This Real Identity Theft Stories blog series is dedicated to sharing real-world stories of identity fraud and theft — and just how devastating these crimes can be on organizations, individuals, and families. This post focuses on how a Florida woman used stolen personal identity, financial, and medical information to apply for fraudulent student loans and file phony tax returns.
If You Think Education Is Expensive — Try Identity Theft
Or “try ignorance,” as the old saying goes. This case begins with a routine traffic stop of April Thornton of Lake Alfred, FL. After discovering Thornton’s driver’s license was suspended, the arresting officer conducted a legal search of the vehicle and found copious numbers of identity cards scattered throughout the car and in the trunk, from college debit cards to stolen Social Security cards.
Investigators from the Internal Revenue Service (IRS), U.S. Secret Service, and the U.S. Department of Education (DOE) Office of Inspector General subsequently discovered that Thornton had committed tax identity theft, filing 202 false tax returns between 2011 and 2013 and realizing $217,738 in illegal refunds. They also uncovered 32 instances of student-loan fraud using the stolen identities in Thornton’s possession, resulting in $121,238 in disbursements. Thornton, who pleaded guilty to the crime, was sentenced to 36 months in prison and three years of supervised release. Thornton was also ordered to pay restitution to the IRS and the DOE of more than $300,000.
In total, Thornton had stolen personal identity information from more than 2,300 people and had reportedly attempted to scam the IRS and DOE out of more than $1.56 million in illegal refunds and loans.
But for many of the victims, the damage was done. Their lives were disrupted in a way that could ripple far into the future, from eligibility for car loans and home mortgages. In this case, many of the victims were unaware they were victims at all.
How Does Student Identity Fraud Work?
When April Thornton accessed personal data such as names, Social Security numbers (SSN), bank, and credit card information, she used this information to illegally obtain college debit cards that she then deployed to get cash advances. (Often, the amounts withdrawn are purposely kept low to throw off suspicion.) Some fraudsters also use stolen data to set up mobile phone accounts or apply for personal loans.
For example, children are a prime target for student loan identity theft because fraudsters can take advantage of a child’s Personally Identifiable Information (PII) for years before the victim realizes they’ve been compromised. When the time comes to apply for student loans, you may discover that the loan companies allege that they already have issued student loans to someone with your child’s name. How is this even possible? Their identities were stolen. Typically, all it takes to apply for a student loan is a name, date of birth, address, and SSN — something any enterprising ID thief can discover by physically sifting through trash or hacking a computer or mobile device.
Also, remember that for about $10, an identity thief can buy a legitimate (stolen) SSN from the Dark Web and add a different name, birthdate, address, and phone number to start a fraudulent credit file. Such fraud is called synthetic identity theft and is it notoriously difficult to detect.
But student identity theft isn’t the only way unscrupulous people can con you or your college-aged children out of your money. Scams can come in many shapes and sizes, as the following list shows:
- Financial aid services — Companies that simply charge you for help or information regarding how to apply for financial aid aren’t necessarily fraudulent. But if a company doesn’t deliver on what it promises, it is scamming you. You never have to pay for help with your federal financial aid or student loans. There are many sources of information and assistance that are free.
- Federal student tax scam — Especially at back-to-school time, criminals have been known to call college students and tell them that they owe a federal student tax. This tax, however, doesn’t exist. The scammer usually says they’re from the IRS, a tax company, or a state revenue department, pushing the student to wire money immediately — or they’ll threaten to notify the police. Simply hang up.
- Fake job offers — Scammers post jobs that appeal to cash-strapped students: babysitting, dog walking, and part-time work from home. They will usually either send a student a larger check for “work supplies” that bounces (after the student has withdrawn funds) or ask for bank information to set up a direct deposit. Both scenarios end with criminals walking away with the student’s identity, and sometimes, their money.
- Social media scams — Cyberstalkers will set up fake social networking accounts and “friend” unsuspecting students by claiming to have a shared interest or contact. Then, they hope their new connections will overshare personal details that they can exploit for identity theft. Limit the amount of personal information you post on social networking sites. Never post your SSN, and consider keeping your birthday, home address, and home phone number confidential.
5 Ways to Protect Your Child’s Personal Information
The odds of identity theft are high: children are 51 times more likely to be victims of identity theft than adults, and more than one million are victims each year. Here are five steps that you can take to protect family members against identity theft:
- Understand where your and your child’s PII is stored, particularly at schools, dentists, and medical offices; verify that their records are secure.
- Know how any PII you provide on school forms will be used and with whom it will be shared. Verify that these forms are updated and that it is indeed necessary to provide PII about your child.
- Ask about the school’s directory information policy and what information about your child is included. You have the choice to opt-out.
- Consider a credit freeze for minors, available from all three major credit bureaus, making it more difficult for a fraudster to open new accounts with a child’s PII.
- Keep kids safe on social media Teach them not to overshare their personal information and to only connect with those they know.
For more comprehensive and proactive protection, consider IdentityForce for both credit monitoring and the #1-rated, best identity theft protection. If you are concerned about safeguarding your family against child identity theft, IdentityForce offers ChildWatch as an additional service available to any adult IdentityForce membership. IdentityForce also has family identity theft protection plans available for multiple adults and unlimited children. Sign up today for a free 30-day trial.