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Social Security helps provide financial security to certain groups of Americans. Unfortunately, some criminals see this money as an opportunity. Every quarter, thousands of Americans report Social Security scams and fraud to the government.
Considering how many people receive Social Security payments—70 million people as of 2021—it's not uncommon to encounter a scam. And if you're a victim, you might experience anything from minor headaches to major logistical issues and lost money.
Social Security fraud typically occurs when an unauthorized third party gains access to your Social Security number and exploits it for their own financial benefit. However, it's also considered Social Security fraud if a recipient receives benefits based on false or omitted information on government paperwork.
Types of Social Security Fraud
Your Social Security number is often legitimately required when applying for jobs or financial accounts, when filing taxes or getting medical care. But scammers often seek them out to commit identity theft and financial fraud. On the other hand, if you intentionally enter incorrect information when applying for Social Security benefits, you can be committing fraud.
Here are some of the common types of Social Security fraud to be aware of.
Representative Payee Fraud
Sometimes the Social Security Administration (SSA) will appoint a representative payee to accept Social Security payments for an individual who is incapacitated or otherwise unable to manage their own financial affairs. It's fraud if the representative payee steals or mismanages the funds.
Social Security Impersonation Fraud
This is when a scammer pretends to be an employee of the SSA or other government agency and contacts unsuspecting victims. They may aim to obtain a Social Security number and other personal information that can be used for identity theft, or they might threaten or demand payment.
Purchase or Sale of Social Security Data
This happens when criminals buy and sell Social Security cards or information on the black market or dark web.
Social Security Number Misuse
If someone gets ahold of your Social Security number and other personal data, they may be able to fraudulently apply for benefits using your information. But they might also use it to apply for unauthorized work, other government benefits or loans and other financial accounts.
Social Security benefits fraud occurs when an individual applies for Social Security benefits and intentionally provides bogus application information to receive money they're not eligible for. This also includes those who collect benefits in a family member's name using inaccurate or omitted information.
Concealing Personal Information
It's fraud to conceal or shield personal data or information that could impact Social Security benefits. For example, accepting Social Security income for a child not under one's care and supervision, or concealing work activity while receiving disability benefits. Another would be concealing a marriage or financial assets from the federal government while accepting means-based Supplemental Security Income (SSI) benefits.
Illegitimate Deceased Benefits Fraud
When someone dies, their Social Security payments end. If a family member fails to notify the Social Security Administration of the death and continues to accept the deceased's benefits, this is fraud.
Social Security Administration managers and employees who use their access to receive payments or benefits, or who help someone else do so, are also committing Social Security fraud.
How to Know if Someone Is Using Your Social Security Number Fraudulently
Depending on the type of fraud being committed, you may notice signs that something is amiss. If you experience any of the below, it's possible someone is using your Social Security number fraudulently.
- Your credit report has accounts or applications that you don't recognize.
- You have issues claiming government benefits you know you're entitled to (especially if you're told it's because your number is already being used to claim them).
- Your tax return can't be filed because someone has already filed using your Social Security number.
- Your Social Security earnings statements are inaccurate.
- Your Social Security number turns up in a dark web scan.
- Your address on your accounts were changed by someone else.
- You get mail, particularly statements or past-due notices, for accounts you didn't open—or calls from debt collectors for accounts not belonging to you.
- You get rejected for loan or credit card applications you think your credit should qualify you for.
- You receive notifications from the IRS or the SSA that you don't recognize.
How to Report Social Security Fraud
If you believe you've encountered or become a victim of Social Security fraud, the Office of the Inspector General urges you to report it so they can investigate and collect fraud data. You can report fraud by calling the hotline or online. If you were a victim of cybercrime, you can also file a complaint with the FBI's Internet Crime Complaint Center.
If you suspect fraud, you have the right to put a fraud alert or security freeze on your credit reports with each of the three major credit bureaus (Experian, TransUnion and Equifax). A fraud alert instructs creditors to verify your identity before processing new credit applications in your name. Another option is a security freeze, which limits access to your report, even when you request it be checked.
Should you have a Social Security account, you can block electronic access to it through the SSA. Also, if any of your existing bank or credit accounts were compromised, contact your financial institutions to let them know. If you lost money as a result of the fraud, you may also want to file a report with your local law enforcement.
How to Protect Yourself From Social Security Fraud
Criminals can be creative and convincing, but there are measures you can take to protect yourself and reduce your chances of becoming a Social Security fraud victim:
- Don't carry your Social Security card in your wallet. Unless you need it for a specific purpose, keep it at home in a safe or in a safe deposit box at your bank.
- Regularly check your financial accounts and credit reports for any suspicious transactions or accounts.
- If you get an unexpected call from someone who claims to work for Social Security, know what real employees will never do. For example, the SSA says their employees will never threaten, ask for credit or debit card numbers or demand a payment. They also will not call about issues with your Social Security account or benefits; you'll receive a letter in the mail.
- Be on the lookout for emails, texts or calls that pose as government agencies or financial institutions and ask for your Social Security number or other personal data. Don't click on links from unrecognized senders, and never give personal information or payment when you're contacted out of the blue. When in doubt, stop and look up that organization's number online, then call them directly to verify if they contacted you.
- Know that legitimate government agencies or banks will not contact you via social media.
- Familiarize yourself with common financial scam red flags. This includes pressure to act immediately, payment requests over the phone, demands of secrecy and threats of legal action or account seizure. Scammers often ask for payment methods that are hard to track or reverse, such as gift cards, wire transfers, prepaid debit cards or cryptocurrency.
- Be more skeptical than ever, as technology has made scammers savvier. They can now "spoof" or mask their phone number to look like it's coming from a legitimate government agency or your bank. It's better to decline calls you're not expecting and proactively call the number back, since the number will ring to the real phone line. Some scammers also will use the names of real SSA employees or send official-looking documents, so again, be skeptical.
- Create an online Social Security account to more easily track your records and identify suspicious activity.
- Shred papers you no longer need that contain personal information, especially if they have your Social Security number.
- Review the SSA's scam alerts about the latest tactics criminals are using to commit fraud.
- Add blocks to your Social Security account. You can add an eServices block, which prevents anyone, even you, from seeing or changing your information online. You can also set up a direct deposit fraud prevention block that keeps anyone from enrolling your Social Security account in direct deposit, or from changing direct deposit details or addresses. Both can be removed later.
If you experienced a scam and did provide financial or personal information, or you sent money, the Federal Trade Commission has a hub for advice on what to do next.
More Prevention Measures for Peace of Mind
While victims of fraud can undo much of the damage, it can be a long, overwhelming, distressing process, especially if you've lost money. Signing up for free credit monitoring can help you keep tabs on new accounts opened up in your name, allowing you to act quickly if you see something suspicious.