Smart money management is about more than earning, spending, saving and investing. It’s also about protecting your hard-earned cash from crimes and scams, including identity theft—even after you’re dead and buried. That’s right—even the dead are not safe from identity thieves.
Last year the identities of almost 2.5 million deceased American were used to fraudulently open credit card accounts, get cell phones, apply for loans—even to renew drivers licenses. It’s called ghosting, because it can take six months for credit bureaus, financial institutions and the Social Security Administration to receive, share or register death records. That’s plenty of time for thieves to rack up charges, especially since dead people can’t monitor their credit, and their often still-grieving survivors are not likely to either. Crooks even file tax returns in the names of the deceased, collecting more than $5 million in refunds in 2011 alone.
How does this happen? Crooks just need a few bits of information to get started: a name, birth date and an address, often from hospitals, nursing homes and funeral homes—even the obituary section of your local newspaper. This is enough to get an illegal purchase of a Social Security Card right from the Internet.
The good news is that surviving family members are not ultimately held responsible for the fraudulent charges. But that doesn’t mean you shouldn’t take steps to protect your deceased loved one’s identity from these modern-day grave robbers. Here’s what to do:
Keep personal information, such as birth date, maiden names (including that of the deceased’s mother), that could be used to help create a false identity out of obituaries, death notices and even funeral service programs.
Send copies of death certificates via certified mail with return receipts to each of the three credit reporting agencies, Equifax, Experian and TransUnion, with a request that they place a “deceased alert” on their credit reports. Also mail copies of the death certificates to any institution where the deceased had an account, including banks, auto finance companies, insurers, brokerages, mortgagers and credit card companies.
When closing individual accounts, have the institution list “Account Holder Deceased” as the reason. For joint accounts, remove the deceased person’s name.
Report the death to Social Security by calling 800-772-1213.
Contact the Department of Motor Vehicles to cancel the dead person’s driver’s license; this will prevent duplicates from being issued to crooks.
Go to AnnualCreditReport.com and order a credit report from one of the three major credit bureaus for the deceased, to check for suspicious activity. (Each of us, including the deceased, is entitled to a free report from each of the agencies every year.) Wait a few months, and order another report from a different bureau. Check into any new charges, credit inquiries and other signs of an active credit file.
For more tips on what to do to prevent and deal with the identity theft of the deceased, go to the ID Theft Center web site and search using the term “deceased.”