In today’s increasingly connected world, identity theft has become a serious problem.
It is estimated that 17.6 million Americans are the victims of some form of identity theft every year. Of those attacks, 2.5 million happen to someone who is deceased. This means 2,200 deceased Americans will be deliberately targeted and have their identities stolen every single day. Another 1.6 million Americans will have their identities stolen by chance when fabricated Social Security numbers happen to match those belonging to deceased individuals. Identity thieves fraudulently apply for loans, drain bank accounts, acquire credit cards, and even establish cell phone plans, according to research conducted by ID Analytics. Identity theft is the 21st Century’s version of grave robbing.
When a loved one passes away, worrying about protecting their identity or erasing their electronic footprint isn’t usually a family’s top priority. On average, an American has over 150 locations where their electronic footprint resides—from credit card accounts to grocery store rewards. The electronic footprint is composed of electronic records and digital assets.
Identity thieves who target the deceased are cunning and relentless. Fraudsters often stoop to using obituaries to obtain Social Security numbers, previous addresses, birthdays, employment histories, and other information that they then use to drain the deceased's current accounts, file false tax returns, open new credit accounts, and accrue tremendous debt on behalf of the deceased. Though this behavior is unfathomable to most, it happens everyday.
Identity theft has never been more rampant than it is now, which is why it's so important to know what can be done to avoid it. The best way to protect posthumously vulnerable information is to be prepared before death, since it can take up to six months for financial institutions, credit bureaus, and the Social Security Administration to update their records to reflect that the account holder is deceased.
Four Steps to Prevent Identity Theft Before Death
Request a credit freeze. This will block any identity thieves from opening up new lines of credit. Your credit may be frozen and unfrozen as many times as is needed, without penalty. How to accomplish that is discussed later in this article.
Choose a trusted personal representative (executor). This is the person or institution you put in charge of administering your estate and carrying out your final wishes. Picking the right personal representative can help ensure the prompt, accurate distribution of your possessions with minimal family friction. Whoever you choose to serve as your personal representative, be sure to get that person’s approval before naming him or her or it in your will. And once you’ve made your choice, go over your financial details with that person, and let that person know where you keep all your important documents and financial information.
Keep your will up to date. Be sure to make updates to your will (and revocation trust if one is used as a will substitute) if there are any major life changes like moving, marital status changes, or having a child. It is also very important to let your personal representative know where the latest copy of your will is located. Things can get very complicated if any major life events or law changes have happened since the last will was created.
Assemble a complete inventory of all assets physical and digital. This inventory, though comprehensive, will allow a personal representative to determine where you have assets. Make sure to keep this list updated and in a secure location, but do not include passwords or logins. This will help personal representatives to know which accounts to shut down and to continue to monitor, and will also alert the the representative as to which entities to notified of one’s death.
Four Immediate Steps to Prevent Identity Theft After Death
Limit the information in an obituary. This may sound extreme, but it can save from fraudsters getting information easily. Do what is needed to honor the deceased, but not to expose a credit profile for an identity thief. Avoid including personal information such as the deceased’s birthdate, home address, or mother’s maiden name.
Freeze the deceased’s bank accounts. A fiduciary should immediately notify financial institutions that the account holder has died, and the accounts are to be frozen pending further instructions from the personal representative. When communicating with these companies, maintain a documented trail of communication for your records.
Close down avenues, which can make it easier to fake an identity. Funeral homes should be the first to notify the Social Security Administration (SSA) of the death, so if that person was having benefits deposited in a financial institution, the SSA notifies the bank or credit union. The SSA will also inform TransUnion, one of the three main credit bureaus. However, you will need to contact the appropriate state’s Department of Motor Vehicles and the other two main credit bureaus, Equifax and Experian. Also, be sure to remove the names of the deceased from any accounts where they are listed as joint account holders. Physical credit cards, driver’s licenses, and passports should all be immediately decommissioned.
Identify accounts unknown to the personal representative and shut those down too. Unfortunately, many people don’t have accurate lists of all of their accounts and/or don’t give them to their personal representative. Therefore, it becomes necessary to proactively search, identify, and freeze accounts that are not known to the personal representative.
Unfortunately, there is no way to 100% protect deceased loved ones’ identities, since identity thieves won’t be scared away by garlic or wooden stakes. However, with a little preparation, it is much easier to keep a deceased loved one's identity safe from theft.
Betsy Ehrenberg is a business leader and innovator in the tech industry. She has successfully started, built and sold two software companies. Her first Silicon Valley venture was Operations Control Systems, a software company providing performance and security services to Fortune 50 companies, later sold to Cisco Systems, Inc. In 2003, she founded Veriden, providing biometric identification to secure financial transactions in the payment processing space. In addition to her business acumen for software companies, she has also and founded two non-profits providing art business education.
Currently Betsy is the CEO and Founder of Legacy Concierge, a revolutionary cloud-based software service platform that manages an individual’s asset and electronic footprint by creating an electronic vault of all their digital assets. Upon death, the platform facilitates the removal of the deceased’s digital footprint, thereby helping to prevent identity theft and preserve financial accounts. Legacy Concierge operates nationwide and currently maintains notification protocols for government agencies and private enterprises.
Betsy is a winner of the Woman of the Year – Business in Santa Clara County (Silicon Valley) award, she has also presented as a Keynote Speaker at the Association for Computer Operations Management, and at Washington DC’s Security Symposium on Biometric Identification.
Betsy lives in Santa Fe, New Mexico with her husband, and is a nationally recognized advocate, collector of contemporary studio glass art and an expert alpine skier. She sits on the board of several civil rights organizations and is an Advisory Board Member of the Santa Fe Business Incubator.