The end of October means that Halloween has come and gone, and it also marks the closing of “National Cybersecurity Awareness” Month. But there are still a few scary financial frights you should be aware of and try to avoid at all costs.
Here some lesser-known types of identity theft that might keep you up at night.
File your taxes ASAP
Tax identity theft is a rapidly growing problem, and state and federal revenue authorities are accelerating efforts to combat the crime.
The U.S. Treasury Inspector General for Tax Administration says that there were about 2.9 million incidents of tax-related identity theft reported in 2013, a 60% increase over the number reported during the previous year.
Typically, the fraudsters obtain the Social Security number of an individual, and then file a bogus tax return. The figures used in the fake tax return generate a sizable refund, which is then quickly wired to the scammer’s bank account. The account is then liquidated immediately, and the thief absconds with a refund that he didn’t deserve.
Usually the crime is only noticed when the actual taxpayer files his legitimate tax return, only to get a notice from the state or federal tax authorities that they already have his return, and have issued him a refund.
According to the IRS, it took an average of 278 days to resolve a tax identity theft case in 2013.
To protect yourself, start by guarding the information most-needed by tax identity thieves: your Social Security number.
Don’t give it out unless it’s absolutely necessary, and shred any documents that contain the number, and that you don’t need any more.
Then try to file your tax returns as soon after January 1st as you can. This will give the scammers less time to file a fake return, using your name and information.
If you become a victim of tax identity theft, notify the IRS immediately. Then complete Form 14309 (“Identity Theft Affidavit”) and mail it to the IRS.
Monitor you medical coverage
An even more insidious form of identity theft occurs when someone uses your name, Social Security number, and/or health insurance to receive medical care.
The crime can obviously affect your health insurance coverage. But if the provider doesn’t quickly acknowledge the mistake, and takes you to court over unpaid bills, it could drastically affect your credit rating.
The Medical Identity Fraud Alliance estimates that 2.3 million Americans were victims of medical identity theft in 2014, a 21% increase over the number affected in 2013.
The Ponemon Institute says that victims of medical identity theft spend on average 200 hours trying to rectify the situation, and $13,500 of their own money paying the bills and other expenses resulting from the crime.
Unlike most forms of financial identity theft, there is no “cap” on your liability for care that was provided fraudulently to someone else, but using your information.
You can help avoid this fate by checking with your health care providers to see what identity verification policies they use, and encourage them to use the strongest standards possible (or you can switch to a provider who does).
Ask to view your medical file, checking to see that you have actually been the recipient of all of the care they have provided in your name.
Review every medical-related bill and notice you receive, and match it to services, procedures and medications you (and your family members) have received.
Guard your Social Security, insurance policy, and other numbers related to your healthcare, offering them only when asked by a trusted party, and only when absolutely necessary.
If your Medicare or insurance card is lost or stolen, notify the sponsoring organization immediately and request a new number along with the new replacement card.
If you find out that you are a victim of medical identity theft, contact your healthcare providers, insurance companies, credit bureaus, and law enforcement agencies immediately.