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Medical Identity Theft on the Rise

WASHINGTON – If modern technology has ushered in a plague of identity theft, one particular strain of the disease has emerged as most virulent: medical identity theft.

Last month, the Identity Theft Resource Center produced a survey showing that medical-related identity theft accounted for 43 percent of all identity thefts reported in the United States in 2013. That is a far greater chunk than identity thefts involving banking and finance, the government and the military, or education. The U.S. Department of Health and Human Services says that since it started keeping records in 2009, the medical records of between 27.8 million and 67.7 million people have been breached.

The definition of medical identity theft is the fraudulent acquisition of someone’s personal information _ name, Social Security number, health insurance number _ for the purpose of illegally obtaining medical services or devices, insurance reimbursements or prescription drugs.

“Medical identity theft is a growing and dangerous crime that leaves its victims with little to no recourse for recovery,” said Pam Dixon, the founder and executive director of World Privacy Forum. “Victims often experience financial repercussions and worse yet, they frequently discover erroneous information has been added to their personal medical files due to the thief’s activities.”

The Affordable Care Act has raised the stakes. One of the main concerns swirling around the disastrous rollout of federal and state health insurance exchanges last fall was whether the malfunctioning online marketplaces were compromising the confidentiality of Americans’ medical information. Meanwhile, the law’s emphasis on digitizing medical records, touted as a way to boost efficiency and cut costs, comes amid intensifying concerns over the security of computer networks.

Edward Snowden, the former National Security Agency contractor who has disclosed the agency’s activities to the media, says the NSA has cracked the encryption used to protect the medical records of millions of Americans.

Thieves have used stolen medical information for all sorts of nefarious reasons, according to information collected by World Privacy Forum, a research group that seeks to educate consumers about privacy risks. For example:

A Massachusetts psychiatrist created false diagnoses of drug addiction and severe depression for people who were not his patients in order to submit medical insurance claims for psychiatric sessions that never occurred. One man discovered the false diagnoses when he applied for a job. He hadn’t even been a patient.

An identity thief in Missouri used the information of actual people to create false driver’s licenses in their names. Using one of them, she was able to enter a regional health center, obtain the health records of a woman she was impersonating, and leave with a prescription in the woman’s name.

An Ohio woman working in a dental office gained access to protected information of Medicaid patients in order to illegally obtain prescription drugs.

A Pennsylvania man found that an imposter had used his identity at five different hospitals in order to receive more than $100,000 in treatment. At each spot, the imposter left behind a medical history in his victim’s name.

A Colorado man whose Social Security number, name and address had been stolen received a bill for $44,000 for a surgery he not undergone.

Perpetrators use different methods to obtain the information, ranging from stealing laptops to hacking into computer networks, according to Sam Imandoust of the Identity Theft Resource Center. “With a click of a few buttons, you might have access to the records of 10,000 patients. Each bit of information can be sold for $10 to $20,” he said.

According to HHS, the theft of a computer or other electronic device is involved in more than half of medical-related security breaches. Twenty percent of medical identity thefts result from someone gaining unauthorized access to information or passing it on without permission. Fourteen percent of breaches can be attributed to hacking.

“We say encrypt, encrypt, encrypt,” said Rachel Seeger, a spokesman for HHS’s Office For Civil Rights, which is charged with investigating breaches of medical records in health plans, medical practices, hospitals and related institutions.

The records in a laptop that a fired employee lifted from the North County Hospital in Newport, Vt., last year had not been encrypted. The laptop contained the records of as many as 550 patients. Around the time that breach was uncovered, HHS cited the hospital for a second breach involving two employees gaining access to records without authorization. Those cases are ongoing.

Wendy Franklin, director of development and community relations at North County, said the hospital generally does encrypt its records. Franklin also noted that North County requires all of its employees to sign agreements not to disclose medical records and to undergo training in confidentiality laws and procedures. She also said the hospital has instituted an audit to track access to private health records.

But, in the end, Franklin said, the hospital largely has to rely on the honor system.

Two federal laws govern the confidentiality of medical records: the Health Insurance Portability and Accountability Act (HIPAA), originally passed in 1996, and the Health Information Technology (HITECH) Act of 2009. Together they lay out what health care providers and affiliated businesses are required to do to protect confidentiality of patients.

According to James Pyles, a Washington, D.C., lawyer who has dealt with health issues for more than 40 years, all 50 states have their own privacy laws and 46 of them require consumer notification when there is a security breach of private records.

HHS can impose a civil fine of between $100 and $50,000 for each failure of a business, institution or provider to meet privacy standards, up to a maximum of $1.5 million per year. A person who knowingly violates HIPAA faces a criminal fine of $50,000 and up to a year in prison. If the perpetrator tried to sell the information for “commercial advantage, personal gain or malicious harm,” he or she could face a $250,000 fine and up to 10 years in prison.

The HIPAA law includes exceptions that allow a provider to share medical information without a patient’s permission. A common example is when hospital business offices share information for the purpose of seeking payment. But there are also exceptions for “public health activities,” “health oversight activities,” “law enforcement purposes,” and other purposes. No wonder, Pyles said, some patients are reluctant to disclose to a medical provider that they have a sexually transmitted disease or a mental illness unless they have to.

Under the HITECH law, a medical provider, health plan or medical institution must notify patients when a breach of their medical records is discovered. HHS must also be contacted. HHS discloses breaches involving 500 or more patients.

Discovery of the breach is useful but doesn’t correct the mischief that may have happened. Although patients can have corrected information put in their files, it’s difficult to get fraudulent information removed because of the fear of medical liability.

“It’s almost impossible to clear up a medical record once medical identity theft has occurred,” said Pyles. “If someone is getting false information into your file, theirs gets laced with yours and it’s impossible to segregate what information is about you and what is about them.”

Pyles describes the status quo as “the worst of two worlds,” he said. The U.S. has “a regulated industry that is saddled with laws with so many loopholes that they don’t know what they are responsible for, and a public that doesn’t believe their health information is being protected.”

Data Breach at Target – 40 Million Impacted

Article by Kelly Clay of Forbes Magazine

Do you shop at Target? If so, you may want to pay extra attention to your credit and debit card bills during the next few months. According Krebs on Security, Target is investigating a data breach that has potentially affected millions of customer credit and debit cards. These sources say the breach appears to have begun around Black Friday 2013 and involves the theft of data stored on the magnetic strip of cards used at stores. The breach apparently extends to nearly all Target locations across the U.S.

UPDATE 9AM ET, Dec. 19: Target confirmed today that the data breach has affected 40 million customers. According to its statement, “Approximately 40 million credit and debit card accounts may have been impacted between Nov. 27 and Dec. 15, 2013. Target alerted authorities and financial institutions immediately after it was made aware of the unauthorized access, and is putting all appropriate resources behind these efforts.  Among other actions, Target is partnering with a leading third-party forensics firm to conduct a thorough investigation of the incident.”

This obviously is not good news for Target and its customers, as the breach hit during some of the busiest shopping days of the year. While sources tell Krebs that the breach was initially thought to have occurred from just after Thanksgiving 2013 to Dec. 6, investigators have discovered evidence that the breach may have extended at least an additional week — possibly as recently as Dec. 15.

Krebs explains that the type of data stolen — also known as “track data” — allows crooks to create counterfeit cards by encoding the information onto any card with a magnetic stripe. If the thieves also were able to intercept PIN data for debit transactions, they would theoretically be able to reproduce stolen debit cards and use them to withdraw cash from ATMs.

Target has not yet responded to requests for comment on the rumored breach so far, but an anti-fraud analyst has made it clear the situation could not be any worse for Target and its customers, telling Krebs, “We can’t say for sure that all stores were impacted, but we do see customers all over the U.S. that were victimized.”

How Is Holiday Shopping Turning Out in 2013?

Article by Selena Maranjian of DailyFinance.com & Writer for the Motley Fool

Ah, the holiday retail season, when most of us scurry around, shopping for gifts for loved ones, and trying to take advantage of the best sales we can find. You’ve been here before: You know the score.

Or do you? Here are a few interesting details you may not know about this year’s winter spending dash.

  • About one quarter of Americans surveyed recently said that they never miss or usually visit at least one store on Black Friday.
  • Apparently some Black Friday participants from seasons past stayed home this year, though, or maybe they just bought less, as the total take for the weekend, per the National Retail Federation, was down by $1.7 billion, or 3 percent.
  • If 3%  doesn’t seem too meaningful, consider this: The holiday season accounts for between 20% and 40% of typical retailers’ total annual sales.
  • Those who think the idea of big crowds crushing their way into stores in the middle of the night sounds dreadful can take heart, because online shopping continues to grow rapidly. Black Friday was this holiday season’s first billion-dollar-plus online shopping day, with the total online take for the day of $1.2 billion, up a hefty 15 percent over last year.
  • Not only are shoppers shopping online more (a record 66 million of them on Black Friday), they’re also increasingly shopping via their mobile devices. Yes, you probably knew that. But you might not realize just how fast the shift has been. On Black Friday, for example, Walmart’s (WMT) website may have been a little slow at times, but that’s because it had some 400 million pages viewed, and 53 percent of those were perused from smartphones or tablets. The number of purchases made via mobile devices tripled the previous year’s level.
  • Parental love, meanwhile, is close to boundless, even is our bank accounts are far from it. Fully 57 percent of parents reported that they were going to take on debt over the holidays in order to buy gifts for their kids. Interestingly, per a recent survey, those with household incomes of less than $35,000 said they were willing to take on an average of $700 in debt, while those bringing in $75,000 or more were thinking about $300.
  • Taking on debt isn’t the end of the world as long as it gets paid off promptly. But many Americans don’t seem to have such a fiscally responsible outlook: 36 percent in one survey said that buying presents for loved ones was more important than sticking to a budget or not taking on more credit card debt.
  • Retailers will be happy to note that of the 90 percent of Americans planning to buy gifts this season, almost a third of them (31 percent) approach the task with no predetermined spending limit.
  • If that sounds financially shaky, consider that fully 55 percent of adult Americans surveyed in September had not yet saved any money for the holiday shopping season.
  • Still, the National Retail Federation is hopeful about the 2013 holiday shopping season, projecting a 3.9 percent increase in total sales over 2012.

The holiday shopping season will always be with us, though it’s always changing and evolving. But traditionalists can take comfort that some things don’t change too quickly: About 26 percent of shoppers plan to buy Barbies for girls, and more than 10 percent are planning on Legos for boys.

Avoiding The Holiday Spending Hangover

USA Today – Alex Veiga, AP Business Writer   

It’s a holiday season tradition that you don’t want to observe. Many consumers spend more than they can afford, often racking up huge credit card balances.

But there’s no need to exit the season of giving in worse financial shape than when it began. That’s a lesson Suki Eleuterio learned after spending recent years stretching her finances to buy holiday gifts.

“I found myself just swamped in debt and trying to pay off bills from last Christmas and the Christmas before,” said Eleuterio, who lives in Fort Lauderdale, Fla.

The marketing and public relations executive resolved this year to control spending, an effort that has her on track to pay off $10,000 in credit card and student loan debt by year’s end. She’s also tackling holiday gift giving differently than in years past.

Eleuterio, 30, plans to spend about one quarter of the $300 to $400 she shelled out last year on gifts. And she’s avoiding credit cards.

“If I can’t afford to pay for it right now then I won’t buy it,” she said.

Here are some tips for managing your holiday season spending:

1. DRAW UP A BUDGET

Santa makes his list and checks it twice. More holiday season shoppers should be as thorough.

Establish a budget that lays out how much you plan to spend on each person on your list. Then stick to it.

“That way you’re not walking around the mall with a credit card with a $20,000 limit, window shopping, with no plan, no strategy and no discipline,” said John Ulzheimer, of Credit Sesame, a credit management website.

He also suggests capping your gift budget at a level that won’t jeopardize your other financial obligations.

“It’s almost like going to Las Vegas,” Ulzheimer said. “Take only the money that you’re comfortable losing.”

2. MARRIED? SET LIMITS TOGETHER

More than half of married couples said they have paid with cash to cover up large purchases, and more than one in 10 married individuals has taken out a credit card in their own name to hide spending from their spouse, according to a survey released last month by McGraw-Hill Federal Credit Union.

That’s potentially bad news for those couples’ finances, if not their marriage.

The trend is a symptom of the pressure many couples feel to impress their significant others, said Shawn Gilfedder, president and CEO of McGraw-Hill Federal Credit Union.

It also reflects how many people don’t plan or communicate well when it comes to financial matters.

He recommends using online applications like Mint.com or FinanceWorks.com, which enable couples to share their financial information at a glance.

Eleuterio’s approach: She and her husband, Robert, plan to stick to a ballpark estimate they each agreed upon for how much to spend on each other’s gifts.

3. AVOID THE CREDIT TRAP

In a survey by the National Retail Federation last month, nearly 44% of consumers said they planned to use a debit card or check card most often when buying holiday gifts. But nearly 29% said they would rely on credit cards.

Unless you plan to pay your holiday charges in full by the due date, avoid using credit.

You’ll pay more in the long-run and carrying higher balances for several months could lower your credit score, making it more expensive to refinance your home, buy a car or qualify for other loans.

4. CASH IN REWARDS

Another way to cut back on holiday spending is to use rewards points that you may have accrued on your credit cards or airline mileage loyalty programs.

Some cards offer cash back, credits against your balance or even special deals to buy gift items from a points redemption store. Major card issuers such as American Express, Chase, Citi and Discover offer some type of points reward program.

5. BEGIN SAVING EARLY

Start setting aside money well before the stores get into holiday season mode.

Although it may be too late for this year, evaluate how much you end up spending so you can budget for next year, said Katie Bryan, spokeswoman for America Saves, a campaign of the Consumer Federation of America.

Once you pay off this season’s purchases, start paying into a holiday savings account for next year.

Eleuterio began saving for the holidays a few weeks ago, setting aside about $25-$50 a paycheck.

Here’s a worksheet for crafting a savings plan: http://www.americasaves.org/for-savers .

And if you need help tackling your post-holiday debt, counseling agencies approved by the Department of Housing and Urban Development offer free services. They can be found on http://www.hud.gov .

6. GIVE OF YOURSELF

Eleuterio skipped out on Black Friday and plans to avoid malls this season. Instead of buying gifts, her holiday budget will go toward supplies to create personalized framed photos, poetry, baked goods and other homemade gifts. She also plans to cook dinner for some friends.

The approach has helped her understand the holiday season is more than just a shopping spree, Eleuterio said.

There’s something much more to the meaning of the holiday, she said, “and if you’re not just spending money the whole time, you get to actually see it.”

Black Friday – Avoiding Debt

Article by Anisha Sekar – Market Watch.com

Older Americans are disproportionately likely to be in debt. A 2012 Demos survey found that citizens 65 and older typically carried $9,300 on their credit cards, the most of any age group. Debt burdens are increasing, too. According to the Urban Institute, 43% of seniors had some debt in 2010, compared with 30% in 1990. Stock market rally notwithstanding, debt burdens continue to rise for many older Americans.

Unfortunately, the holiday season — between travel and buying gifts for the family — often only exacerbates these difficulties. A recent NerdWallet study found that 28% of consumers over 60 said that they don’t bargain-hunt for their holiday purchases, preferring convenience over savings. Further, they were the least likely to brave the Black Friday crowds. Only 6% said they would do the bulk of their shopping on Thanksgiving weekend, compared with 11% of those aged 45-60 and a full 16% of those aged 30-44. Forgoing lower prices for convenience can be costly in the season of hectic crowds and deep discounts, but it doesn’t have to be. Here are five tips for dodging debt on Black Friday, without braving a crowd of angry deal-hunters.

1. Take advantage of price match

If you have a Citibank credit card, you can use their Price Rewind feature to get Black Friday prices before you’ve sat down to turkey dinner. Simply make the full purchase on your Citicard, register the purchase with Price Rewind, and submit a dated copy of the ad with the lower price. Keep in mind that the minimum claim per item is $25, and the maximum is $250. MasterCard and Discover cards also have price-protection programs. While some exclusions apply (jewelry isn’t covered, for one), this is a good way to get deals on electronics, appliances and more while still enjoying Thanksgiving dinner.

2. Avoid layaway programs

While layaway programs have lightened up on their fees in the past few years, most of them have one major caveat: if you end up not making the purchase, you have to pay a cancellation fee. Wal-Mart, for example, levies a $10 charge if you don’t pick up the item and pay in full by December 13th. If you need help saving up, you’re better off with a Christmas savings account at a credit union. That way, if circumstances change and you can’t afford the item (or if you simply change your mind), you aren’t wasting money.

3. Search for low-effort discounts

Getting a deal doesn’t necessarily mean door-buster sales or mashed potatoes eaten in line at Target. Most credit cards grant access to an online rewards mall like ShopDiscover or Chase Ultimate Rewards, where you can get up to 20% cash back on major online retailers simply by clicking through the website. For example, Chase gives 5% cash back at Macy’s, and ShopDiscover offers 15% back on North Face purchases. Even if you don’t have a credit card, cash-back websites like ShopAtHome.com and Upromise can earn similar discounts.

4. If debt-free isn’t an option, minimize the cost

Finally if you find yourself unable to make ends meet for whatever reason, try to keep your interest payments as low as possible. Your best bet is probably a 0% interest credit card that offers 15 to 18 months of breathing room before you start incurring finance charges. Alternatively, a secured loan, like a home equity line of credit, is a viable option if you’re sure you can pay it off. Try to avoid putting the purchases on credit cards that charge interest, because those rates are typically the highest.

Are You a Financial Cheater?

Article by Michele Lerner Nov 14th 2013 5:00AM

If you’ve ever lied about your spending or pocketed change you didn’t deserve, you’re not alone. Two new surveys reveal that a surprisingly high percentage of people are willing to cheat financially, and that women tend to be more honest than men when it comes to money.

According to a recent survey by Money-Rates.com, 37 percent of respondents say they’ve kept excess change handed to them by a cashier. And, 25 percent said that they would or might do it again in the future if the opportunity presented itself.

When the survey separates respondents by gender, women appear to be more honest than men. In fact, according to the survey, men are more likely than women to cheat on their taxes, pad an expense account, and fudge the truth to an insurance company.

The survey results suggest that women are more susceptible to guilt, since while 35 percent of women say they’ve kept extra change from a cashier, only 21 percent say they would do it again. Among men, 39 percent say they’ve pocketed extra cash and 31 percent say they would do it again.

Among both genders, 25 percent say they’ve taken company property home from their employer for their personal use; 23 percent say they’ve cheated the IRS by not declaring all of their income — but 30 percent say they would cheat on their taxes if they didn’t think they’d get caught.

Couples and Cheating Financially

While some financial cheaters lie year-round, be it to the IRS or on their expense accounts, the holiday spending season can ratchet up tensions over money within families, and may lead to more incidences of financial infidelity.

A new survey by McGraw-Hill Federal Credit Union looked at couples and their holiday spending in three categories: heterosexual married couples, same-sex couples, and previously divorced people now in new marriages or relationships.
All of these couples said they disagreed over money sometimes. But according to survey results, straight married couples actually lie more to each other than the other types of couples.
Some of the survey findings include:

  • While 34 percent of straight married couples have lied to their partners about holiday spending; just 25 percent of same-sex couples and previously divorced couples admit to lying to their partners.
  • 48 percent of all straight couples disagree about how much to spend during the holidays.
  • 43 percent of previously divorced couples disagree about holiday spending.
  • 37 percent of same-sex couples argue about holiday spending.

Both straight married and previously divorced couples try to hide their overspending in various ways.

More than half of straight married people say they pay with cash to cover up large purchases, and more than 1 in 10 have taken out a credit card in their own name to conceal their spending. Among gay couples, only one-third say they cover up spending with cash purchases, but 15 percent say they’re likely to grab a bill and pay it before their partner sees it, compared to 9 percent in heterosexual partnerships.

Lying and overspending are bad ways to enjoy the holiday spirit. Instead, try mutually setting a budget, using your credit card or debt card rewards points for gifts, and finding less costly ways to give gifts and share the season.

Michele Lerner is a Motley Fool contributing writer.

Consumers Cutting Back for Holidays

For the fourth year in a row, the October poll hosted on the National Foundation for Credit Counseling (NFCC) website reveals that the overwhelming majority of consumers intend to either spend less than the previous year or nothing at all on holiday purchases.

The poll began querying consumers on holiday spending habits in 2010, one year after the recession officially ended. Taken in totality, the four-year set of data reveals only a modest gain in consumer optimism toward spending from year one to date. Combined with the fact that the Conference Board Consumer Confidence Index decreased sharply in October, it appears that consumers are still not inclined to begin spending, even for holiday purchases.

Taking a closer look at the four years of polling data reveals the following:

  • Data from years 2010 and 2011 reflect the most extreme periods of hardship, with identical results of 91 percent of respondents indicating they would spend less or zero on holiday purchases
  • The most significant jump came between 2011 and 2012, with a four percent year-over-year drop to 87 percent of consumers falling into the less or none at all spending categories, suggesting a modestly increased optimism toward spending.
  • There was no statistical difference between 2012 and 2013 data, with the most recent year revealing that 86 percent of more than 1,400 respondents selecting these categories as most representative of their holiday spending plans.

Looking at the other poll answer options, 11 percent intend to spend as they did last year, stating that their financial situation is stable, while 3 percent will spend more, feeling as though they are in a better financial position this year. These numbers are identical to 2012 results.

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