Identity Theft & Financial Crime Prevention

By: Robert J. Rebhan
Posted: 07/17/2012

Many adult consumers think about financial identity theft.  For some, it is a brief consideration. 


For others, it is a deep concern.  This is understandable, as this financial crime is the number one public worry.


Business and consumer losses in the United States have been calculated to be as high as 57 billion for a twelve month period.


Few things are more terrifying to consumers, particularly the elderly, than losing all or part of their financial security.


Business operators are always on guard to protect business profits from unforeseen, yet predictable, criminal actsAnd unfortunately, productive commerce has been disrupted by criminal activity, not only from face to face transactions, but from cyber intrusions much of which originates in distant lands. 


The criminal activity is the result of stolen financial information coming back into the system to purchase goods or services, or to transfer assets.  It is the use of compromised financial data which is detrimental to our community


Not the mere possession of this information.


Consumer financial data in the hands of a “data thief” is benign and it remains so until it is presented for the benefit of an “identity thief,” who in many cases is not necessarily the “data thief.”


Currently federal and state legislation provides strong incentives for businesses to protect consumer financial data from the data thieves. 


Red Flag Rules,” there has been little focus on creating mandates to force business to stop identity theft at the time consumer financial data is presented by a identity thief to obtain assets in the victim’s name.


Two concerns when attempting to prevent a financial crime:  First, to protect data.  Secondly, to prevent the use of compromised data.


The approach to these issues is complex and to date, preventative mandates and guidelines have fallen short. 


Society cannot be expected to solve a problem when it does not understand the mechanics of the problem.



Rebhan works with police officers, and recently an LAPD officer told me she learned more about fraud in my two hours with her, than she had in her twelve years on the job. 


How can this be?


There is something fundamentally wrong when the people on the front line are not informed!!!


The solution to an informed public and business community is multi-faceted and involves changing established protocol for delivering information. 


It isn’t enough to have a peace officer with limited training stand before a town hall meeting and deliver the basic shredding advice. 


It is even more illogical to expect law enforcement to understand business protocol and vulnerabilities. 


Criminals also have two concerns.  First, to penetrate barriers (simplistic or complex) to obtain sensitive data, then to find a business with inappropriate data acceptance standardsperhaps one which fails to use multiple factor customer authentications. 


State and federal neglect of this loophole can be rectified at the municipal level. 


California has forwarded significant legislation regarding identity theft—model legislation copied by other states. 


Yet California still leads the nation in certain identity loss categories including attacks against credit card accounts and bank accounts.  


Fiscally stressed states in the nation releasing non-violent prisoners, many of whom are identity thieves, we will lose the one thing we have historically used to avoid crime. 


Mysterious Crime:  Robert is stunned by the number of uninformed people that flood into the meetings, describing how they, a loved one, or someone they know, have been victimized by identity theft.


Many victims state—that although their cases have been disposed ofthey still do not know the technicalities of their victimization. 


He is awed by the number of persons in public service, financial institutions and the corporate world who haven’t developed the knowledge and put into practice procedures to protect the community. 


Where are the experts” in business who understand legal requirements? 


Where are the judges and law enforcement officers who understand banking and retail procedures? 


Robert's opinion, society has reached an impasse.  

Technology has helped provide a menu of exciting choices for organized criminal elements, as well as opportunists who simply take advantage of found or exposed financial data. 


Clearly, in order to reverse the current trend, municipalities must rethink established methods of prevention. This includes innovative channels for educating businesses, law enforcement, consumers, and the judiciary. 


The Financial Crime Czar: I will also help in formatting enforcement and training programs. 


As the director of The American Express Company merchant fraud awareness training program, I orchestrated over 150,000 customized training program sessions with businesses and to law enforcement throughout the nation. 


Dramatic results were recognized from this program saving businesses throughout the nation, tens of millions of dollars from fraud losses and drastically reducing the number of “identity theft” credit card fraud episodes.


I found that the overwhelming majority of business owners and managers—who were identified as at risk because of a history of identity theft episodes at their businesses—openly embraced training which involved roll playing, customer service tips and more importantly, advising the business what the new Red Flag Rules. Standards which when enacted would protect business profits as well as the community personal finances.


When calculating losses to the community, we take pause at the billions of dollars and numerous hours lost by consumers.


However, there are also two often overlooked, yet substantially financially draining, occurrences


One entangles police departments, as man-hours are spent investigating financial crimes and taking associated reports


The second involves merchants wasting time and money fighting the dreaded “chargeback,” trying to prove they processed a check or credit card transaction correctly. 



Specific Objectives:


 Select a Director of Financial Crime Prevention.”


 Activation of multiple, community based, Offices of Privacy Protection. 


 Create a civilian police division victim’s assistance desk, staffed by credentialed “tech reserves.”  These fraud specialists will act as victim affidavits providing forms, recourse phone numbers, and the capability of giving proper guidance to victims. 


 Forming a cadre of paid and volunteer trainers to interact with the community, providing consistent information, designed to impact lives and protect business profits.  Training would encompass credit card fraud, bank account fraud, computer intrusions and current scams such as Ponzi schemes.


Establishing guidelines for business computer and paper data security.

This includes using municipal codes to tighten procedures in often overlooked points-of-compromise, such as patient information at medical practices and applications for credit at mortgage companies. 


Create new business standards in the form of consumer protection municipal codesThese new laws would outline retail responsibility holding merchants financially responsible for violating previously agreed to contracts they have made with financial institutions.  Currently, when they violate these contracts they place consumers at risk and in most cases they are not held financially responsible for fraudulent credit card transactions. 


These procedures are mandated by the regulations such as; HIPAA, the Federal, Fair and Accurate Credit Act of 2003 and in some cases the new Federal Red Flag Rules. 


These “best practices,” are outlined in all merchant fraud prevention brochures distributed by all credit card issuers, but they are largely ignored by the business community.


 Opening public shredding centers.



Develop a program to educate middle and high school students what constitutes a financial crime and how committing such crimes adversely impacts the lives of the victims as well as the perpetrators. An arrest for a financial crime is as damaging to a young person’s future as drug abuse. 


Conduct regular mandatory new business and license renewal workshops, outlining best practicesA fee can be charged for attendance at this educational seminar, and a high charge can be added to the license fee in the event of non-compliance and non-attendance. 

"Let World Class Speakers & Entertainers enhance your next event by providing the appropriate speaker or entertainer to fit your program and budget requirements."

- Joseph I. Kessler, President
Connect with me on LinkedIn

You may register as a Speaker, Entertainer or Entertainment: Speaker/Entertainer Registration
We welcome submissions of eNewsletter articles by Speakers: Submit Article