Startling Facts About Identity Theft

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

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.