Identity theft-related crimes are often associated with malicious strangers who prey upon unsuspecting individuals via the internet.
Truth be told, someone closer to home, such as a friend, sibling, parent, caregiver, coworker or neighbor, can also perpetrate identity theft – known broadly as familiar fraud.
Someone stealing your identity is bad enough. However, when family members, friends or acquaintances betray your trust, the damages go beyond a ruined credit score.
While cyberthieves and scammers go to great lengths to steal personally identifiable information (PII) to commit fraud, relatives often have direct access to the victims’ information, making this type of identity fraud more challenging to prevent and detect.
Financially desperate family members can misuse the personal information of their loved ones for financial gain, including:
1. Stealing the identity of a child to apply for loans and credit cards. This type of familiar fraud was portrayed in the Netflix TV series Ginny and Georgia. Georgia, a mother of two desperately needed money and took out credit cards in her minor son’s name. According to a recent Javelin study, family members or close friends perpetrated 27% of child identity theft cases.
2. College students are also among the vulnerable age groups. Javelin’s research states that students are four times more likely to become victims of identity theft committed by relatives, roommates or friends.
3. Senior family members, such as elderly parents or grandparents, are also highly exposed to this form of identity theft because they generally have more life savings and good credit scores. Family members or caretakers can easily deceive seniors with serious health problems and poor memory.
4. A sibling can also misuse the personal information of a brother or sister for financial gain or other unlawful uses. Sibling identity theft is often seen in cases with lookalike siblings who may impersonate the other for medical benefits, employment or to commit serious felonies, at the cost of a criminal record and jail time for the victim.
5. The identity of a spouse can be used to open or gain access to financial accounts such as a 401(k) retirement fund in the name of the victim.
6. Assuming the identity of a deceased family member may sound far-fetched, but it does happen. Family members are known to exploit the death of a relative to claim Social Security benefits or commit deed fraud by taking over properties of the deceased relative.
The Identity Theft Resource Center believes that over 500,000 children and over 2 million seniors are affected by familiar fraud in the US. The numbers may be even higher, as victims are often reluctant to report loved ones.
When the person committing identity crimes is a family member or friend, the emotional toll can be much greater than the financial losses. Here are five steps you can take to help prevent familiar fraud:
No matter whether your identity and finances are targeted by a stranger or someone you know, restoring the damages to your finances is never easy.
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