The threat posed by photocopiers is real and can make you vulnerable to identity theft: Internet ScamBusters #223
Today we have three Snippets for you:
- Photocopiers: A New Culprit for Identity Theft -- Especially During Tax Season?
- "Pump and Dump" Scams Are Growing Fast
- 2007 "Dirty Dozen" Tax Scams
Photocopiers: A New Culprit for Identity Theft -- Especially During Tax Season?
Consumers have seen lots of identity theft warnings recently, but one potential danger that almost no one is aware of is the threat posed by photocopiers.
Yes, photocopiers have become a potential source for identity fraud because most digital photocopiers manufactured during the past five years have disk drives that are used to reproduce the documents.
This means that when you photocopy documents -- including tax returns, for example -- you could be making yourself vulnerable to identity theft. If the copier's hard disk is not protected with encryption or a functioning (and effective) overwrite mechanism, and if a scammer gains access to the hard drive, experts agree that the information that was photocopied could become a tool for identity theft.
Some manufacturers are now adding security features to their photocopiers; however, many of the digital photocopiers that have been manufactured in the past five years and are currently in use in public venues and businesses are at risk.
According to Keith Kmetz, an analyst at market researcher IDC, "it is a valid concern and most people don't know about it." Kmetz adds: "copying wasn't like this before."
The likelihood of having your data stolen from a photocopier disk drive is probably quite low right now. Nonetheless, with networked photocopiers or during tax season when unscrupulous employees working at copy shops watch people make copies of their tax returns, it is certainly possible -- and it is disconcerting.
Action: Perhaps most important, recognize that there could be a problem and try to take precautions. For example, consider asking your tax preparer or the copy shop you use to copy your tax return whether their photocopiers have data security installed.
Visit the ScamBusters.org Identity Theft Information Center for more info.
2007 "Dirty Dozen" Tax Scams
Speaking of tax season, each year the IRS releases its list of "Dirty Dozen" tax scams. The 2007 list, announced last month, identifies the twelve most blatant scams that affect taxpayers.
This year's list includes five new scams. Topping the list is "Telephone Excise Tax Refund Abuses," which involves fraudulent or over-inflated refunds of the telephone excise tax, which is available to most taxpayers this year. The IRS is actively investigating inflated refund requests.
"Pump and Dump" Scams Are Growing Fast
Here's a scary, but not surprising, fact: According to the Internet security company, Secure Computing, 90% of all email messages are now spam. This is a large increase.
Further, stock spam has been a significant part of this growth, and now represents 30% of all spam.
The most popular type of stock spam is often called "pump and dump," because scammers tout supposed benefits of a penny stock, usually claiming hot insider information, which they hope will "pump" the price up.
Then, they "dump" their own shares, which drives the price back down.
This month, the Securities and Exchange Commission (SEC) has started an enforcement effort it's calling Operation Spamalot, in which it suspended trading for 10 days in 35 stocks that have recently been promoted with "pump and dump" scams. Further investigation could lead to arrests.
According to the SEC, 100 million "pump and dump" emails were being sent out each week, and this has been responsible for hundreds of millions of dollars of investor losses!
Many of these companies have (or had) offices in Western Canada. The SEC is working with the Royal Canadian Mounted Police and two Canadian regulatory agencies.
Action: Delete stock spam. Never invest based on "hot tips" from emails, chat room posts or other similar information on the Internet.
For an interesting perspective on whether stock tips are really "hot," read this stock tips article.
We think you'll find it a real eye opener. 😉
Time to close -- we're off to take a walk. See you next week.