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Thursday, October 22, 2015

Beware of Digital Grave Digging: Guard Deceased Identities

Do you ever wonder how the deceased are able to receive social security checks,  vote or open new credit card accounts?  It's happening more and more.

According to the Internal Revenue Service, nearly 2.5 million deceased American's identity is stolen every year.   Although the deceased person isn't affected (of course) their survivors are.  Stolen identities can result in financial obligations that the surviving family is responsible for covering, or at a minimum, spending a lot of time and energy fighting.

So how are these identities stolen?

According to the ID Theft Center, Identity thieves obtain information about deceased individuals in
various ways.  They may watch the obituaries, steal death certificates, or even get the information from websites that offer the Social Security Death Index.  These web sites are supposed to be used for genealogy research but are sometimes used to steal identities.  It's not necessarily a stranger you have to worry about either. The ID Theft Center reports that as much as 30 percent of identity theft may be committed by a family member or friend! This scenario may be more likely if the deceased person suffered from lengthy illness, mental confusion, or if there is disagreement among family members prior to the death.

What can be done to ensure your deceased loved one's identity is not stolen?


Again, according to the ID Theft Center, here are the steps that should be taken upon the death of a loved one.

  • Obtain at least 12 copies of the official death certificate when it becomes available. In some cases you will be able to use a photocopy, but some businesses will request an original death certificate. Since many death records are public, a business may require more than just a death certificate as proof.
  • If there is a surviving spouse or other joint account holders, make sure to immediately notify relevant credit card companies, banks, stock brokers, loan/lien holders, and mortgage companies of the death.
  • The executor or surviving spouse will need to discuss all outstanding debts and how they will be dealt with. You will need to transfer the account to another person or close the account. If you close the account, ask them to list it as: “Closed. Account holder is deceased.”
  • Contact credit issuers, collection agencies, and any other financial institutions that need to know of the death using the required procedures for each one. The following are general tips:
    • Include the following information in all letters:
      • Name and SSN of deceased
      • Last known address
      • Last 5 years of addresses
      • Date of birth
      • Date of death
      • To speed up processing, include all requested documentation specific to that agency in the first letter
    • Send all mail certified, return receipt requested.
    • Keep copies of all correspondence, noting date sent and any response(s) you receive.
    • Request a copy of the decedent’s credit report – refer to ITRC Letter Form LF 117-1. A review of each report will let you know of any active credit accounts that still need to be closed, or any pending collection notices. Be sure to ask for all contact information on accounts currently open in the name of the deceased (credit granters, collection agencies, etc.) so that you can follow through with those entities.
    • Request that the report is flagged with the following alert: “Deceased. Do not issue credit. If an application is made for credit, notify the following person(s) immediately: (list the next surviving relative, executor/trustee of the estate and/or local law enforcement agency- noting the relationship).”
  • Other groups to notify:
    • Social Security Administration
    • Insurance companies – auto, health, life, etc.
    • Veteran’s Administration –  if the person was a former member of the military
    • Immigration Services –  if the decedent is not a U.S. citizen
    • Department of Motor Vehicles if the person had a driver’s license or state ID card. Also make sure that any vehicle registration papers are transferred to the new owners
    • Agencies that may be involved due to professional licenses – bar association, medical licenses, cosmetician, etc.
    • Any membership programs – video rental, public library, fitness club, etc.
In our "Put Your Credit On Ice" blog we recommended that unless you're actively seeking credit you should freeze your credit.  Refer to that blog for instructions on how to do that. That is one of the best ways to ensure that your identity is protected.

In a future blog we'll talk about steps to take if you suspect a deceased's loved one's identity has been stolen.

As you can see, there is a lot that needs to be done upon the death of a loved one to protect their identity and the surviving family members. If you want to ensure your loved ones are spared some of the burden of doing this for you upon death or incapacitation, ensure your important documents, records and credit accounts are organized and a trusted executor or loved one(s) knows where to find them when needed. 

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