Protecting Your Company From Fraud

While new technologies are making it easier than ever for unauthorized users to access account information, financial institutions are working hard to protect your company's corporate accounts. A 2010 ACI Worldwide Global Card Fraud Survey of 4,200 consumers reveals the following: while the percentage of consumers who have experience fraud has increased from 18% in 2009 to 29% in 2010, the percentage of consumers who were satisfied with their financial institution's response to fraud has similarly increased from 75% in 2009 to 79% in 2010.

Protecting your company from fraud is important. Your financial services provider plays a role in your account's safety, but you should understand how you can protect your company as well.

Your financial services provider

The first step in protecting your company is to make sure you are working with a financial services provider who has a strong risk management department. At most financial services companies, this kind of department will track spend patterns across all accounts and also across each company's accounts. Once patterns are recognized, these teams can tell when any transactions occur outside of normal patterns, signaling a suspicious or fraudulent transaction. A strong risk management team will have systems in place to ensure you are contacted immediately when suspicious activity has occurred on your account. The ACI Survey shows that 54% of consumers want to be contact by mobile means - either a phone call or SMS text - if there is suspicious activity on their accounts.

What else can you do?

1. Set limits on your cards and accounts. Several financial services providers have advanced platforms that allow you to set your own controls and limits on accounts. If you only want purchases to be made at certain times of the day, at certain retail locations, or below certain dollar amounts, these providers will work with you to establish these types of controls.

2. Educate your cardholders. Chances are, the more your employees know about their cards and the limits set on each, the more precaution they will take in safeguarding them. You may also want to consider educating your cardholders on the different kinds of card fraud to look for, including skimming, dumpster diving, and social engineering.

3. Monitor your accounts. Since you are the person most familiar with your company's spend, it is possible that you may notice suspicious activity on your accounts before your financial institution. Keeping a close eye on transactions and making a habit out of pulling reports can go a long way in protecting your company from fraud.

Comdata offers a comprehensive suite of Enhanced Authorization Controls to help you effectively mitigate card fraud. With a state-of-the-art technology platform to monitor card transactions, as well as options for additional restrictions and enhanced reporting, Comdata can customize an enhanced authorization controls program to meet your unique business needs.

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How to Properly Avoid Credit Card Fraud

Arm Yourself

Credit card fraud can happen to anyone and is becoming more common. You need to arm yourself with the knowledge of how to prevent it and what to do if it happens to you. Hold onto your credit card receipts and dispose of them properly. While most places are now hiding your credit card numbers and only showing the last four digits this is not always the case. Some receipts will still show your entire credit card number and if you have placed your signature on it as well then a thief has enough info to go on with just that alone. They can put in for a change of address to your credit card company and spend it all before you ever know what happens. You'll wonder why your bill hasn't come in yet, and if you put it off, the collectors will come calling. Don't wait, if your bill is late then you need to call your credit card company and find out why, and also to check if there are any charges that you have not placed on the card.

Properly Dispose of Personal Info

So it turns out you have great credit and receive regular offers from credit card companies with great interest rates, but you have enough cards so you toss your junk mail in the trash, sometimes without even opening it. Bad idea. Many thieves will happily dumpster dive to get some good info. They can take those pre approved offers, and often times don't even need to speak to an actual person. They will open the card in your name through an automated system to make things fast and efficient and start spending your money as quickly as possible. Shred those offers, dunk them in water, burn them, whatever it takes to get your information scattered, hidden, and difficult to contend with. Make it difficult for those thieves so they won't want to mess with it. You can 'opt out' of these offers by sending a request or calling the company and asking them to remove you from the list.

What about those old deposit slips at the back of your checkbook that you never used? You know the ones with your name, complete physical address, your account and routing number. Someone could very easily transfer money to a temporary account, or just write a bad check to deposit and sign for the money in the less cash received section. Black out all the info and shred them before you throw them away. The same goes for voided checks.

Don't Give Out Your Info Unless Necessary

Your social security number is, unfortunately, your identity when it comes to many things, including your credit. Make sure it is absolutely necessary before giving out this information. If a company calls you, claiming they need to update your information, get their number and call them back before you give any of it out. Many identity thieves will call you, pretending to be some credit company associated or working with your credit card company and ask to 'update your info' and you will give them all the info they need to open up accounts and start spending.

Monitor your spending. If anything shows up that you did not buy, call immediately. If your bill is taking longer than expected to get to you, call. Automated systems make things easier not only for you, but for identity thieves as well. Go paperless if possible so you don't have any physical papers a thief can get too easily. You can buy protection through many companies that will alert you if there any changes in your credit. In the end just be careful with any info that can lead to your bank or credit card account. Make sure you dispose of the information properly and you may be able to avoid the stress and hassle of identity theft.

I hope this will help you Prevent Credit Card Fraud but come visit us if you ever need to Report Credit Card Fraud

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Former TBW execs get prison time for roles in fraud (Reuters)

Alexandria, Virginia (Reuters) – Two former senior Taylor, Bean & Whitaker Mortgage Corp executives were sentenced on Friday to several years in prison for their roles in a nearly $3 billion fraud that took down the big lender and a major bank.

The fraud ran more than seven years until August 2009 when TBW collapsed after the U.S. housing market imploded, taking Colonial BancGroup Inc's (CBCDQ.PK) Colonial Bank with it and putting hundreds of people at the firm out of work.

Company and bank officials were accused of trying to cover up enormous losses by moving money between accounts at Colonial Bank and selling mortgage loans that did not exist, were worthless or already had been sold.

The Obama administration elicited guilty pleas from six senior executives. TBW's former chairman, Lee Farkas, was convicted by a jury in April on 14 counts of bank, securities and wire fraud as well as conspiracy.

"They knew that without their fraud scheme, TBW would fail," said Neil MacBride, the U.S. attorney for eastern Virginia. "They allowed Lee Farkas to control and manipulate them into doing what they knew was wrong, and now they will pay for their crimes."

It is one of the few cases in which prosecutors have been able to penetrate the executive suites of a major firm in the wake of the 2008 global financial crisis. Most prosecutions have involved lower-level employees or much smaller firms.

Desiree Brown, TBW's former treasurer, was sentenced by District Judge Leonie Brinkema to six years in prison after she tearfully acknowledged her wrongdoing. She pleaded to one count of conspiracy to commit bank, wire and securities fraud.

"It was never my intent to commit a crime," she told the court. "It was always my intent to fix the problem."

Prosecutor Patrick Stokes sought an eight-year sentence, telling the judge that Brown had "a substantial role in the fraud" and that she had been "blinded by her loyalty to Mr. Farkas."

Her attorney urged a lesser sentence, suggesting five years and noting that she was just a "country girl from Nebraska with a high school" education. She started as a receptionist before working her way up in the company.

Brinkema also sentenced TBW's former president, Raymond Bowman, to 30 months in prison. He had pleaded guilty to a conspiracy fraud charge as well as for lying to investigators when they raided the mortgage firm two years ago.

Prosecutors had sought five years in prison.

Brinkema gave lower sentences than sought by prosecutors. One prosecutor, Charles Connolly, urged the stiff penalties be imposed because "there needs to be a message sent to the Street" that the conduct was unacceptable.

However, the judge said the two were unlikely to commit crimes again, noted their cooperation and said that they were likely decent people. However, she said it was a massive fraud and the sentences would serve as a deterrent to others.

Connolly told the judge that the TBW investigation was ongoing. Farkas is due to be sentenced on June 27.

Before its collapse, TBW was one of the country's largest privately-held mortgage lenders, doing some $20 billion in mortgage sales a year, and Colonial Bank was one of the top 50 U.S. banks before regulators took it over.

Authorities have estimated the fraud at nearly $3 billion. The executives were also accused of misappropriating money from one of its own funding mechanisms which had two big investors, Deutsche Bank AG (DBKGn.DE) and BNP Paribas SA (BNPP.PA).

As losses mounted at TBW, the firm tried to drum up capital to help Colonial Bank win $553 million in funding from the federal bank bailout program known as the Troubled Asset Relief Program, prosecutors said. No money was disbursed.

The cases are: USA v. Bowman, No. 11-cr-118 and USA v. Brown, No. 11-cr-84 in U.S. District Court for the Eastern District of Virginia.

(Editing by Robert MacMillan)

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TBW execs involved in $3B fraud sentenced (AP)

ALEXANDRIA, Va. – Two executives at what had been the nation's largest private mortgage lender were sentenced to six and two-and-a-half years for their roles in a $3 billion fraud that officials have called the biggest criminal case to develop out of the nation's housing and financial crises.

Prosecutors had sought slightly longer terms of eight and five years, respectively, for Desiree Brown, treasurer at Ocala, Fla.-based Taylor Bean & Whitaker, and Raymond Bowman, the company's president. At the same time, though, prosecutors gave both credit for their cooperation in helping to unravel a series of complex financial frauds and deliver a guilty conviction against Taylor Bean's owner and chairman, Lee Farkas, who is expected to receive a significantly longer term when he is sentenced later this month.

"These TBW executives helped pull off one of the largest, longest-running bank fraud schemes in history," said Neil MacBride, U.S. Attorney for the Eastern District of Virginia. "They knew that without their fraud scheme, TBW would fail. They helped Lee Farkas do what they knew was wrong, and now they will pay for their crimes. At the same time, these defendants agreed to cooperate with the government and that cooperation was clearly taken into account in the sentences imposed today."

Taylor Bean cheated three banks, including Alabama-based Colonial Bank, out of nearly $3 billion over nearly a decade before the scheme unraveled in 2009, resulting in the collapse of Taylor Bean and the loss of jobs for its 2,000 workers, as well as the collapse of Colonial, which had been one of the 25 largest banks in America.

In large part, Taylor Bean concealed its fraud by selling or using as collateral mortgages that had already been sold to other investors. Mid-level executives at Colonial participated in the scheme and helped conceal the massive hole in Taylor Bean's account, at first to preserve their relationship with Taylor Bean and later because they were complicit and felt they had no choice but to continue.

Deutsche Bank and BNP Paribas were the other banks that were cheated in the fraud. They lost roughly $1.5 billion in commercial paper — essentially IOUs — that were supposed to be fully collateralized but had next to nothing backing them up.

The scheme also included a failed attempt to use the cooked books at Colonial and Taylor Bean to try to obtain more than $500 million in emergency funding from the government's Troubled Asset Relief Program (TARP).

Brown, 45, who received the six-year sentence, started at Taylor Bean as a receptionist and was elevated to treasurer and earned $500,000 annually even though she held only a high-school degree. Prosecutor Patrick Stokes said at Friday's sentencing that Farkas elevated Brown because he could easily manipulate her due to her lack of experience.

"She was blinded by her loyalty to Mr. Farkas," Stokes said.

Brown apologized for her actions.

"It was never my intent to commit a crime," she told U.S. District Judge Leonie Brinkema. "I'm very angry at myself for ... letting someone manipulate me into going against my morals."

Bowman, who received a two-and-a-half year term, may be called to testify against others in what is an ongoing investigation, said prosecutor Charles Connolly. Bowman and Brown were the first two to be sentenced out of seven, including Farkas, who have already been convicted.

Bowman, 45, told Brinkema that "all the people in this are basically decent people" who made mistakes. He asked Brinkema to show lenience toward Colonial executive Catherine Kissick, who will be sentenced next week. Bowman said that he and Farkas put Kissick in an impossible position and "basically ran her over." According to trial testimony, Taylor Bean already owed Colonial several million dollars by the time she first learned of the problems. Over the years, that grew to hundreds of millions of dollars as Farkas and others essentially ignored her constant entreaties to fix it.

Neil Barofsky, the former special inspector general at TARP whose office helped uncover the fraud, has called the Farkas case "the most significant criminal prosecution to date rising out of the financial crisis."

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