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Health Care Reform:

Health Insurance & Affordable Care Act

The Identity Theft You Haven't Heard of...Yet

Target: Your Insurance Card

For as little as $20, you can purchase a fake Social Security card. At ID mills around the country, buyers receive a reasonably authentic-looking card with their name and a nine-digit number. The seller generates the number on the card — but in most cases, by chance, that number already belongs to someone else. The person may be deceased or alive and unaware, age 4 or 84.

In Utah and Houston, where many cases of Social Security ID theft are in the courts, prosecutors say that a majority of imposters are illegal immigrants (such as Betty's father on the TV show Ugly Betty ). There are no national statistics.

"Some immigrants cross the border, go to an ID mill, and say, 'I need an SS card and this is the name I want on it,'" explains Houston Assistant District Attorney John Brewer. "They get jobs, start working, and eventually — when they realize they're not going to get caught — grow more comfortable with the number. Then they go the next step and sign up for a car loan or mortgage."

And they usually get away with the crime because there are surprisingly few checks to stop this kind of theft, say prosecutors: Employers aren't required by law to verify Social Security Numbers and some car salesmen and mortgage brokers are willing to overlook a fishy credit report in order to complete a sale.

Every year, the Social Security Administration (SSA) receives eight to nine million earnings reports where the name doesn't match the SSN. Sometimes it's a minor mix-up — there are women, for example, who get married and change their names, but never notify the SSA. In a growing number of cases, however, the problem is ID theft. And the perpetrators rarely get caught because wage reports (like medical files) are considered private. So when a mismatch occurs, instead of investigating, the SSA places the suspect documents in a "suspense file" and essentially walks away.

For example, the SSA never told one victim in Utah that her number had been stolen by an illegal immigrant named Araceli M. Lagunes. If Lagunes's victim had ordered a credit report, would she have discovered that an ID thief used her number to get a mortgage (and refinance it at least once)? Not necessarily. Because Lagunes was using her own name, not her victim's, Lagunes's credit history went into a subfile, completely separate from the victim's (though linked by their shared number). However, Lagunes's credit activity could be seen by any merchant or employer who ran a check on the card. Worse still, Lagunes's bill-paying habits, whatever they were, could have affected the rightful owner's credit score. (Lagunes has pleaded guilty.)

"This is a kettle that's about to boil over," says Utah Assistant Attorney General Richard Hamp. "The federal government won't lift the lid off." Hamp, one of the few attorneys general devoted to uncovering and publicizing this type of case, discovered that 132,000 SSNs were being used by more than one person in Utah alone in 2000.

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