Avoiding Fraud with BNN's Larry Berman and Kelley Keehn

Avoiding fraud

Larry Berman, Berman's Call
12:13 PM, E.T. | March 24, 2014
Best of BNN, Investing

We are very excited to have one of Canada’s preeminent personal finance and literacy experts on the show today, Kelley Keehn. Her ninth book is titled Protecting You and Your Money -- A GUIDE TO AVOIDING IDENTITY THEFT AND FRAUD and can be purchased here. March is Fraud Prevention/Awareness month and the book covers three major areas:

• Financial & Credit Fraud
• Identity Theft
• Investment Frauds

Today’s focus is on investment frauds. The biggest fraud in history was Bernie Madoff who, despite whistle blowers and SEC investigations, was able to continue stealing money for years. Here is why it was so compelling and why so many people were taken in:

• Many of my friends (sophisticated investors like pension funds and endowments) who were smart investors were involved, so I would have expected them to have done their due diligence.
• I would have heard about my friends’ past success with their investment and felt I was missing out — after all, he’s been around for years
• Madoff was a professional and chair of NASDAQ, what did I need to research?
• Exclusivity. How could I say “no” when I offered an opportunity to invest? He built on that exclusivity and burning desire to be “in the club”
• In this case, the investment returns weren’t a major red flag. He was paying investors a 10% return, which is not unattainable, but to deliver this consistently is a potential red flag (as his critics pointed out over the years)

However, it still wasn’t the high level red flag return that many other Ponzi schemes offer (for example, 18%). Kelley admits that she probably would have been duped by this one, although she notes Madoff’s return were virtually impossible to achieve when you factor in volatility. Madoff also refused to explain what he did other than to say it was a complicated options strategy. Kelley’s research concluded that fear and greed (the basics of many investment decisions) were major contributors to people putting all their eggs in one basket.

Earl Jones (who was released from prison last week) and others were different. In most other famous Canadian cases, the advisors were never registered. To see if your planner/advisor is registered you can check out the following links:
http://www.fpsc.ca/
http://www.securities-administrators.ca/investortools.aspx?id=1128

Other Red Flags to consider:

• High pressure — must buy now! It won’t be available tomorrow (or next week)!
• Guaranteed high returns
• Risk free returns
• You heard about the “opportunity” from a friend, family member or at a social event
• There’s a “genius,” “guru,” “uber-successful” person at the helm
• It’s exclusive
• You’re asked to trust the promoter without a second opinion
• Very little (or no) documentation for the investment.

Last week we did a call out for viewers to tell us about investment frauds they were involved with or knew about. Thanks to all that wrote in, 10 books will be going out to the first 10 we received. Many of the e-mails were about various stock frauds, some of the more recent ones were Poseidon Concepts (PSN), Sino-Forest (TRE) and a few mentioned Bre-X. I’ve compiled a chart of some of the big US ones including Enron and Worldcom. When I was a market strategist at CIBC World Markets, all employees had to take a test so that we could report potential irregularities after CIBC paid a $2.4 billion fine (for hiding losses at Enron) and admitted no guilt. Citigroup and JP Morgan paid up big too—not guilty. It is deplorable sometimes how the system works against the individual investor.

If there is a question about quality of the company in any respect - especially earnings, management, unreasonable growth - just do not get involved. The best rule of thumb we can suggest is that you do not have to invest. I say it on the show all the time, you simply to not have to own it if you are not sure. However, if you do get involved with a company that goes bad, stop loss at an amount where it does not kill you. This is very hard for investors to do, nobody likes to take a loss, but it is the best thing to do. Move on, it did not work, you do not need to get your money back and the market/stock owes you nothing. To calculate a reasonable loss: If the position is 5% of your portfolio, you could see a 30% decline and it only costs you 1.5% of your overall account. That is not tragic: 30% gives you enough room to stay with it through most ‘corrections,’ but once it falls more than that, it tends to be worse than a correction and you should simply get out and move on.

Identities of children threatened - it all starts with the original SIN

 Canadians can fight back against scammers with the help of a new guide book from Chartered Professional Accountants of Canada (CPA Canada). Kelley Keehn, author of Protecting You and Your Money: A Guide to Avoiding Identity Theft and Fraud, is shown at the official book launch, Tuesday, March 25, 2014, in Ottawa. The book can be obtained by visiting www.cpacanada.ca/fraudprevention. (CNW Group/CPA Canada) (CNW Group/CPA Canada)

 
OTTAWA, March 25, 2014 /CNW/ - Parents need to be aware that their child is vulnerable to identity theft as soon as a Social Insurance Number (SIN) is assigned.

Identity thieves want the personal information of children because they do not have credit records. By acquiring a child's SIN, a scammer can create a completely new identity and successfully apply for loans and credit cards.

Protecting children against scammers is one of many fraud prevention topics covered in a new book from the Chartered Professional Accountants of Canada (CPA Canada) titled Protecting You and Your Money: A Guide to Avoiding Identity Theft and Fraud. 
 
The guide advises parents to always keep their child's SIN under lock and key and never store it on a computer. Children also should not reveal potentially sensitive personal information, such as their home address and birthdate, on social media.

"Child identity theft is particularly dangerous because it can take 10 to 15 years to discover the crime," explains the book's author Kelley Keehn. "By this time, the scammer's trail is cold and the damage to the victim's credit record can be devastating. It's also gut-wrenching for a parent to know someone has stolen their child's identity."

The CPA Canada guide was officially released today in Ottawa to Members of Parliament and other dignitaries as part of Fraud Prevention Month. The organization is helping Canadians gain the knowledge and confidence required to protect themselves against identity theft and fraud.
"The best defence is awareness, knowledge and the will to fight back," stresses Keehn.

Protecting You and Your Money: A Guide to Avoiding Identity Theft and Fraud can be obtained by visiting www.cpacanada.ca/fraudprevention.
 
An important contributor to the guide book is Jennifer Fiddian-Green, a forensic investigative accountant who has worked extensively with police forces to track down money launderers and fraudsters.

"We all are potential targets," said Fiddian-Green, a partner with Grant Thornton LLP. "Canadians need to be more mindful of the risks and better understand how to protect themselves and the people close to us."

People can report actual or suspected fraud to the Canadian Anti-Fraud Centre by visiting www.antifraudcentre.ca or calling toll free 1-888-495-8501. As the Centre notes on its website, the information may help identify a new or unique scam early on and allow prevention and awareness measures to be activated.

About CPA Canada
CPA Canada is the national organization established to support unification of the Canadian accounting profession under the Chartered Professional Accountant (CPA) designation. It was created by the Canadian Institute of Chartered Accountants (CICA) and The Society of Management Accountants of Canada (CMA Canada) to provide services to all CPA, CA, CMA and CGA accounting bodies that have unified or are committed to unification. As part of the unification effort, CPA Canada and the Certified General Accountants Association of Canada (CGA-Canada) are working toward integrating their operations this year. Unification will enhance the influence, relevance and contribution of the Canadian accounting profession both at home and internationally. www.cpacanada.ca


SOURCE CPA Canada
Image with caption: "Protecting You and Your Money: A Guide to Avoiding Identity Theft and Fraud, a new publication from the Chartered Professional Accountants of Canada (CPA Canada) was officially released, Tuesday, March 25, 2014, in Ottawa. The book can be obtained by visiting www.cpacanada.ca/fraudprevention. (CNW Group/CPA Canada)". Image available at: http://photos.newswire.ca/images/download/20140325_C6639_PHOTO_EN_38308.jpg

Image with caption: "Canadians can fight back against scammers with the help of a new guide book from Chartered Professional Accountants of Canada (CPA Canada). Kelley Keehn, author of Protecting You and Your Money: A Guide to Avoiding Identity Theft and Fraud, is shown at the official book launch, Tuesday, March 25, 2014, in Ottawa. The book can be obtained by visiting www.cpacanada.ca/fraudprevention. (CNW Group/CPA Canada) (CNW Group/CPA Canada)". Image available at: http://photos.newswire.ca/images/download/20140325_C6639_PHOTO_EN_38321.jpg

 

For further information: or to arrange an interview, contact:
Tobin Lambie, principal
CPA Canada
(416) 204-3228
tlambie@cpacanada.ca

Identity thieves are targeting your client’s kids

The second your client’s kids get a SIN, they’re vulnerable to identity theft.

And thieves want the personal information of children because they don’t have credit records. By acquiring a child’s SIN, a scammer can create a completely new identity and successfully apply for loans and credit cards.

Read: Canadians fighting ID fraud, says survey

The Chartered Professional Accountants of Canada advises parents to always keep their child’s SIN under lock and key and never store it on a computer. Children also should not reveal potentially sensitive personal information, such as their home addresses and birthdates, on social media.

“Child identity theft is particularly dangerous because it can take 10 to 15 years to discover the crime,” explains Kelley Keehn, a personal finance author. “By this time, the scammer’s trail is cold and the damage to the victim’s credit record can be devastating.”

Read the full article and more links from Advisor.ca here http://www.advisor.ca/news/industry-news/identity-thieves-are-targeting-your-clients-kids-147917
 

Children becoming targets of identity theft

A consumer pays with a credit card at a store in Montreal on July 6, 2010. (Ryan Remiorz / THE CANADIAN PRESS)

Read more: http://www.ctvnews.ca/canada/children-becoming-targets-of-identity-theft-1.1748056#ixzz2xZ8BzL7P

CTVNews.ca Staff
Published Wednesday, March 26, 2014 10:30PM EDT

The author of a new book on fraud protection is saying children are becoming the newest targets of identity thefts.

Personal finance expert Kelley Keehn, who penned a new fraud protection guide book for the Chartered Professional Accountants of Canada, says with just a few pieces of personal information, savvy criminals may be able to steal your money, even open bank accounts or credits cards under your name.

Key information for such thefts include birth date or Social Insurance Number (SIN).
 
“We hear about the data breaches and some people think, well, there’s nothing I can do,” Keehn said in an interview with CTV’s News Channel Wednesday. “There’s a lot that you can do. Not carrying around your SIN (card) for example.”

Now, parents are also being urged to protect their children’s SIN.

Many parents order a SIN for their child in order to open a Registered Education Savings Plans (RESP), but the SIN itself leaves a child vulnerable to identity theft because the number isn’t associated with a birth date. Scammers can easily use the SIN to create a new identity and apply for credit.

Keehn said child identity theft is already taking place in the United States, which means it’s likely to see spill-over north of the border.

“A couple of weeks ago, the Edmonton Police Service said ‘yep, it’s officially on our radar,’” Keehn said.

Child theft is particularly heinous because it can take years to recover from the crime. It’s also difficult to know if your child has been victimized, because children don’t have a credit history.

“It takes sometimes 10 to 15 years to spot it, because kids shouldn’t have a credit report,” Keehn said. “They shouldn’t have any type of debt until they’re 18.”

Generally, the most common way people fall prey to identity theft is by not sufficiently protecting their data and not being vigilant with their mail, Keehn said.

During tax season, for example, residents begin to receive notice of assessments and bills in the mail.
“Are we protecting our mail? Who would know if a bill went missing,” she said.

Keehn suggests people check their credit reports regularly to see what credit has been applied for under their name.

“If you see something there that you don’t recognize like a cellphone, or some type of a loan, that would be a tip-off that someone has stolen your identity,” she said.

Keehn also suggests people obtain a proactive credit alert on a credit report, which adds “another layer” of protection requiring the lender to call you when someone is applying for credit in your name.
Here are some tips on how to reduce the risk of identity theft:

• Never carry in your wallet more credit cards than you need
• Protect your PIN: Look around when entering your PIN in public areas
• Never carry SIN card or birth certificate
• Provide personal information only when you have initiated contact or you know the person you are dealing with
• Be cautious about personal information published on social networking sites
• Change passwords frequently

(Source: Edmonton Police Service)

Read more: http://www.ctvnews.ca/canada/children-becoming-targets-of-identity-theft-1.1748056#ixzz2xZ8I6u1h

Canadians must remain on guard against fraud, identity theft: CPA Canada survey

It's fraud prevention month, and I'm thrilled to announce that my newest book, Protecting You and Your Money: A Guide to Avoiding Identity Theft and Fraud. published by the Chartered Professional Accountants of Canada, which will be launching on Capitol Hill, March 25th.  Stay tuned for more details, and please read their survey results below to learn more about how fraud is affecting Canadians.

TORONTO, Feb. 28, 2014 /CNW/ - A national survey conducted for the Chartered Professional Accountants of Canada (CPA Canada) reveals that many Canadians are fighting back against scammers by protecting themselves against fraud and identity theft.
The 2014 CPA Canada Fraud Survey clearly shows that most respondents are taking action to protect their financial information:

• 72 per cent said they always shred their banking and credit card statements.
• 68 per cent stated they are very uncomfortable giving out personal or financial information through email.
• 61 per cent confirmed they were very uncomfortable giving out personal or financial information on the phone.
• 59 per cent stated they always cover the keypad when entering their Personal Information Number (PIN) at a retailer or a bank machine.
• 60 per cent said they always check to confirm the shopping websites they use are encrypted when purchasing products online.
• 56 per cent indicated they were very uncomfortable logging in to their banking or investment website using a public Wi-Fi network.
• 51 per cent confirmed they notify their bank/credit card company when they travel abroad.
• 49 per cent said they are very uncomfortable using their Social Insurance Number (SIN) as identification.

"It's heartening to see so many Canadians displaying an awareness of fraud prevention and taking preventative action, but they cannot let their guard down," says Nicholas Cheung, CPA, CA, a director at CPA Canada. "Fraud prevention requires continued diligence."

The survey also reveals that, despite these efforts, the incidence of fraud in Canada remains widespread. Nearly a third (29 per cent) of the respondents report being victims of some form of financial fraud and 43 per cent know someone who has been a fraud victim.

The most common types of fraud reported by victims surveyed were credit and debit card fraud (71 per cent and 28 per cent respectively) followed by, identity theft (seven per cent), email fraud and online fraud (each at six per cent) and fraudulent investment schemes (five per cent).

"People need to be vigilant, not only by acquiring the knowledge to spot and stop fraud, but also by reporting these crimes," says Daniel Williams, Senior Call Centre Supervisor for the Canadian Anti-Fraud Centre (CAFC). "The sad truth is that most cases of fraud go unreported and this benefits the fraudsters. If you have been a victim or suspect fraud, fight back by contacting us."

People can report actual or suspected fraud to the CAFC by visiting www.antifraudcentre.ca or calling toll free 1-888-495-8501.

In March, as part of Fraud Prevention Month, CPA Canada will be releasing a comprehensive, easy-to-use guide titled Protecting You and Your Money: A Guide to Avoiding Identity Theft and Fraud. The book is designed to help Canadians gain the knowledge and confidence required to take action to stop and report fraud.

The guide can be pre-ordered by visiting www.cpacanada.ca/financialliteracypublications.
The 2014 CPA Canada Fraud Survey was conducted by Harris/Decima via telephone between January 31 and February 23, 2014, with a national random sample of 1,015 adult Canadians aged 18 years and over and is considered accurate to within ± 3.1 per cent, 19 times out of 20.  A survey summary report is available online at www.cpacanada.ca/2014FraudSurvey.

About CPA Canada
CPA Canada is the national organization established to support unification of the Canadian accounting profession under the Chartered Professional Accountant (CPA) designation. It was created by the Canadian Institute of Chartered Accountants (CICA) and The Society of Management Accountants of Canada (CMA Canada) to provide services to all CPA, CA, CMA and CGA accounting bodies that have unified or are committed to unification. As part of the unification effort, CPA Canada and the Certified General Accountants Association of Canada (CGA-Canada) are working toward integrating their operations.  Unification will enhance the influence, relevance and contribution of the Canadian accounting profession both at home and internationally.

SOURCE CPA Canada
For further information: or to arrange an interview, contact:
Tobin Lambie, principal, media
CPA Canada
(416) 204-3228
tlambie@cpacanada.ca
www.cpacanada.ca