By Sheffer, Todd
Business Credit , Vol. 99, No. 9
NACM Exposes the Crimes that Affect the Computer Industry
REPRESENTATIVES FROM COMPUTER MANUFACTURERS, distributors and retailers, along with members of law enforcement, finance and credit reporting recently gathered in Las Vegas to attend the Loss Prevention Department's first ever Computer Industry Fraud Symposium. The Symposium highlighted the crimes that are costing the computer industry billions of dollars each year.
Attendees were exposed to numerous case studies of crimes that have targeted their industry, and shown warning signs which will allow them to avoid many of these fraudulent situations. Attendees agreed that the industry specific aspect of the fraud symposium was a good idea. Comments like, "it was nice to hear from other people in the same industry" were common among the responses.
Many of the attendees were shocked to hear that violent organized criminal groups have targeted their industry. The Symposium opened with Nassau County Detective Jim Kuhner relating the amazing exploits of Steven Carl Hutzenlaub, "the credit manager's worst nightmare." Detective Kuhner told how Hutzenlaub, while in prison on check fraud charges, perfected a scheme to bilk suppliers out of product by placing orders under the names of the supplier's existing customers.
Attendees listened to tapes of Hutzenlaub ordering tens of thousands of dollars of computer equipment from a public telephone inside the prison. Not even the overwhelming noise found in overcrowded prisons deterred Hutzenlaub--he merely explained that he was calling from an airport or from a warehouse. "It's amazing how Hutzenlaub was able to learn so much about a company's operations just by calling and asking questions," said one of the attendees. Detective Kuhner showed how Hutzenlaub would get companies' employees to give customer account information and change routing codes. "Hutzenlaub is a true con man, he can talk anybody into anything," said Detective Kuhner.
By showing how Hutzenlaub was able to get away with his scheme, Detective Kuhner showed the attendees how to avoid becoming a victim. If a credit manager can see how Hutzenlaub was able to get employees to give account information and to change shipping and tracking information, the credit manager can then take that information back to their company and install the necessary defenses.
Allan Trosclair, vice president of Fraud Control for VISA USA showed attendees all of the new techniques that are being used by credit card criminals. Trosclair also detailed the operations of VISA, showing how millions of transactions are completed every minute. He said that credit card fraud had increased 10 percent in 1996, making it a $400 million per year problem. Trosclair gave the audience the facts about credit card transactions. Many of the attendees did not like what they heard when Trosclair said that sales transactions without a card imprint or signature are the most risky. Unfortunately, most companies allow this method of payment. Trosclair also said that credit card fraud using the identity of a real person is on the rise.
Other speakers said that they have seen an increase in credit card identity fraud also. They said that organized crime gangs have people working in rent-a-car and mortgage companies to steal the personal information of the public. One speaker asked the attendees to think about all of the personal information that they submit when they rent a car (driver's license, social security card, credit card). Many times, that personal information is later used by the credit crooks to manufacture credit cards and identification using the information. The crooks can then obtain goods and services under the name of a legitimate individual. Even more alarming is the fact that law enforcement does not know how to stop such crimes. Law enforcement could only advise attendees to regularly pull copies of their own credit report to check for any suspicious activity. …