Fraud worth billions

Must-read article about theft from stealing checks, tax returns, mail in mailboxes and trash and many others. The thieves are street gangs, hackers and organized crime. They are very sophisticated. Billions are being stolen.

Practical takeaways:

  1. Use indelible black gel pen ink to write checks. This type of ink cannot be washed away. Avoid regular blue ink or black ink pens. These contain dye-based ink that can easily be washed away.

  2. Do not put checks in a regular mailbox. Better to pay online. If you must mail a check drop it off at the post office.

  3. Never put banking information of any kind into your trash. Shred it.

  4. If possible, do not get a tax refund. Adjust your withholding and/ or estimated taxes so that you owe the IRS a little at tax time. The amount you owe needs to be less than $1,000 or the IRS will charge a penalty. (If you are paying estimated taxes your pre-payment can be the same as your full tax amount from the previous year but make sure that won’t result in a refund.) Fraudsters can steal a refund but the IRS won’t send a refund if YOU owe THEM money.

  5. Don’t carry a debit card. A debit card is like cash – it can be used to drain your bank account and there is no recourse for theft like a credit card.

  6. Every person is entitled to one free credit check per year from each of the credit reporting agencies. Do this to make sure that your credit reports are accurate and that nobody has opened credit lines in your name. Also, freeze your credit at each of the agencies to prevent new credit lines being added without your knowledge. If you need credit (e.g. a mortgage, new credit card, etc.) you can temporarily unfreeze your credit.

Thanks to @Notehound7 for this article. The article is very long and describes the thefts in detail. It doesn’t discuss ways to avoid theft.



Decades ago banks in Venezuela instructed clients not to use blue ink, only black ink to write checks. They didn’t give a reason and I thought it had something to do with copy machines not working well with blue ink. :crazy_face:

The Captain

@captainccs I think you were right about the copy machine problem. I don’t think gel pens even existed decades ago. And I think that modern copy machines and scanners don’t have a problem with blue ink.

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If possible, do not get a tax refund. Adjust your withholding and/ or estimated taxes so that you owe the IRS a little at tax time. The amount you owe needs to be less than $1,000 or the IRS will charge a penalty.

The IRS rule is that your withholding and payments of estimated taxes must exceed 90% of the total tax due on the final filing. In other words, if your final filing shows that your total tax bill is $40,000 dollars, your withholding and estimated payments have to exceed $36,000. If less than that, you technically owe a penalty for underpayment. You don’t have to come within a fixed $1000 amount of the final bill.

If you DO wind up underpaying, IIRC you can just send in the balance for taxes as calculated and the IRS will send you a separate bill for the penalty. I suspect given staffing issues, calculation and collection of these penalties is not automated and not a high priority unless the gap is substantial in dollar amount terms or indicates possible fraud.

Interestingly – maddeningly, for some – you actually own quarterly estimated taxes on interest payments as they accrue, not only when they are finally PAID to your account. If you have a 1 year CD that doesn’t PAY the interest until maturity, you still owe estimated taxes on the interest for each quarter until it actually matures.


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On the other hand, banks have informally agreed to treat debit cards much like credit cards. The actual cases of someone losing money via a debit card theft are vanishingly small.

I think this is more of an old wives’ tale than an actual concern. (No offense intended to all of you old wives out there!)

They don’t actually do that. But occasionally refund checks are stolen from mailboxes. So use direct deposit for your tax refunds.

Far more common is for a fraudster to simply use your Social Security Number to file a completely fake tax return. Nothing on it will be true save for your name and SSN. And while it’s a pain if this happens to you, you will not lose your refund. But it will be significantly delayed - as in several months and potentially up to a year.

So I do agree with the general principle of not getting a large refund. Any refund that is immaterial to your short term cash flow needs is fine.


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Not necessarily. If you use the annualized installment method, you only pay estimated taxes on income as you receive it. So you would not have to make payments on your CD interest until it is received.

However, you have to keep track of all of your taxable income and deductions on a “quarterly” basis, so it does require a fair amount of record keeping - something that is not easy for some folks to do.


“Quarterly” is in quotes because some “quarters” for this purpose have 2 months and some have 4 months.

Also if you did get a refund on the last return you did then you are given a reprieve of any fine, no matter how much you owe, on the current return.


That is just plain wrong.

Not sure what exception you might be thinking about, but none involve looking at the prior year refund.

–Peter <== tax professional


I don’t have a shredder.
I’m mostly paperless, and generate few papers that need to be “destroyed”.
I’ve found that tearing the paper/s into small-er pieces, then soaking in water, will destroy the paper. Then, simple massaging will further “destroy” most.
For resistant paper, sometimes dish soap will facilitate the destruction.

For the most important section of the paper, if I’m concerned, I will “rub, scratch, or otherwise abrade” that information.
Finger nails, fork, knife, spoon all work well.

I’ve found this process to be satisfactory.

I also have a chimenea, and have burned papers.



Your right Peter I must have misunderstood it. Here are some of the exemptions


Penalty for Underpayment of Estimated Tax

If you didn’t pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers, fishermen, and certain higher income taxpayers. Please refer to Publication 505, Tax Withholding and Estimated Tax, for additional information.

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I don’t either. Several nonprofit groups in my area rent a large shredder truck from time to time. Individuals bring in boxes of material to shred, then donate to the nonprofit.



You know, $40 or $50 at the office store will get you a shredder, which would be a whole lot easier that these manual destruction methods. :smiley:



As you mentioned, a match also does an admirable job very quickly.

I have a “trick” I use to dispose of credit cards. I cut them into three and then toss them into the trash … the key is to use different trash cans at different times. So one piece in the home trash on Monday, one piece in the gym trash, and the remaining piece on Thursday. That way nobody can piece them together to get the numbers on it.

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I used to do shredding by hand. It was a royal pain.

I splurged and spent about $55 for a cross-cut shredder from Amazon.

It can’t handle the number of sheets it claims it can handle, so I do 3 sheets at a time. Turns them into confetti. Still well worth the time (which is less than doing it by hand) and a whole lot easier on my hands.

It will shred single credit cards, too.

I highly recommend.

I suppose it’s still possible to put the confetti back into readable form, but I subscribe to the theory that you don’t have to be able to outrun a grizzly bear, you just have to outrun the folks you’re with.

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As a serial buyer of shredders (professional hazard - I’m a tax preparer and have to shred quite a bit of stuff), I can say pretty confidently that any shredder costing less than $200 can’t handle the number of sheets it claims. When shopping or using, plan on about half of what they claim as a practical limit.

–Peter <== who still prefers shredding to tearing and soaking and scratching with a fork

Micro-cut shredders from Amazon start at sub-$50. I got a Fellows micro-cut shredder years ago and it is still working fine. Every now and then I put run a lubrication sheet through it and that keeps things working with few problems. I am still using OfficeMax < G > brand sheets but am down to my last package. So, will need to get more–probably from Amazon.

I got my own shredder because it means papers and CDs/DVDs I don’t want to keep get shredded and thus out of my way (no need to accumulate and drag it to somewhere to have them destroyed). I have some deliveries that come in a largish plastic bag. I use that bag to line the shredder bin. When full, I close and toss the bag. It goes into the trash where it is then burned at a big facility downtown that heats/cools buildings there. When I open the mail, much of it goes straight into the shredder–quick and easy.

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Several years ago I bought a Royal 16 Microcut crosscut shredder, (Costco), after a couple Fellowes that ate themselves up, returned those for full refunds to Costco. This one has held up extremely well, likely comes close to its 16 sheet claim, but I don’t push it. It eats anything with my/our name/address or any other tidbits, including CDs, DVDs that have had data stored on them, Credit cards, insurance cards, and as it all goes into the local yard waste bin for mulch, I even shred a lot of cardboard boxes, and have for a long time now… So it’s really tough, has stayed sharp, no fumbles of bang, pops like the failed Fellowes did…

I see now it’s been Discontinued, no longer at Costco, so if this one breaks I’m outta luck… But, its been great!

Shredders are cheap at Staples. I shred c’mon offers even by JPM to get a credit card. If someone else fills out the offer that would be a problem.

I have Credit Karma. I keep up to date on how my scores are. If my insurance bills rise I ask them how much is a credit dip with usage or how much of the rise in the bill is inflation? I go from their to manage my bills.