Government Identity Theft Is Dropping…Or Is It?

When consumers hear about identity theft, their minds may instantly go to their credit cards or their bank accounts. And to be honest, the overwhelming majority of identity theft crimes involve the fraudulent use of someone’s financial accounts. But that doesn’t mean that the other types of identity theft—like medical identity theft, child identity theft, or even criminal identity theft—aren’t serious problems that can have lasting consequences for the victim.

One of the less talked about but increasingly common forms is government identity theft, and it’s often misunderstood even by its victims. It occurs when a criminal uses someone’s identity to gain employment, sign up for unemployment benefits or the SNAP program (more commonly known as food stamps, but is the Supplemental Nutrition Assistance Program), apply for disability benefits, or defraud other similar programs offered through the government. One of the most common crimes associated with government identity theft is tax refund fraud, which is such a lucrative crime that even notoriously violent street gangs have turned to sitting at computers and filing thousands of phony tax returns in order to make a profit.

Tax return fraud is a multi-billion dollar a year problem in the US, one that’s only expected to get worse in the wake of record numbers of data breaches. The prevalence of this crime is what led to an unheard of spike in reports to the Identity Theft Resource Center’s victim call center this year, with government identity theft calls reaching staggering percentages before slowly decreasing again.

But one of the all-too-easy mistakes to make with government identity theft is the notion that it’s only a tax season problem. In the early months of the year, most victims reach out for help once they attempt to file their legitimate returns and are told someone has already filed using their information. Now that the mid-April deadline is well behind us, consumers can’t let their guards down; this is the perfect time for scammers to contact taxpayers and pose as IRS agents, claiming the individual’s returns weren’t filed, weren’t paid in full, or other plausible but fraudulent scenarios.

Of course, there’s another truth to the decline in call percentage involving government identity theft. The ITRC has found that it’s not that this crime has decreased so much, but more than other forms of identity theft have increased to the point that the percentage of calls is now skewed in favor of other types of crime. That means consumers can’t be too cautious about protecting themselves from tax and other government fraud, even while having to be extra-vigilant about other forms of identity theft.

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Eva Casey Velasquez is the President/CEO at the Identity Theft Resource Center, a non-profit organization which serves victims of identity theft. Ms. Velasquez previously served as the Vice President of Operations for the San Diego Better Business Bureau and spent 21 years at the San Diego District Attorney’s Office. The last 11 of those years were spent conducting economic crimes investigations, with a focus on consumer protection cases such as false advertising and unfair business practices.