Tuesday, October 5, 2010 Edition #579

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Today’s Highlights:
1st Flash: BUSTED!   Past issues of GCFlash:
September 28, 2010 Edition #578
September 21, 2010 Edition #577
September 14, 2010 Edition #576
September 7, 2010 Edition #575

Looking for articles from a past issue of GCFlash not listed above? Find them in our Knowledge Base!
2nd Flash:  IN AND OUT OF DEBT


Weekly Spotlight:

Our Switch Kit contains all the forms you need to move your accounts to GCF Bank without a hassle. You'll find tools to open your new account, change your direct deposit and autopay withdrawal instructions and much more!

Our Current Rates:

For a listing of our current deposit and loan rates, visit www.gcfbank.com/rates.aspx.

1st Flash
BUSTED!

There's good news to report in the international arrests of 92 suspects charged with using the ZeuS Trojan to steal $70 million from U.S. bank accounts over the last four years. Another 19 people in London were charged with stealing more than $9 million in the U.K. over three months using the same malware. We covered this crime in a previous edition of GCFlash (http://www.gcfbank.com/gcf0817.asp).

The arrests led to the apprehension of five others in the Ukraine, where this fraud is believed to have been orchestrated. More arrests are expected.

Dubbed "Operation Trident," the investigation was triggered in May 2009 when FBI agents in Omaha, NE noticed fraudulent ACH payments made to 46 different bank accounts. They partnered with various local and international authorities to track the activity leading to the arrests.

The arrests centered around the money mules who opened bank accounts under false names in the country where the accounts were compromised. Most of these money mules entered the target countries under a student VISA and carried forged passports with a false name.

The stolen money would be deposited into their accounts and then transferred overseas to the perpetrator.

So while these arrests are good news, the threat is far from over. The investigation revealed that the ZeuS code is more widespread than originally thought.

These attacks are being carried out by highly organized crime rings. The 116 arrests have disrupted one gang, but they're far from putting the masterminds out of business.

The kit to build this Trojan is readily available through criminal Web sites. And rather than curtailing the threat, it's gotten more sophisticated.

The crooks are now targeting corporate online banking accounts rather than consumer accounts. It's a matter of economics. It's easier to steal $500,000 from one business customer than $500 from 1,000 consumers.

And ZeuS is not the only malware functioning this way. It's merely the forerunner in a new breed of criminal activity.

There are a lot of other malware writers out there competing to develop the next great threat. It pays well. The author of the ZeuS code has earned an estimated $15 million from license rights.

Traditional anti-virus software vendors are finding it hard to keep up with the ever-changing face of the ZeuS Trojan. With it being so readily available, each crime gang who deploys the product customizes it to their own purpose.

Expect to see stricter security controls coming your way in the near future. Some vendors may require something physical in your possession to confirm your identity, like a USB stick or token. Others may enforce tighter authentication methods. Certain institutions may choose to employ rigid fraud detection in the background where the consumer is not inconvenienced.

A multi-layered approach is your best defense against this threat. It bears repeating the same advice offered so often. Keep your firewall configured to its highest setting. Don't open e-mail messages from unknown sources.

These ploys succeed by playing on human interest, the curiosity inherent in our genes. They promise you something you can't resist such as pop-up boxes on your screen claiming you're the winner or sexy pictures of your favorite celebrity. But satisfying this curiosity comes at a high price.

As Halloween season approaches, we'll visit haunted houses or other attractions promising a scare around every dark corner. Consider the cyber world equally as dark. But unlike the holiday, the horror continues well after you turn the calendar page.

2nd Flash
IN AND OUT OF DEBT

Watch any television show and you'll be bombarded with commercials about debt relief. There is the group that claims they can slash your unpaid federal income taxes. Several others tout relief from credit card debt.

All promise to deliver something you're better off doing yourself.

Many Americans are finding themselves dealing with large amounts of debt they never expected. They lost their job or became ill, piling up medical bills. It became impossible to make ends meet.

Credit counseling provides a valuable service for those who are struggling. But not all agencies are legitimate. And it's fairly simple to tell which ones are taking you for a ride.

Reputable credit counselors will provide guidance on improving your credit score and help you develop sound financial management skills.

They cannot remove negative credit information from your report as long as it's accurate. The Fair Credit Reporting Act dictates what information the credit reporting agencies maintain on your record, and how long it must remain. Information provided by your creditors will appear for seven years, ten for a bankruptcy.

That same Act provides that the reporting agency must investigate any inaccurate or incomplete information you report to them, and correct any errors in a timely fashion, usually within 30 days.

The National Foundation for Credit Counseling is a non-profit credit counseling service. They can refer you to a member in your area should you decide to enlist help.

Then there are the scammers. Contrary to one advertisement, there was no debt relief act. The company simply targets those who will be charged the heftiest fee for their service.

Red flags should waive if the company you consider does not identify your legal rights and what steps you can take yourself for free. Stay away from a credit repair firm that instructs you not to contact a credit reporting company directly.

Avoid companies that offer to reinvent your credit identity, suggesting you apply for an Employer Identification Number to use instead of your Social Security number. Other scammers may advise you to dispute accurate information in your credit report. These acts are illegal. You could face charges if you follow their advice.

A scam company wants you to pay fees up front for their services, before they are performed. And the company suddenly disappears.

Or the scam credit repair service directs you to send your monthly bill money to them where they will divvy up among your creditors. They'll put your money in an escrow account while they negotiate lower payoffs or interest rates on your behalf. While they're haggling, your account falls into arrears. Your credit history is worse than when you started.

There is no magic answer for dissolving debt. Under most circumstances, it takes years to build. It won't disappear overnight.

Financial News
It seems like a good time to go back to basics with investing. There are many different types of investments that carry just as many levels of risk. To start with the basics, an investor can buy stocks or bonds from a company. Stocks represent equity securities which represent ownership of the company. Bonds are debt securities that represent money that a corporation has borrowed from the bond holder. The bond holder is ahead of a stockholder in getting paid if a company becomes insolvent. Legally, loans get paid before stockholders!

Both of these securities, or negotiable instruments, can be sold if there are willing buyers, or a market. Stock exchanges are big regulated places where they are traded. The NASDAQ and New York exchanges are two of the largest in the United States. Stocks that are traded through this type of market are regulated by the Securities and Exchange Commission, or the SEC. The SEC was created as a result of the Great Depression enforcing laws created beginning in 1933. There continue to be revisions with one of the most recent being the Sarbanes-Oxley Act in 2002. This was the congressional response to the corporate and accounting scandals with companies like Enron, WorldCom and Tyco. These problems cost investors billons of dollars and shook the confidence in financial statements that are regulated by the SEC.

The SEC expects an investor is going to make an informed decision when looking at the financial statements a company is required to file with them. An investor shouldn't put money into a company unless they understand what it is that they are buying. That can mean understand the financials, or hiring the expertise to understand them. No matter, stocks are not a fixed investment but fluctuate depending on the price from another willing buyer.

Bonds have a fixed term. If they are held to maturity, the investor will get the stated rate on the bond. If the bond is bought or sold before maturity, it will be sold at par - the stated rate, a premium - more than the stated rate, or a discount - less than the stated rate. This is where the bond market gets interesting! Bonds are also issued by government entities, a subject for another time!

Any investment is subject to a number of risks, including doing nothing with the money! Putting the money under the mattress causes a loss due to inflation, let alone the possibility of theft or fire. Keeping pace with inflation can be challenging. Being aware of the types of investments, the possible earnings and the risks associated with them is the first step. Each investor then decides how much risk they want to take compared to the possible risks. The huge investment industry shows how difficult this process can be!

Today’s Market Rates
Tuesday, October 5, 2010
Dow Jones Industrial Average
(Up 516.67 or 4.95% since 12/31/09)
10,944.72 (+1.80%)
S&P 500
(Up 45.65 or 4.09% since 12/31/09)
1,160.75 (+2.09%)
Nasdaq
(Up 130.68 or 5.76% since 12/31/09)
2,399.83 (+2.36%)
10 Year Treasury Bond Yield 2.46%  
British Sterling 1.5902  
Euro 1.3847  
On The World Wide Web

The Privacy Rights Clearinghouse answers your most frequently asked questions about debt collection on their web site.

The National Foundation of Credit Counseling promotes the national agenda for financially responsible behavior. Find a bevy of consumer tools here.

Pepsi is giving away $1,300,000 each month to fund great ideas. Learn what one young Ohio girl is doing.

Tip of the Week

The flu season is upon us. Proper washing of your hands is the best prevention. It should take at least 20 seconds, long enough to sing "Happy Birthday" twice. Lather up with soap and warm water. Wash vigorously, making sure you get your palms, between fingers and the backs of your hands. Be sure you get under your rings, they harbor germs like crazy. Don't miss under your nails where germs especially like to hide out.

Always wash your hands before you eat, when you are preparing food and after you go to the bathroom. But an antibacterial soap will kill good bacteria as well as bad, making you more susceptible to infection.

Quotable

"The right to be heard does not automatically include the right to be taken seriously." - Hubert H. Humphrey

Today in History

1947 - President Harry Truman delivered the first address to be televised from the White House.

Flash Fact

In the first televised White House address, President Truman asked the American people to stop eating meat on Tuesdays and poultry on Thursdays to help relieve starvation in Europe.

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