Death and taxes go together – we know that.
But what about death and credit cards? Evidence is mounting that identity thieves are using personal information from the recently deceased to open new credit cards under the dead person’s name. It’s ghoulish, all right, but it’s also stoppable. Here’s how.
First the bad news. Identity fraud is the one market in this economic quagmire that is thriving. According to the 2009 Identity Fraud Survey Report, from Javelin Strategy & Research, the number of Americans who have been victimized by identity fraud has grown 22%, to 9.9 million adults. That amounts to $48 billion in 2009 alone, Javelin reports.
Another study, this one from Gartner, says that credit card fraud is the number one type of I.D. fraud in the U.S. – with Americans losing, on average, $929 per card theft. Worse, there’s only a 5% chance that the fraud artist will be caught, convicted and sent to jail, Gartner reports.
But by stealing credit card data from deceased people, scam artists have really hit a new low. Identity thieves accomplish this by uncovering the deceased cardholder’s Social Security number – which is easier to obtain than you might think – and using the number to pry his or her way into the deceased’s credit card account.
Part of the blame lies with victim’s families. Investigators say that, in way too many cases, families of the deceased wait too long to notify the appropriate authorities - like banks, the Internal Revenue Service, banks, credit card lenders and estate planning lawyers and financial advisors – that a family member passed away.
But the U.S. government doesn’t escape any blame. Seasoned identity theft criminals know how to access the Social Security Death Index – a thorough, easily-accessible database of deceased Americans that, amazingly enough, includes that person’s Social Security number, among other relevant personal financial data. All a scam artist has to do is scour the obituaries, pick a target, and access his or her Social Security records (which can also be ordered from the SSA if you have the deceased person’s name and birth date). It’s a short step from there to a new credit card in the deceased person’s name – and a big headache for that person’s family.
The good news is that identity theft perpetrator can be thwarted. To ensure that happens, take the following steps:
Get the word out. Once your family member is mourned and gone, set about notifying the proper authorities that the family member is officially deceased. That’s not difficult to do – you just need a copy of the deceased person’s death certificate – and then send it along to the appropriate bank, credit card firm, estate planning attorney and any creditors that might have an account open. It’s particularly vital to contact the three major credit bureaus – Experian (Stock Quote: EXPE), Equifax (Stock Quote: EFX) and Transunion – and have them note that your family member is recently deceased.
Switch to a trust. You can keep your family member’s personal financial data private by opting for a living trust. Such trusts are harder for I.D. thieves to crack, as the public is shielded from prying into trust information. But if your family member has a will, that information is open and accessible to the public.
Avoid the obit. This may seem harsh at first glance, but one of the surest ways to keep scam artists away from your deceased family member’s credit card account is to not announce the passing in the obituary section of your local newspaper. Plain and simple, a fraudster can’t act on information he or she doesn’t know about. Instead, send an e-mail alert out to loved ones or make phone calls to friend and family and ask them to pass the word along.
To be absolutely sure that your loved one’s credit card account is inactive and out of harm's way, check with the card issuer and ask for a letter confirming that your family member’s card status is closed down. Then, contact the three major credit agencies six months after the family member’s death to make sure there is no activity on the account.
It shouldn’t come to this, but a little diligence after a family member’s passing goes a long way in ensuring that no identity theft has occurred.
With grief and sadness already a burden, it’s better to be safe than sorrier.
—For a comprehensive credit report, visit the manybanking.com Credit Center.
—For more ways to save, spend, invest and borrow, visit MainStreet.com.