ID thieves discovering defenseless target - the dead

Wisdom advises to be in heaven before the devil knows you're dead, but in today's world that's no place to hide from identity thieves.

The identities of nearly 2.5 million deceased Americans are used improperly each year, according to a study released Monday by ID Analytics.

Of those, the identities of 800,000 deceased Americans are intentionally targeted for misuse, such as to apply for credit or acquire cell phone service. The study found that more than 2,000 identities of dead Americans are used each day in a fraudulent way, mainly to apply for financial services.

The numbers also include inadvertent misuse, such as incorrectly entering a social security number or just making one up. Those mistakes show up on about 1.6 million applications for credit each year, according to the study.

In addition, several hundred thousand potential misuses of identities of gravely ill Americans occur each year.

"This is not a victimless crime," says Stephen Coggeshall, chief technology officer for ID Analytics. "There are victims directly and indirectly; alive and dead.  The survivors are left with a horrible problem. They are not only faced with the loss of a loved one but they have to clean-up these financial matters."

The study focused on applications filed through the mail, in-person and over the Internet.

"Most of the fraud occurs remotely - through the mail or over the Internet," said Coggeshall. "But people need to be cautious in all these channels."

The study compared the Social Security Administration's Death Master File (DMF) to names, dates of birth, and social security numbers on 100 million applications for credit cards, cell phones, retail and other financial services that were filtered through ID Analytics' ID Network during the first three months of 2011. The survey identified which applications used personally identifiable information (PII) associated with deceased individuals.

The DMF is a public document available under the Freedom of Information Act. Monthly and weekly updates are sold by the National Technical Information Service (NTIS) of the U.S. Department of Commerce for upwards of $14,500. The DMF is used by financial and credit firms and government agencies to match records and prevent identity fraud. The DMF contains the name, birthday and social security number of more than 85 million deceased Americans and is created from social security payment records.

Global Internet Management, in a joint venture with NTIS, offers iPhone and Android apps that provide the entire DMF list.

The ID Analytics survey projects that the entire annual U.S. volume of applications submitted for credit products and services contains nearly 6.8 million applications that at least have a partial match to the DMF. The survey concludes that roughly 2.4 million are simple typos of social security numbers.

Coggeshall says consumers might be wise to use ID protection services or monitors, both during life and for the dearly departed, as a means of protection.

The survey follows a November report by United Press Internationalthat Identity thieves were using the social security numbers of deceased children across the United States to collect dependent-children tax refunds from the Internal Revenue Service.