credit report

* Consider signing up for Trusted ID services which will block your credit report so only you can use it.

* Ask the Bureaus to contact the creditors that fraudulent activities have taken place.

Debt Collectors- You will be getting calls from debt collectors more than likely. If they call you:

* Get the debt collectors companies name, address and there phone number. Let him or her know you are noting the time and date of the conversation in your log activity book

* Inform the collection agency you are a victim of Identity Theft

* Provide the FTC uniform fraud affidavit

* Ask for number and name of credit issuer.

* Send the debt collector a letter, stating that you do not owe this debt and that the account has been close.

* Request in writing that the account is being flagged as fraudulent, and is being closed. You also should request in writing that the fraudulent account is being removed from your credit report.

New accounts opened in your name: the Identity Thief has opened new accounts in your good name: what to do. The credit report you pulled should list all creditors that have accounts in your name with contact numbers.

* Notify each creditor of the identity theft that has taken place to you. You will be asked to send a fraud affidavit. (Be sure to put all of this in your log)

* Ask the creditors to send you any application or fraudulent activity that has happened in your good name.

* Add passwords to all accounts

* If the thief has got a hold of your checking account, credit cards, get replacements with new numbers. Call and request these accounts to be closed as well.

* Fill out FTC uniform fraud affidavit.

Your Checking account- If the thief has written checks in your name here is what you do.

* Call your local police, and file a report

* Call your bank and close the account immediately

* Remember to keep good logs

* Typically your bank will refund you your money, and ask for a copy of police report filed.

This stuff is serious business; I hope this will help you resolve issues involving identity theft to you.



ARON

Joel B. Ginsberg asked:


Introduction

In Douglas Millowitz v. Citigroup Global Markets et al (“In Re Salomon Analyst Metromedia Litigation”), 544 F.3d 474 (2nd Cir. 2008), the Second Circuit extended the fraud-on-the-market presumption of reliance, first set forth in Basic v. Levinson, 485 U.S. 224 (1988), to analyst reports. The Court also stated that defendants should be afforded the opportunity to rebut that presumption at the class certification stage in an effort to prevent certification. The opinion may make it harder to pursue class actions in some securities fraud cases.

Background

In re Salomon Analyst Metromedia Litigation, 544 F.3d 474 (2nd Cir. 2008),  (“Salomon”), the plaintiffs – an alleged class — were investors in Metromedia Fiber Network Inc. (“Metromedia”). They claimed that defendants Citigroup, Citicorp USA, Salomon Smith Barney, and Salomon’s research analyst Jack Grubman defrauded buyers and sellers of Metromedia stock through materially false and misleading statements in Grubman’s analyst reports, in violation of section 10(b) of the Securities Exchange Act of 1934 and the SEC Rule 10b-5. Grubman’s reports, which included “Buy” recommendations, were overly optimistic about Metromedia’s potential and touted a $350 million Citicorp credit facility for Metromedia without disclosing problems and delays with the facility.

Plaintiffs alleged that Grubman made the false and misleading statements to attract business for Salomon from Metromedia, which would increase Grubman’s income. As Grubman was an influential analyst, his positive reports were able to drive up share prices.

The Southern District of New York had granted class certification, finding that the proposed class representatives met the Federal Rule of Civil Procedure Rule 23(a) requirements of numerosity, commonality, typicality, and adequacy; it also determined that common questions of law or fact among class members predominated over individual class member questions, pursuant to Rule 23(b)(3).

The district court agreed with the plaintiffs that their reliance on the statements could be presumed under the fraud-on-the-market doctrine set forth in Basic v. Levinson, 485 U.S. 224 (1988) (discussed in detail below), and that the doctrine could be applied to analysts as well as issuer statements. The district court rejected the defendants’ argument that plaintiffs had to show materiality of the statements by showing that those statements actually “moved the market” – the district court determined that plaintiffs’ demonstration of a “substantial likelihood” that the analyst reports altered the total mix of information available to the public was sufficient.

The Fraud-on-the-market presumption and its application to analysts

In order to successfully pursue a 10b-5 claim, plaintiffs must prove “(1) a misstatement or omission (2) of a material fact (3) made with scienter (4) upon which the plaintiff relied (5) that proximately caused the plaintiff’s loss.” McDonald v. Alan Bush Brokerage Co., 863 F.2d 809, 814 (11th Cir.1989) (citation omitted). The fraud-on-the-market doctrine holds that when certain conditions are present, the element of reliance (the fourth element listed above) may be presumed.

The fraud-on-the-market presumption was established in the Basic case in recognition of the fact that “[t]he modern securities markets, literally involving millions of shares changing hands daily, differ from the face-to-face transactions contemplated by early fraud cases.” 485 U.S. at 243-44. The Basic court held that plaintiffs in a securities fraud action are entitled to a presumption of reliance on the misleading statements where: (1) the security was traded in an open, impersonal, efficient market; (2) the alleged misrepresentations were publicly made; and (3) the misrepresentations were material. Id. at 244-47. The Basic court based this doctrine on the notion that “in an open and developed securities market, the price of a company’s stock is determined by the available material information regarding the company and its business.” Id. at 243.

The Basic court ruling certainly benefitted securities fraud plaintiffs, and purported classes in particular. Since class members have to prove that common questions of fact or law predominate to obtain certification, a presumption of reliance obviates the need to individually query each class member to ascertain a common claim of reliance. The presumed reliance makes it more likely that class certification is appropriate.

In Salomon, the district court held – and the Second Circuit agreed – that the fraud-on-the-market presumption set forth in Basic can be applied to more than merely issuer statements. Both courts rejected defendants’ argument that Basic was not applicable to analysts, noting that nothing in the Basic opinion suggested such a restriction. 544 F.3d at 481. The Second Circuit stated that “the premise of Basic is that, in an efficient market, share prices reflect all publicly available information, and, hence, any material misrepresentations” and therefore it “does not matter, for purposes of establishing entitlement to the presumption, whether the misinformation was transmitted by an issuer, an analyst, or anyone else.” Id. While the court did not go so far as to allow Basic to be applied to all speakers, it confirmed applicability of the doctrine to secondary actors such as analysts. Id. at 484, n.8.

Plaintiffs’ proof of materiality of the misrepresentation

Under the Basic doctrine, the plaintiffs still have to prove that the misrepresentation was “material” in order to establish the presumption of reliance. As noted above, the Salomon defendants argued that plaintiffs had to establish that the misrepresentation “moved the market” – had a measurable impact on the stock price – in order to prove materiality. This argument was rejected by both the district and circuit courts.

However, the Second Circuit set forth a new standard for proof of materiality that leaves open questions and conflict between Circuits. The Second Circuit stated that “plaintiffs must show that the statement is material (a prima facie showing will not suffice).” 544 F.3d at 486, n.9. In other words, the Second Circuit would require more than a prima facie showing of materiality, but less than proof that the statement “moved the market.” The Second Circuit did not specify how much or how little evidence would be sufficient to meet this in-between standard, leaving that question open for future litigants.

This new standard articulated by the Second Circuit conflicts with the Fifth Circuit’s opinion in Oscar Private Equity Investments v. Allegiance Telecom Inc., 487 F.3d 261 (5th Cir. 2007). The Oscar court required the plaintiffs to prove “loss causation – that an alleged misstatement ‘actually moved the market’” before they could establish a presumption of reliance at the class certification stage. 487 F.3d at 265. The Oscar court required this level of proof “to tighten the requirements for plaintiffs seeking a presumption of reliance.” Id.

Although the Second Circuit was aware of the Oscar decision when it wrote the Salomon opinion, the Second Circuit did not acknowledge the conflict between its holding and Oscar in its opinion.

Defendants may rebut the presumption at the class certification stage

The fraud-on-the-market presumption is rebuttable. Defendants can rebut the elements that gave rise to the presumption by showing, “for example, that the market price was not affected by the alleged misstatements, other statements in the ‘sea of voices’ of market commentary were responsible for price discrepancies, or particular plaintiffs may not have relied on market price.” 544 F.3d at 485. The question before the Second Circuit in Salomon, however, was when defendants can present their rebuttal evidence.

The district court had determined that it could not consider defendants’ rebuttal evidence prior to class certification because that would require the court to weigh merits-related evidence at the class certification stage, which was prohibited under Caridad v. Metro-North Commuter R.R., 191 F.3d 283 (2nd Cir. 1999). However, after the district court issued its opinion and before the appellate briefing, the Second Circuit decided In re Initial Public Offering Sec. Litig., 471 F.3d 24 (2d Cir. 2006), which overruled Caridad on this issue. In re IPO required a district court to make a “definitive assessment” that the Rule 23(b)(3) predominance requirement had been met, necessitating consideration defendants’ rebuttal arguments.

As a result, the court clarified that defendants should be able to present their rebuttal arguments at the class certification stage. As a result, the Second Circuit reversed and remanded the case to give defendants the opportunity to present evidence rebutting the Basic presumption prior to class certification.



MORGAN