Five individuals from three different states have been charged with committing more than two thousand individual acts of identity theft, securing $10 million in tax refunds before they were caught. Investigators in Pennsylvania, acting on information provided after bank employees noticed too many new applications coming in with matching identification, found suspects who’d been committing this type of fraud since 2005.

This particular case has ties to known Nigerian finance scams, and investigators believe that these five suspects are only a small part of a much larger operation. When tax fraud occurs in a case like these, an individual secures someone’s personally identifiable information and uses it to establish himself as that person. He may have an ID card made, as well as open bank accounts and credit cards under that identity but with his own address in its place. The bank account is used to deposit and then withdraw funds from the tax refunds, while the credit card is used to not only make purchases, but also establish more accessible credit reports.

Unfortunately, victims of tax refund fraud don’t usually find out about the crime until they try to file their tax returns, at which time the IRS informs them their returns have already been filed. In some cases, the refund has already been issued and cashed. This is why filing your return as early as possible is often a good idea, not only to beat the criminal to the punch but also to have plenty of time to work on a resolution if a return has been filed in your name.

More importantly are the proactive steps that can help keep you from becoming a victim in the first place. Guarding your Social Security number may seem like common sense, but it’s surprising how many entities—everyone from your child’s school to your dermatologist’s office—request your number as a way of creating an identification number in their computer systems. Using this number as an identification system is actually against government policy, and you are never required to give out your number to anyone other than for tax or financial purposes. Any time you hand over your number, you are opening yourself up to an identity theft incident, namely from employees in that business who steal the information or a hacker who accesses the computer system.

Once you know your Social Security number is secure and protected, also make sure that are maintaining good identity habits that will hopefully make you a difficult target, someone that thieves don’t want to bother with. Request your credit report from the three reporting agencies once a year and examine them carefully for questionable activity. Be sure to look over your Social Security report, too, to make sure that someone is not using your number to secure employment and avoid paying the taxes on it.

If you have reason to believe that your information has been compromised, it’s a good idea to alert the credit reporting agencies and have either a hold or a freeze put on your identity. This is designed to keep creditors from opening any new accounts on your identity without first verifying that it is actually you opening the account.

As identity thieves become more savvy in order to combat the new levels of awareness the public has about this crime, their tactics and techniques have had to become even more sophisticated. Stay one step ahead of their evolving crimes by protecting your identifiable information at all times. 

If you found this information helpful, you may want to consider taking part in the Identity Theft Resource Center's Anyone3 fundraising campaign.  For more information or to donate please visit http://www.idtheftcenter.org/anyone-3

 

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