Not even death can stop a determined thief. That is, the death of a targeted person. In fact, death is what the thieves are waiting for. It’s called “ghosting,” and it happens when a thief uses the identity of someone who has died to obtain credit and/or benefits and rack up bills. It is a growing problem, but not a new one.
Scammers have been doing this sort of thing since the 1920s. Part of the appeal for thieves is that generally, after people pass away, nobody thinks to monitor their credit. These days, about 2.5 million deceased Americans every year become victims of ghosting, according to the fraud prevention firm of ID Analytics.
How They Do It
Just when a family is knee-deep in grief, making and carrying out funeral plans and wrapping up the affairs of their loved ones, thieves are on full alert. They may comb obituaries for victims so they can strike quickly. They have learned, once a person dies, there is about a six month window of opportunity. This is how long it takes for the Social Security Administration, lenders, credit bureaus, and other organizations to share information that would reveal a scam.
Meanwhile, thieves patiently gather details, from obituaries such as the birth date and place, family names, including possibly the mother’s maiden name, and other identifying factors like military service, place of employment, maybe even the home address of the deceased. They may also get information from a hospital or funeral home. Once they have enough, believe it or not, they may be able to buy the deceased’s Social Security number on the Internet, for just a few dollars.
They then use the information to apply for credit cards and go on a shopping spree. If it is tax time, they may jump in very early in tax season to file for a refund in the deceased’s name. The IRS reported that in 2011 alone, $5.2 billion in such bogus refunds were given out.
Who Bears the Loss?
When theft through ghosting happens, the loss is to the lender, not the family unless a family member’s name is also on a credit account. But in the meantime, the reputation of the deceased can suffer greatly. And in the long run, we all pay for these crimes through rising prices.
Here’s how to guard against ghosting identity theft scams:
- The funeral director you deal with should be able to give you information about credit monitoring, so be sure to ask.
- Beware what details you reveal in an obituary. What seems like a loving tribute may be just what thieves were looking for.
- Provide death certificates, by certified mail, to each of the three credit bureaus, as well as to banks and brokerage firms where the deceased had accounts. Also to insurers, credit card issuers, lenders, mortgage companies, and the DMV.
- Call the Social Security Administration to inform them of the death.
- A few weeks after your loved one passes away, order copies of the deceased’s credit report and examine it for suspicious activity. If you find problems, contact the credit bureau right away.
Teresa Ambord is a former accountant and a former Enrolled Agent with the IRS. Now she writes for various publications, specializing in business- to- business and personal finance articles. She lives in rural far northern California, and is a fully owned and operated by her posse of small dogs.