Social security fraud is one of the worse forms of identity theft, primarily because it involves a person’s most important and valuable personal asset. The damage and the consequences associated with social security theft can completely ruin a person’s financial and social record. When a social security number is fraudulently used to collect social services, apply for employment and get federal or state medical benefits, the problems created for the victim are often difficult to correct and reverse.

What the ways that your social security number can be used?

Apply for employment - Often when individuals with criminal backgrounds find themselves looking for a second chance, which they’re not likely to get from employers who run background investigations, they may resort to stealing social security numbers or buying them from whoever offers this information for a fee. One of the most serious consequence of this is the recording of income under another person’s social security number. The IRS will normally contact the victim demanding back tax payments, late fees and penalties for failure to properly report income.

Social security fraud is often committed by illegal aliens who enter the country in search of any kind of employment. They may obtain social security numbers from criminal identity theft rings who specialize in selling this information. Ex-convicts are also among the biggest offenders in social security theft.

Social security benefits – The benefits that a person is due when they retire and are eligible for social security, runs more risks of running dry with the increase of social security theft. A person’s social security number can be used to take advantage of drawing social security payments, which can effect the victims future and welfare. In many cases the scams are run by people in the US to help family members overseas. In other words people in other countries collect social security benefits on your behalf.

Medical care - a social security number can also be used to apply for medical benefits either with a private insurance company or under federal or state benefits like Medicaid and Medicare. These are substantially dangerous cases, since besides the financial liabilities of caused by this type of social security fraud, the victim’s life can also be endangered if their own medical records are altered with someone else’s information. This is potentially the deadliest form of identity theft. For more information on the risks and consequences of this type of identity theft, see our articles on medical identity theft.

Business and credit accounts – The most common form of identity theft is having your existing credit accounts hijacked or ending up with new credit account in your credit file, for which an identity theft needs to have your social security number. However, one aspect of social security theft that maybe overlooked, is the potential for someone to actually begin a business venture with the use of someone else’s social security number. Obviously the risks here are very high, since the financial liabilities of a business failure could end up turning the victim’s life upside down overnight.

Reporting social security fraud.

If you know or suspect that you have been the victim of social security identity theft, here are the steps you need to take to begin resolving the issue and put a stop to any further damage.

Call the social security fraud hotline and provide as much information about your case as you can, about the incident of theft on your information. If the fraud incident includes more than the use of your social security number, and credit accounts, or utility accounts have been opened as well, follow the directions on our identity theft victim resources page.

To begin reporting your case to the social security administration (SSA) you need to print and fill out the Fraud Reporting Form and mail it to:

Social Security Fraud Hotline

P.O. Box 17768

Baltimore, Maryland 21235

Fax: 410-5970118

Phone: 1-800-269-0271 (TTY: 1-866-501-2101)

One other thing you need to be aware of when it comes to your social security number is the physhing scams where people contact you posing as representatives from the SSA. These scams almost always have the same premise, in which you’re either told that your information maybe in danger for whatever reason and that you must verify your social security number and date of birth in order to begin an investigation.

The same identity theft prevention approach applies here as it does for credit cards and bank account, no government organization ever contacts citizens asking them for their entire social security number. Typically when you call them directly there are some verification steps like last four digits of your social or street number. But receiving a call that specifically asks for this information should make you want to hang up and call the organization directly to find out if what they claim is true.

The Social Security Administration has always implemented security steps to protect the confidential information of all citizens and backed by federal law these security measures have been made a requirement for all institutions that handle this information to follow in order to avoid social security theft. However, many of these institutions and organizations are not always successful in implementing the same measures to protect consumers. A stolen social security number can be worth a lot to an identity thief, since this information can open up a world of possibilities for an easy payday.

How do identity thieves steal social security numbers?

Much like they would a credit card or any other piece of information form unsuspecting victims. The truth about social security theft is in fact that we as owners of this information do not do enough to protect it. A social security number is not the same as a credit card number, credit card fraud is relatively easier to deal with and fix than social security number theft, the damage that can be done here is much greater.

A thief might simply steal a wallet or purse and get to work right away to make sure your information can produce immediate financial gains. This is most common if you carry your social security card in your wallet, which you should never do.

More experienced thieves can get your personal information when you provide it to an unsecured website. You should never put your social security number into any website unless you’re absolutely and positively certain that it is a safe place. Social security identity theft cases have increased due to the ease and availability of the internet to do business and exchange information.

Thieves can also get the information they need by rummaging through trash, again this is a method knows as “dumpster diving” and when paperwork you throw away is not properly shredded or destroyed it makes it a lot easier for a thief to find what they’re looking for.

The real threat behind a stolen social security number

Identity thieves know that once in possession of a social security number their chances for high gains increase significantly, especially if the victim’s credit record is in good standing. A lot can be done with this information.

Several types of accounts can be started with your social security number, such as credit card accounts, utility services, personal loans, auto loans and even mortgages. However these may seem like petty crimes compared to the damage that can be caused if the thief uses the stolen social security number for employment or to obtain medical services through Medicaid or Medicare or other means of medical benefit rendering service for which a social security number needs to be provided.

Medical identity theft is among the most dangerous forms of identity theft since it almost always permanently changes a person’s medical record and in some cases can endanger a person’s well being if the victim is give the wrong diagnosis due to the wrong medical history.

Another serious complication of social security identity theft, is that of being penalized by the IRS for not properly reporting your income. This happens when someone uses your social security number to get employment. This is often the case with undocumented workers who buy this information from where ever it is available to get employment. The IRS is not in the business of resolving identity theft issues for anyone, so if their records show that you owe back taxes, penalties will immediately apply and they will proceed with collecting until “you” can prove that the additional income was not produced by you.

If your social security number is stolen it can also end up for sale at one of the many online identity black markets, where thousands of social security numbers, credit card numbers and other information are often traded.

How to protect this social security number

Social security theft is on the rise, one of the downsides of technology is that while it makes life easier for many of us, it also creates opportunities for identity thieves to exploit vulnerabilities of online media. It seems that it is now easier than ever to farm this information online. The best solution to this ever growing threat is to take identity theft prevention steps in a consistent manner. Consumers are encouraged to be as proactive as possible with the protection of their social security numbers. It is in fact your most precious asset in the information age.

Identity protection is an extensive topic, and a person’s identity does not end with their social security number, though it is essentially the core of a person’s identity and most any identity theft protection service available today focuses heavily on monitoring this important piece of information for their subscribers. The most effective way to avoid social security theft and stop identity theft is to outsource the task to professional identity protection services, which are relatively inexpensive and provide a rather large number of security features.

Your social security statement should provide a great level of detail about what’s going on with your number’s activities, pay close attention to this piece of mail, start following the information closely.