The ID Theft You Haven't Heard of...Yet?

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

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They're not just going on shopping sprees anymore. Now thieves are using
your personal info (or your child's) to get a job, buy a house, and have
major surgery — which wrecks not just your bank account but also your
medical records.

When her labor pains began last April, Dorothy Bell Moran, a troubled
28-year-old, showed up alone at Alta View Hospital in the Salt Lake City
area. As identification, she handed over a driver's license. It wasn't
hers, but Moran looked enough like the woman in the photo — young, with
long dark hair and a toothy smile — that no one questioned her.

Moran was only 33 weeks pregnant, so she was taken to nearby University
Hospital, which is better equipped to handle preemies. When she refused
to pronounce her name at the intake desk, the sympathetic clerk assumed
it was because she was in so much pain. Moran gave birth to a daughter
without any friends or family around. Several days later, when the
hospital ran tests, the baby girl came up positive for methamphetamine.
But doctors couldn't talk to Moran — at some point, she had walked out
of the hospital, leaving her newborn behind.

Soon after the baby's tests came back, Anndorie Sachs, 28, a biomedical
engineering student who lives in Salt Lake City with her husband and
kids, received a call from the Utah Division of Child and Family
Services (DCFS). Your newborn, the investigator said, tested positive
for drugs. "What do you mean?" Sachs recalls saying. "I didn't just have
a baby." The agent's response: "Don't try to pull that with me!" She
notified Sachs that DCFS was ready to put through paperwork to take
custody of Sachs's four children, then ages 2 to 7.

Sachs connected the dots right away: Two months earlier, someone had
stolen her driver's license from her car. Remembering that, she called
her husband, a contractor, who sped home from work.

As the couple was sitting in their living room anxiously awaiting the
agent, their 7-year-old daughter, Sierra, was being pulled from her
first-grade classroom. The DCFS agent asked the girl if her mother had
been in the hospital recently. Sierra answered yes, and proudly showed
off the spot on her arm where a nurse had inserted an IV. (She'd had an
infection several days earlier.) Then the investigator asked Sierra if
her mom had a new baby. The little girl said no. And, no, her mother had
not been away for the past few days.

When the DCFS agent finally arrived at the house, she could see that
Sachs hadn't given birth recently. But she still needed proof that this
wasn't the woman who had abandoned an infant in a hospital and racked up
a $10,000 bill. "It took five full minutes," Sachs recalls, "before she
started to believe what I was saying."

The accusations were dropped and Sachs was cleared of paying Moran's
hospital bills, but the ordeal wasn't over. Sachs's medical records had
been altered to include the blood type and general health record of a
complete stranger. The two hospitals assured Sachs that they'd fixed the
problem, but she can't be 100 percent sure because — in a catch-22 of
utter insanity — they wouldn't let her see her own records, lest Moran's
privacy rights be violated. "It's especially scary," she says, "because
I have a blood-clotting disorder. If a doctor gave me the wrong blood
type, it could be fatal."

Target: Your Insurance Card
Using someone else's name to get health care is known as medical
identity theft, and it's a growing headache for hospitals and insurance
companies — and, worse than that, for the approximately 200,000
Americans who will become victims every year, the Federal Trade
Commission (FTC) estimates.

This scam comprises only about 2 percent of the total ID theft cases
reported annually to the FTC. But it's "a sleeper that's starting to
awake," says Kirk Nahra, a Washington, D.C., lawyer who chairs an
American Bar Association group addressing the issue. "As health-care
costs continue to go up," he says, "people will try to get help without
paying for it."

Many reported cases like Dorothy Moran's are individual crimes of
desperation. Others are more calculated inside jobs, according to a 2006
report by the World Privacy Forum. Last year, for example, a
receptionist at the Cleveland Clinic Florida in Weston, FL, secretly
copied the medical records of more than 1,100 people. Then she sold them
to her cousin, who ran a medical clinic in Naples, FL. He billed the
patients' insurance for a multitude of tests and procedures — making the
people appear much sicker than they really were — so he could cash in.
In total, he collected $2.8 million.

"Can you imagine if, say, HIV were put into your records erroneously?"
says Pam Dixon, executive director of the World Privacy Forum and author
of the report. She says victims often aren't aware of errors until
months or even years later, when they're denied coverage or are informed
that they've maxed out their insurance.

How do thieves cover their tracks? "Typically, with these inside cases,
the first thing they do is change the address on the insurance form, so
you never receive an explanation-of-benefits letter," says Dixon. "So if
you ever stop getting those notices, be alarmed."

While victims of financial ID theft can restore their credit records,
there are no guidelines in place for this scary new type of fraud.
Medical records are scattered among providers, so they're hard to
correct. Sachs learned this the hard way. Several months after the Moran
incident, she came down with a kidney infection. "I didn't want to deal
with any mix-ups," Sachs explains, so she sought treatment at a
different local hospital. Yet when a staffer opened her patient profile,
Sachs saw that people in Las Vegas were listed as her emergency contacts
— even though she has no friends or relatives there. University Hospital
eventually did allow her to review her records, and she saw no major
errors. But when she asked to check her file at Alta View, several
hospital representatives told her they could find no record of her in
the system — even though she had been a patient there before the Moran
episode. The bottom line: She has no way of knowing how many Las
Vegas-like errors may have found their way into the vast database of
electronic records.

The repercussions of medical ID theft go beyond hospitals. More than
one-third of Fortune 500 companies now demand to see medical records
before making hires. "There are people who cannot get a job or insurance
because their records say they have MS, HIV, or some other illness that
they don't really have," says Dixon. "These people are tagged with
conditions that make them uninsurable."

Moran has managed to avoid paying a major price for her actions. Charged
with identity theft, she accepted a plea bargain and last fall, was
sentenced to drug treatment and three years' probation in return for
pleading guilty in a separate, unrelated case. Charges in the Sachs case
were dismissed and the baby, who had been in foster care, was eventually
returned to her mother.

Today, Sachs feels a mixture of anger and pity. "Mostly, I feel sorry
for the baby," she says. "I keep reminding myself that she's the bigger
victim." (DCFS reported at press time that the child was with Moran in a
residential drug treatment center and that both were doing well.)

Target: Your Social Security Number
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.

In Houston, a city that ranks fourth in reported cases of identity theft
per capita, Brewer is now pursuing the ID mills that brazenly sell fake
cards, arguing that they promote other kinds of illegal activity. "The
people who use these numbers are officially not on the grid," he says.
"That has implications for safety and terrorism."

The real problem is that only a tiny fraction of SSN victims are even
aware of the theft. If the imposter regularly pays his or her bills on
time, the crime is uncovered only by the better credit monitoring
services. In other cases, the fraud is exposed by sheer chance, as in
the case of Grace Weed.

Grace was just 5 years old when her parents learned her SSN had been
stolen. As she entered kindergarten last year in Magna, UT, her father
switched jobs. Since his new health insurance wouldn't kick in for a few
months, he and his wife, Lynette, enrolled Grace and her older brother
in a state-run insurance program for children. Not long afterward,
Lynette Weed received a call from an insurance administrator, who said
Grace's SSN showed income earnings, which would disqualify the girl for
aid. "She implied that if I was using Grace's number, I'd better stop,"
says Weed, who owns a beauty salon. (Some parents fraudulently use their
children's numbers when their own credit record is poor. Illegal
immigrants whose children are born in the United States have also been
known to use their kids' numbers.) "She could tell by my surprise that I
wasn't doing anything wrong. Then she said, 'Someone must have stolen
your daughter's number.'"

Weed called the attorney general's office, filed a police report, and
learned to her astonishment that at least 10 people (or someone with 10
different aliases) were using Grace's number — some since 2002, the year
after her birth.

Knowing that there were 10 imposters operating in a state with only one
major metropolitan center, Weed wasn't surprised when she got a call
from the billing department at the eye, ear, nose, and throat
specialists where Grace had been a patient. At their Park City office,
they had turned away a man who had given Grace's SSN as identification.
"I thanked the receptionist and said,'Please call the police and the
attorney general.'"

After the Weeds reported the Social Security theft, there was little
else to be done about the problem. The SSA refused to issue Grace
another number. (According to an agency spokesperson, a new number may
be issued if a victim "continues to be disadvantaged by using the
original number." Because she was still a child, Grace hadn't faced any
problems and thus presumably could not be given a new number.) A
spokesman for Experian, one of the three national credit-reporting
companies, insists that Grace and the imposters will remain separate in
their computer files. If that were the case, she would have no trouble
getting student loans down the line.

Experts say that this forecast is far too sunny. If someone is using
your SSN, the system is supposed to register at least one other shared
piece of data — a name, address, or birth date — before the thief's
information shows up on your credit report. "The problem is that
credit-bureau merging software makes mistakes, and even if you share
just the SSN with another person, that could be enough to trash your
credit," explains Edward Jamison, a California attorney who specializes
in credit matters. "It's not a perfect system."

The Weeds expect a lifelong battle with Grace's number. But there has
been progress. Lynette Weed said that two men who have used Grace's
number are currently being investigated; if prosecuted, they could face
a fine and possible prison time. "If there are court hearings, I plan to
attend with Grace," she says. "I want to show these men that there was a
real person attached to that number, a little girl who's going to have
to clean up their mess later on."

How to Detect and Prevent ID Theft
The first step is simple: Get a free annual review of your family's
credit reports. Here, seven other helpful tips

Medical ID Fraud

* Protect your insurance card as carefully as your credit cards. If
it gets lost or stolen, alert your insurance company immediately and
request a new number.
* Be selective about where you get care. Avoid clinics that
advertise free exams; they may just want to copy your health insurance
information.
* Carefully read over the explanation-of-benefits notices that your
insurance company provides. Make sure you recognize the doctors' names
and the dates of treatment — an unfamiliar provider is a big warning
sign. If you rarely see your doctors, call your insurance carrier and
ask for an annual summary of all procedures that were paid in your name.

Social Security ID Fraud

* Use a credit monitoring service (roughly $11 per month), which
notifies you within 24 hours if there's unusual activity. Identity theft
expert Frank W. Abagnale, author of Catch Me If You Can and Stealing
Your Life, recommends PrivacyGuard, Equifax Credit Watch, and Identity
Guard.
* Before you toss sensitive financial documents and those credit
card solicitations that come in the mail, destroy them in a micro-cut
shredder.
* Don't give out your SSN freely. "There's no reason the storage
center or the dog pound needs to know your number," says Abagnale.
* Never answer unsolicited phone or e-mail messages about your
accounts, even if they sound or look legitimate.

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