Preventing Identity Theft After Death

Believe it or not, death is no barrier to identity theft. It can be very difficult to make practical decisions after a death in the family, and that is exactly the reason why identity thieves target the dead. CNN Money reported earlier this year that 2.4 million dead people have their identities stolen each year.

Thieves recognize that families are unlikely to be focused protecting their loved one’s identity after death, and so they take advantage of the period of grieving to open up credit cards, buy cell phones, and otherwise abuse the deceased’s good credit.

Here is what you need to know about the possibility of identity theft after death, and how to fight the thieves:

Why Steal From the Dead

It is relatively easy to take the identity of a deceased individual. In order to prevent Social Security fraud, the federal government publishes the names and Social Security numbers of deceased individuals in the Social Security Death Master File, which can be found on the Internet. Identity thieves can easily find the names and Social Security numbers of the recently deceased and use them to start applying for credit that the deceased cannot dispute.

In addition, thieves can use obituaries—which often list such personal information as the deceased’s mother’s maiden name, pets’ names, and the deceased’s address—to find victims. The thief loses nothing by attempting to open credit using the information that can be gleaned from an obituary.

In addition to the amount of information available about decedents, thieves also take advantage of the fact that it can take time to notify creditors, pay final bills, and file final taxes. Thieves can use that lag between a death and the clearing of up the estate to run up additional debt. Depending on the relationship of the will’s executor to the deceased, it could potentially be very difficult to determine which debts are legitimate and which are bogus.

Prevention

Unfortunately, preventing identity theft after death requires work on the part of the family at a time when no one feels like handling paperwork. However, the sooner you get to work on clearing up the paperwork, the more likely it is that your loved one’s identity will remain their own.

The first step is to get multiple original copies of the death certificate—at least a dozen. Banks will not close accounts without an original copy of the death certificate, so it pays to have enough in advance. There is a fee for these certificates, so expect to pay between $100 and $300 total for your multiple copies, depending on which state you live in.

You will then want to contact both Social Security and all three credit bureaus. The Social Security administration will notify the credit bureaus of the death, but it can take some time for the paperwork to work its way through the bureaucracy. Calling the credit bureaus yourself will place a death indicator on the deceased’s credit account immediately, so there will be no gap that an identity thief can take advantage of.

From there, you can start alerting individual creditors, banks, insurers, etc. This is another potentially hazardous time because all accounts are open until the bank or institution knows of the individual’s death.

The Bottom Line

No one wants to think about getting on the phone to close down accounts while grieving. But the best way to deter identity thieves after a death is to act quickly. This will protect your loved one’s estate and make sure their money goes where they intended, and not to finance some thief’s shopping spree.