Identity Theft & Your Social Security Number

Identity theft is very real; it is a serious crime with potentially devastating consequences.  Your Social Security number is the master key which thieves use to unlock and abuse your personal identity and livelihood. Save a few rare exceptions, you can never change your Social Security number; it will be with you for the rest of your life.

What can happen if your Social Security number is stolen?

  • Fraudulent Tax Returns: A thief can use your Social Security number to file a fraudulent tax return in your name and steal your refund.  You’re stuck proving the fraud to the IRS and judging from the horror stories told by previous victims, this is no walk in the park.
  • Fraudulent Financial Activity: Credit cards, car loans, utility accounts, and other financial instruments which constitute a liability can be created and abused in your name.  You get the bill and the detrimental activity shows up on your credit report.
  • Criminal Activity:  Someone commits a crime and gives law enforcement your Social Security number when they’re caught.  You could now be associated with anything from a traffic ticket to grand theft auto.
  • Fraudulent Healthcare Activity: A thief receives medical care using your identity and Social Security number, utilizes your health insurance benefits, and in the process compromises the integrity of your medical records.  You get the bill in the mail.
  • Benefits Fraud: Unemployment, Social Security, welfare or other benefits payments in your name have been initiated or hijacked by someone who got a hold of your Social Security number.
  • Other Identity Abuses:  Your Social Security number is used by an illegal alien to apply for and/or obtain employment in this country, or obtain official forms of identification such as a driver’s license or passport.

What can I do if this happens to me?

Let’s look at the measures you need to take to limit the extent of damage from the identity theft and restore your good name.

  • Contact one of the three credit bureaus to place a fraud alert on your credit report (initially lasts for 90 days and can be renewed).  The credit bureau you reach out to will inform the other two about the alert.  When this alert is active, any institution attempting to extend you credit or lend you money must verify your identity first.
  • Obtain credit reports from all three bureaus; your fraud alert entitles you to these for free.  Research and identify any fraud found in these reports.
  • Depending on the severity of the situation, initiate a credit freeze in your file blocking anyone but you from reviewing your credit report. This will make it even less likely that an identity thief can open accounts tied to your identity.
  • Submit a complaint to the FTC to generate an Identity Theft Affidavit and file a police report.  Both of these documents attached together form an Identity Theft Report, a key piece of documentation you will need to begin restoring your identity.  With the Identity Theft Report in hand, you can remove fraudulent information from your credit report, stop collection agencies from going after you, extend your fraud alert, and obtain critical information regarding fraudulent activity in new accounts opened or existing accounts abused by the thief.
  • Consider signing up for an identity theft protection service.  While it may be a good idea to do this if you’re not a victim, it’s definitely a great idea if you are one.  Depending on the company and service plan you choose, this will help you monitor ongoing identity activity efficiently and most likely provide you advance notice of any fraud being perpetrated in your name so you can get out ahead of it more quickly.  Some companies provide the ability to search black market websites to see if your personal information is being traded as well as criminal and court records, sex offender registries and even medical insurance records for fraudulent activity.
  • If a fraudulent tax return was filed in your name, go to this official IRS link and follow their guide:  Taxpayer Guide to Identity Theft. Once the IRS determines your eligibility, they can provide you with an Identity Protection PIN on an annual basis for you to use in addition to your Social Security number when filing your taxes, creating a second layer of security.
  • Verify and monitor your Social Security earnings record by creating an official my Social Security account online.  Any discrepancies may indicate someone else is using your Social Security number to work and earn an income, among other things.

What can you do to prevent your Social Security number from being stolen?

  • Don’t ever carry your Social Security card or other documentation with your Social Security number on your person (in a wallet, purse, etc.).  Keep it in a secure location such as a house safe or a bank’s safety deposit box.
  • Don’t give out your Social Security number to anyone who does not absolutely need it.  Financial institutions, employers, and various government agencies are among those who will probably require it. Anyone else really doesn’t need it, no matter what they say.  Doctors, dentists, utility companies, schools, airlines, and cellular, cable, and internet service providers among others will request your Social Security number but do not actually require it; however you may have to fork over a security deposit or another form of collateral if they are unable to use your Social Security number to investigate your creditworthiness.
  • Keep your incoming mail and trash secure.  Limit incoming mail with your personal information such as bank or credit card statements; you can do this by going paperless, a service most financial institutions offer.  Properly shred any sensitive papers such as paystubs and tax documents that may contain your Social Security number before you dispose of them.  Use secure deletion on computers and smartphones that may have stored sensitive personal data including your Social Security number before you trade in, sell, or otherwise dispose of them.
  • Don’t fall for “phishing” scams, either online, by phone, or in person.  Always thoroughly verify the identity of anyone who requests your Social Security number and use secure encrypted communication practices when transmitting your Social Security number online.

Sometimes there is nothing you can do to prevent your Social Security number from being stolen – it is compromised by someone else who had a right to it.  According to an announcement from the Office of Personnel Management in July of this year, 22.1 million Social Security numbers including those of millions of current and former federal employees and contractors were stolen from government databases in two separate incidents of cyber-security breach.  In a separate incident also occurring earlier this year, it is estimated that hackers stole unknown millions of Social Security numbers (along with other identity information) from Anthem health insurance company by breaching a database storing personal information on 80 million people.

While this all seems quite scary (as it should be), rest assured that being knowledgeable and vigilant about these issues will go a long way towards putting your mind at ease.  Until next time, stay safe!

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