Studies show that incidents of identity theft in the digital age continue to rise, and it's a problem that plagues the deceased as well as the living. When people die, their identities easily can be exploited by impostors seeking financial gain or a new persona. However, advance planning and quick action after a person's death can help thwart the misuse of identities of the deceased.
Thieves are plundering the good names - and homes, cars, credit and cash - of those who should be resting in peace.
The problem of identity theft persists, and the deceased are among the most vulnerable targets. That's why experts encourage families to have a plan in place and take precautions to prevent identities of departed loved ones from being stolen.
One of the most insidious forms of the crime is known as “ghosting” in which criminals steal identities of the deceased. It's a growing problem, especially with easy online access to government agencies, financial institutions and troves of personal information.
Media reports detail a wide array of schemes, motives and victims involving so-called ghosting. Consider a few examples that made headlines of thieves who eventually were caught:
- A Chicago man used the names and Social Security numbers of dead people to file 645 fraudulent federal tax returns. He received nearly $20 million in refunds.
- A New Jersey accountant misappropriated the credentials of a deceased tax preparer and filed hundreds of bogus federal tax returns. He received nearly $400,000 in refunds using stolen identities of living taxpayers.
- A Cincinnati man was convicted of stealing the identities of at least five deceased children and then using their information to file fraudulent tax returns. He netted more than $40,000 in bogus refunds.
- An Army staff sergeant from New York state was killed by a roadside bomb in 2009, but memberships to online dating sites in his name were active long after his death when a thief stole the Green Beret's identity in a scheme to lure women.
- An Indiana man left his family and then assumed the identity of a deceased Florida man to obtain a driver's license and a pilot's license, buy property and remarry, all in the name of the victim. The man even had a child who inherited the stolen surname.
- For nearly 30 years, a Wisconsin man lived under the identity of a boy who died of muscular dystrophy at age 12 in 1957. The man was issued a Social Security card in the boy's name and subsequently obtained a driver's license, credit cards, bank accounts and eventually government benefits.
- A Colorado woman, 67, stole the identity of a 2-year-old Texas girl who died in an accident in 1960. She used the child's identity for 28 years. She used a bogus birth certificate to obtain a Social Security card, open bank accounts and created businesses in the name of her deceased victim.
How bad is the ID theft problem?
The Federal Trade Commission reports that consumers lost $905 million in 2017 due to fraud with a median loss amount of $429. Credit card fraud was the most common type, and about 30% of consumers annually register complaints about fraud. The other most common types were employment or tax fraud; phone or utilities fraud; bank fraud; loan or lease fraud; and government documents or benefits fraud.
Meanwhile, the FTC's top complaint in 2017 involved impostor scams in which the swindler poses as a person known and trusted by the victim. The FTC also found that those in the 60-69 age bracket - baby boomers - were the most common victims of fraud.
Data breaches are another major vulnerability that exposes the identities of both the living and the dead. An Identity Theft Resource Center study found that 14.2 million credit card accounts were exposed because of data breaches in 2017, which was a whopping increase of 88% over the previous year. Nearly 158 million Social Security numbers were exposed in 2017, the center said, eight times more than in 2016. The study, which surveyed victims, reported that 26% of them had to borrow money from family members or friends as a result of identity theft - and 7% had to take out a payday loan to deal with the situation.
We are grieving. Why the urgency?
When a person dies, it can take several months for the Social Security Administration and financial institutions to learn through legal and official notifications that an account holder has died. In the meantime, thieves exploit that window of time to pillage identities. Thieves also exploit lengthy passages of time to assume the identities of children and adults who died years ago, sometimes several decades.
“When a person is deceased, the Social Security Administration will eventually contact the credit bureaus and share that information. … Thieves won't hesitate to take advantage of the grief family members might be going through, so the sooner you can alert the credit bureaus, the lower the risk,” Neal O'Farrell, executive director of the Identity Theft Council, told Time.com.
For the living, identity theft can be a nightmare, but they at least can take action on their own behalf. The burden to battle identity theft involving a deceased loved one usually weighs on surviving family members. They'll have to deal with the stress and potential hassles - such as calls from debt collectors trying to track down the deceased victim - in addition to their sadness and grief.
“Just when the family is dealing with their loss, before they have even touched the probate issue, they now have to take additional steps to protect their loved ones,” writes Connecticut-based author and personal financial coach Jill Russo Foster. “How does it happen? We give our loved ones' identities to the world on a silver platter.”
A comprehensive estate plan should include a list of all bank and credit card accounts that are to be managed by a person's personal representative, power of attorney or successor trustee. The list will come in handy in protecting the identity of a deceased family member.
“Having an effective plan and to-do list in place could make this difficult time more emotionally manageable,” writes Texas Tech law professor Gerry W. Beyer. “Also, having a deceased loved one's identity stolen can be a painful reminder of their absence, and a great violation to their memory, so taking steps to prevent it is important.”
To prevent the theft of a departed loved one's identity, experts suggest that survivors:
- Immediately notify the Social Security Administration - The executor of the estate will need to provide a copy of the death certificate and a letter of testamentary. A death initially can be reported by calling the SSA at 800-772-1213.
- Be discreet with obituaries - One main source of information used for nefarious conduct is the traditional obituary. Obituaries, laden with biographical details, are published in newspapers and on websites and are an easily accessible resource for those with ill intentions. Exact birth dates, middle and maiden names and places of employment are among the most valuable bits of specific personal information. Also, when addresses are published, it can be an invitation for a burglary during funeral services.
- Notify existing creditors - A decedent's representative needs to provide the account holder's banks, credit card companies, insurance issuers, brokerages and related creditors and institutions with a copy of the death certificate and request accounts be marked “Closed: Account Holder Deceased.”
- Advise the DMV - Identity thieves often seek to have driver's licenses issued in the names of the deceased, so the local Department of Motor Vehicles also needs notification and proof of death.
- Contact the credit reporting agencies - To thwart new accounts being created or credit issued in the name of a deceased person, the three major agencies - Experian, TransUnion and Equifax - also must be mailed a copy of the death certificate so the person's credit can be frozen. When a deceased alert is placed on the credit report, new credit cannot be issued.
- Prevent tax fraud - Notifying the Internal Revenue Service of a taxpayer's passing can help frustrate the filing of a bogus tax return.
- Deny digital access - Social media and email accounts of the deceased should be closed or memorialized to prevent unauthorized access by impostors. Information and instructions about digital assets should be included as part of a comprehensive estate plan.