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July 01, 2013

Senior Identity Theft: A Problem in this Day and Age

Sarah Anderson

On May 7, 2013, the Federal Trade Commission hosted a forum entitled “Senior Identity Theft: A Problem in this Day and Age.” The FTC brought together experts from government, private industry, and public interest groups to discuss different types of senior identity theft, the challenges of victims of identity theft, and educating the public on senior identity theft.

Tax and Government Benefits ID Theft
For seniors, this type of identity theft occurs in one of three ways. Most commonly, a fraudster will scan obituaries to learn of recent deaths and request the master death file from the Social Security Administration. By obtaining the social security numbers and personal identifiable information (PII) of those who have recently died, fraudsters can file tax returns under those numbers and claim the refunds. The fraud is generally not discovered until family members of the deceased file a final tax return, only to discover that one has already been filed.    

Another way that fraudsters steal PII from seniors is through phishing scams via email or telemarketing schemes. Seniors have also had their identities stolen by using non-attorney/non-CPA tax preparers. Once fraudsters have a senior’s PII, they can make purchases using the senior’s credit or can redirect government benefits to their own accounts.

The following tips can help seniors protect themselves from tax and government benefits identity theft:

Medical ID Theft
With over 95% of health organizations reporting at least one significant breach of medical information in a recent study, this particular form of identity theft not only has economic effects but can also have serious medical repercussions as the fraudster’s health records become combined with the senior’s.

There are two main ways PII is obtained in medical identity theft. One way is a breach in the electronic records of a health organization. This is generally done by an organized group. More commonly, a single individual gains access to a senior’s Medicare card and photocopies it or snaps a picture with a cell phone. This individual could be a health-care worker, a physician, a person offering other medical services, or even a family member.

A Medicare number is an individual’s social security number followed by a letter. Once a fraudster has this number, not only can medical records be compromised but the number can also be used for other forms of identity theft. The theft is generally not discovered until a senior receives unsolicited medical equipment or discovers unauthorized charges on an Explanation of Benefits.

Once a senior’s medical identity has been stolen, the biggest concern is that medical records could have been compromised. If someone is billing unneeded services to a senior’s Medicare account, those services become part of the medical records and could delay proper medical treatment in the future. It can be difficult to have medical records corrected, because under HIPAA, an individual is only entitled to their own medical records. A physician may not feel comfortable releasing those medical records once he or she knows that the records have been compromised. This could be remedied by requesting the physician redact the information known to be fraudulent before releasing the records to the patient.

Along with the tips listed above, the following tips can further protect seniors from medical identity theft:

  • Carry a photocopy of your Medicare card with the numbers blacked out,
  • Keep a calendar of medical appointments that can be checked against service dates listed on your Explanation of Benefits,
  • Watch for unsolicited credit cards, bills for items you did not purchase, and services you did not order,
  • Keep a current copy of your medical records, and
  • Don’t take advantage of any free offers of transportation or meals that require disclosure of your Medicare card.

ID Theft in Long-Term Care Situations
Long-term care here includes nursing homes, assisted living, and in-home care. Seniors in this group are vulnerable because so many individuals have access to them and their personal papers.

Some red flags that signal identity theft include:

  • Missing papers, bills, or documents,
  • Unknown charges on credit cards or Explanation of Benefits,
  • Bank accounts that are short money to pay bills,
  • Seniors are isolated from family and friends,
  • Seniors become secretive,
  • Seniors have new acquaintances,
  • Unexpected changes to a power of attorney, beneficiary designation, or will.

Senior Education Outreach
The final discussion of the day was on how to educate seniors about financial and medical identity theft. It was pointed out that everyone has a tendency to believe that crime happens to other people. Therefore, it is important to make sure that the message fit the target audience. This can be done by using appropriate images that reflect the lifestyle of the target audience and using a catchy headline for an educational campaign that draws interest. ■

Sarah Anderson

About the Author: Sarah Anderson is a third-year law student at Thomas M. Cooley Law School in Auburn Hills, MI, and an intern with the Commission on Law and Aging.