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WHAT NOT TO DO WITH YOUR TAX RETURN

Posted on March 25, 2009

      Do you have a home computer? You think you're being careful with what you read, save and share from it? Guess what? Chances are you could be a cyber-crime victim just waiting to happen.

      As the economy continues to tank, criminals are rising to new heights in the number of scams and identity thefts they pull off on a daily basis. Their base of operation is anywhere in the world.

      "Back in the 90s, it was like kids on the block throwing rocks saying, 'Let me break something,'" says Martin Schmidt, founder of a major east coast based cyber security firm, "Now it's organized criminals saying, "Let me steal something,'" and they're stealing from both businesses and individuals in astounding numbers.

      Schmidt runs the Information Defense Corporation. He's usually explaining to Fortune 500 CEO's why they need to make computer security a top priority to keep their intellectual property and client lists safe. He agreed to give me a primer on how the rest of us can protect ourselves too.

      "I don't need to come to your house to find out what's in your house," he said. "I can just enter through your computer. Do not store information there that you don't want the world to see."

      Cyber identity theft is one of the fastest growing crimes around these days according to the U.S. Secret Service which, along with the FBI, investigates these crimes. Two major independent studies report an estimated 10 million Americans were victims of identity theft last year.

      Kathy and Tony Bucci were recently featured on NBC's Today Show and they told a disturbing story of how an identity thief breached their computer, stole a copy of their tax return and fraudulently submitted it to the IRS. The Bucci's hefty refund check was then diverted, via a wire transfer into an account no one can find now.

      It seems natural to save a copy of your taxes on your computer but Schmidt says that's a terrible idea. Once a thief gets a hold of a document like that he or she also gets your Social Security number, home address, date of birth and all the particulars about your income. Next, they assume your identity, applying for credit cards and bank loans in your name. They stain your credit history and generally make your life a living hell.

      So what can you do to keep the bad guys out of your computer and away from your personal information?

      First, don't give them a way in. "Always know who you're dealing with," says Schmidt. Do on-line shopping only with reputable merchants, use on-line banking sessions carefully and never over a wireless connection, be careful what your kids do on the family computer because the simple act of downloading music creates a pathway for hackers. These pathways work in both directions. You bring music in, hackers can take information out.

      "That computer is part of your person. It is an electric extension of you," Schmidt warns. Therefore, lesson number two: Curb yourself if you're tempted to open e-mail from a strange address. Hackers know how to get your attention and often use pleas for charity or promises of free goods or easy money as a way in. Their messages carry a hidden "Trojan", also called a virus, a worm or malware that infiltrates your computer and opens up a pathway back to the hacker. Before you know it the thief is scanning your files looking for information to exploit.

      And here's a scary revelation. When these criminals steal your vital information they're smart enough not to store it on their own computer. They pick a random repository site and dump it there where it can go undetected for months. It's also often sold to other criminals. That dodgy behavior recently resulted in more than a million tax returns, student loan applications and credit reports being available on line and easily accessible with a mere Google search. The Bucci's were shocked to find their stolen tax return displayed on line earlier this year for all the world to see.

      Computers are a way of life these days. They are also a criminal's delight. If you don't have good anti-virus security on your home computer it's like leaving the keys in the car or your front door wide open.

      So, when you finish up this year's tax return do yourself a favor. Resist the urge to store it electronically. Better to simply write down all your sensitive data and put it in a lock box. Once you delete it from the computer it won't be gone entirely but it will be harder and more time consuming for a hacker to find so perhaps they'll skip you and move on to the next target.

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