Identity Theft on the Decline, but Tax Fraud Increasing

Guest Post by Nussin S. Fogel, Esq.

Over 250,000 identity theft complaints were filed across the US in 2010. The good news is that overall identity theft is declining: complaints peaked in 2008 with 314,521 cases. This decline may be attributed to greater consumer awareness of scams like “phishing”, in which a criminal sends an email that purports to be from a legitimate bank, credit card company, or other institution in order to get access to a victim’s private financial account information and passwords.

Credit card companies are also becoming more vigilant about identifying suspicious charges and following up with card-holders. The Federal Trade Commission is a US government agency that tracks identity theft and fraud. The FTC categorizes identity theft into the following categories:

  1. Government documents or benefits fraud
  2. Credit card fraud
  3. Phone or utilities fraud
  4. Employment-related fraud
  5. Bank fraud
  6. Loan fraud
  7. All other

Excluding “other,” credit card fraud was the biggest category in 2007, accounting for 20% of the total victims of identity theft. Government benefits fraud was in second place with 15%. By 2010 those figures had reversed: credit card fraud declined to 15% of the total, and government benefits fraud increased to 19%.

One problem is, thieves have gotten much more creative when it comes to government benefits fraud, and tax fraud based on identity theft in particular. In the past, criminals hoping to file fake tax returns would try to obtain identity information by sending phishing emails. Since that no longer works as well as it once did, crooks now plant confederates in nursing homes, schools, banks, auto loan firms, and other places personal records are kept. Or they bribe employees of these institutions to obtain names, addresses, and social security numbers criminals can use to file fraudulent tax returns. Whereas phishing generates victims one at a time, stealing personnel files can yield hundreds or thousands of victims at once.

Florida leads the nation in identity theft, with 21,581 identity thefts reported in 2010, a rate of 114.8 per 100,000 people. 24% of identity theft fraud cases in Florida involved government benefits, and 14% involved bank fraud.

People from all walks of life have been charged with identity theft tax fraud: members of street gangs and the mafia, small business owners, members of the armed services, prison inmates, and even former NFL football players. According to the Miami Herald, William Joseph, a former University of Miami defensive tackle who went on to play for the Giants and the Raiders in the NFL, pled guilty to tax-related fraud charges that will put him in prison for at least two years. He and two other former players cashed about $500,000 in income tax refund checks obtained via identity theft.

The FTC offers several free publications to help people avoid or cope with identity theft. These publications include:

About the Author Nussin S. Fogel, Esq., has been practicing for over 25 years as a New York slip and fall lawyer. Mr. Fogel founded Fogel Law, a firm specializing in Motor Vehicle Injuries, Slip and Fall Accidents, and other areas of Personal Injury Law. He has published on various aspects of Personal Injury Law across the web.

About the Author

Lana is a real life Identity Theft Victim. Identity Theft Manifesto is a result of her own struggles to clear her credit, her name and reputation. She is on the mission to research, learn more and educate her readers about ID Theft Crime.