Startling Facts About Identity Theft

When identity theft is not for profit but for getting a job: Internet ScamBusters #200

Internet ScamBusters™
The #1 Publication on Internet Fraud

By Audri and Jim Lanford
Copyright © Audri and Jim Lanford
All rights reserved.
Issue #200


Welcome to our 200th issue of Internet ScamBusters! It’s hard
to believe it’s almost 12 years since we started ScamBusters. ;-)

To celebrate, we have a special issue for you. We decided to
focus on the #1 Internet scam: Identity theft. We’ll
concentrate on a little known, but VERY widespread aspect of
identity theft: when identity theft is not for profit but for
getting a job. We call this article “Startling Facts About Identity Theft
— and we believe you’ll find what you discover surprising indeed.

First, though, we recommend you check out the most popular
articles from our other sites during the past week:

Using Low-Interest Credit Cards for all Your Christmas Needs

You’re Not Saving Money if You Don’t Need What You’re Buying

Looking for a Free Checking Account?

Do You Dread Giving Gifts?

On to today’s Special Issue…

Startling Facts About Identity Theft

Identity theft is perhaps the top fraud issue, but one aspect
of identity theft is very prevalent, yet is rarely discussed:
when Social Security numbers are stolen, not for profit, but
to get a job.

In order to get many jobs, illegal immigrants need Social
Security numbers (SSNs). Since they obviously can’t apply for
them from the Social Security Administration (SSA), they often
buy a stolen SSN and use it to get work.

For example, MSNBC reported that a legal resident in the
Chicago suburbs applied for a job at a local Target department
store and was not hired because someone who had used her SSN
already worked there.

That was bad enough, but further investigations uncovered that
her SSN had been used to obtain work by 37 other employees,
mostly illegal immigrants!

This is not unusual, according to ChoicePoint: the average
number of times a SSN is used for this type of immigrant-based
ID theft is 30 times.

Although no one knows the extent of the problem, here are some
identity theft facts according to an article by Eduardo Porter in the New
York Times last year:

  • About seven million illegal immigrants are currently using
    stolen SSNs and paying Social Security taxes.

  • Their payroll tax contributions could be as high as $7
    billion a year.

  • Their contribution to the Social Security system added about
    10% of last year’s surplus.

  • Illegal immigrants see Social Security withholding taxes as
    a cost of working in the US.

  • Each year, the Social Security Administration receives a
    very large number of W-2 forms with incorrect and sometimes
    fictitious SSNs; the withholding taxes from these incorrect
    SSNs are put in the “Earnings Suspense File,” which totals
    over $189 billion.

It is illegal for the SSA to notify victims that their SSNs
are being used by someone else. Naturally, neither the
illegal immigrant nor the rightful owner of the SSN gets the
benefits of the taxes withheld — so billions of dollars are
simply added to the general Social Security system each year.

Falsely using a stolen SSN is a felony in the US, and there is
no question that this is a widespread problem.

Here is an even less known fact: many of the people whose SSN
are stolen are children. Since many children don’t use their
SSN until they turn 18 to get a job, an illegal immigrant can
often use their SSN for years without getting caught.

Unfortunately, illegal immigrants also sometimes fail to make
credit payments, file for bankruptcy, and harm victims’ credit
in other ways. When the rightful SSN owners turn 18, they can
have credit history problems, which results in being unable to
get student loans, jobs or other kinds of credit.

However, even if there are no direct financial consequences to
the victim, this is nonetheless not a victimless crime. It
can take hundreds of hours to get everything straightened out
— and there is no guarantee that the SSN won’t be stolen and
used again.

Although we are writing about this as a US problem, we suspect
that it exists as well in many other countries where the
conditions are similar.

The issues surrounding illegal immigration are complex and
political, and certainly beyond the scope of this newsletter.
(In fact, we make a point of not expressing our political
views in this newsletter.)

Nonetheless, regardless of your views on immigration, it is
important for you to understand this type of identity theft
since it is a significant and growing problem.

Action: Unfortunately, at this point we know of no definitive
way to find out if your SSN is being sold and being used for
immigration identity theft.

However, the advice we’ve given in other issues of ScamBusters
on how to protect yourself from general identity theft is
perhaps even more important given the magnitude of this
problem. You can find these suggestions here:

Understanding and avoiding identity theft

Surprising Facts About Identity Theft

Avoiding ID Theft (Identity Theft) at Work

Time to close — we’re off to enjoy a walk. See you next week.