Washington, DC — The Financial Industry Regulatory Authority (FINRA) today warned investors about a new scam involving online job classifieds that fraudsters use to carry out identity theft and financial fraud.
In the Investor Alert Beware of Online Job Classifieds Used to Steal Your Identity, FINRA describes the latest variation of the identity theft tale. Stock traders, posing as employees of a made-up Latvian brokerage firm, appear to have stolen personal information from individuals who thought they were applying for a job through the popular classifieds website, Craigslist (www.craigslist.org).
"Investors should always be on their guard for identity theft tactics when conducting any activity on the Internet," said John Gannon, FINRA's Senior Vice President for Investor Education. "Investors should make sure that anyone who is asking for a Social Security number or other personal information is running a legitimate business before they decide whether to give out such sensitive information."
According to a complaint filed by the Securities and Exchange Commission (SEC), these traders allegedly used the job applicants' Social Security numbers, dates of birth and other information to open up online brokerage accounts. Applicants were told that the firm would need this information to conduct company "background checks" - because the firm would be entrusting them with the firm's money. The traders appear to have communicated with their unwitting applicants only by email or fax.
After "hiring" several individuals, the firm allegedly sent funds to those individuals' personal bank accounts using wire transfers from Russian bank accounts and a Western Union money order. The individuals were instructed to wire those funds from their bank accounts to specific account numbers - which corresponded to brokerage accounts opened with their personal information, without their knowledge.
In addition, the traders allegedly used stolen user IDs and passwords to gain unauthorized Internet access into existing brokerage accounts of unsuspecting victims. Using the new and existing brokerage accounts, the traders used sophisticated strategies to trade and manipulate the prices of a number of thinly traded stocks - at a handsome profit.
The FINRA Investor Alert issued today recommends that job seekers take the following steps to protect themselves from similar scams:
- Be suspicious of anyone asking for your personal information. According to Craigslist, many identity theft scams that have appeared on their website involve one or more of the following: an inquiry from someone far away, often in another country; use of Western Union, Money Gram, cashier's check, money order, escrow service or similar instrument; and, a refusal by the other party to meet face-to-face before consummating a transaction.
- Know who you are doing business with. Independently verify whether a potential employer in the securities industry is legitimate before handing over any personal information. Today's Investor Alert details a variety of online resources for verifying the authenticity of brokers and brokerage firms, investment advisers, insurance agents and insurance companies and non-U.S. financial institutions.
- Don't Respond to Emails Requesting Personal Information. Legitimate companies will not ask you to provide or verify sensitive information through email. If your financial institution actually needs personal information from you or your statement, call the company yourself — using the number in your files or on your statement, not the one the email provides! Also, never click on links embedded in emails, no matter who the sender claims to be or if the address in the email looks right. These links may actually take you to a spoofed or fake website. You should always type in a web address yourself, directly in the web browser address bar.
- Ask questions. When an individual or entity asks for your Social Security Number, ask the following questions: Why do you need my SSN? Will you accept a different form of identification (such as a telephone number, driver's license or passport)? If "no", why not? How will you use my SSN? How do you protect my SSN and other information from being stolen or misused? What will happen if I don't provide my SSN?
- Order a copy of your credit report. It's a good idea to check your credit report every year. Look for accounts you did not open and any unexplained transactions.
- Review your account statements. This is your last line of defense. If you are victimized, the sooner you catch it, the better. Regularly review your online account information for unauthorized trades, cash withdrawals, or any other unrecognized activity. Do the same as soon as you receive each monthly or quarterly statement. Immediately report any suspicious activity to your brokerage firm.
Individuals who believe they've become a victim of identity theft should respond quickly. Valuable tips and step-by-step instructions are available on the Federal Trade Commission's Identity Theft Web site and on FINRA's online Identity Theft Checklist. Individuals who become victims of a brokerage firm identity theft scam should contact FINRA's Complaint Center, the Securities and Exchange Commission or their state securities regulator.
Additional information is available through the FINRA online resources Protect Your Identity; Keeping Your Account Secure: Tips for Protecting Your Financial Information; "Phishing" and Other Online Identity Theft Scams: Don't Take the Bait"; and, Well-Traveled Fraud-Advance-Fee Scams Target Non-U.S. Investors Using Fake Regulator Web Sites and False Broker Identities. Other valuable resources include the Federal Trade Commission's OnGuard Online and the SEC's "Phishing" Fraud: How to Avoid Getting Fried by Phony Phishermen.
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FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States. Created in 2007 through the consolidation of NASD and NYSE Member Regulation, FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business-from registering and educating all industry participants to examining securities firms; writing and enforcing rules and the federal securities laws; informing and educating the investing public; providing trade reporting and other industry utilities; and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit our Web site at www.finra.org.