Why your business could be a dead loss

Frank Abagnale of Catch Me If You Can fame recently issued a warning to UK businesses that almost everyone in the country has already had their identity stolen by digital fraudsters.
But data hacks that come to light often aren’t recent; they have taken place three or fours years earlier, meaning that gangs specialising in deceased fraud merely need to match the obituary with the personal data they already have. Deceased data has a higher market value than live data as typically the fraud goes undetected for longer.
Nowhere is this more rampant than in Abagnale’s native US, where there are 6.5 million people (which equates to nearly 10% of the UK) who have active social security records that are 112 years of age or older, despite the fact that there are only a few dozen people known to be that old in the entire world.
This is costing American taxpayers billions each year. A investigative study by CBS New’s 60 Minutes programme revealed that nearly $125bn was disbursed by federal agencies to ineligible recipients, while more than $1bn in farm subsidies and disaster aid was paid to 170,000 dead people over a six-year period.
And the Office of Personnel Management Inspector General found just four years ago that $601m in improper payments were made to federal retirees found to have died over the previous five years.
It is therefore unsurprising that recently Senator Mark Warner, a member of the Senate Finance Committee introduced bipartisan legislation to help save millions of federal dollars by curbing erroneous payments to deceased individuals.
The Stopping Improper Payments to Deceased People Act includes allowing Federal Agencies Access to the Complete Death Database, a file which is maintained by the Social Security Administration (SSA). The legislation establishes procedures to ensure more accurate death data, for example screening for individuals aged over 112 and flagging them as deceased.
This is important as many of these active social security numbers are being used fraudulently by identity thieves to claim tax refunds. The Internal Revenue Service (IRS) estimated it paid out $5.8bn in fraudulent tax refunds in 2013 because of identity theft.
The new Act puts more procedures in place to identify cases of identity theft more quickly and stop payments.
Deceased identity theft is also a problem in the UK. Organised criminal groups are selling off lists containing the personal information of deceased individuals gathered from obituaries and graveyards to fraudsters.
The information is used to take out credit with banks and retailers worth an estimated £3.3bn per year. And while financial organisations have tightened up means of flagging deceased ID fraud, the retail and technology industries are still being preyed upon. It is estimated that hundreds of thousands of pounds of technology, such as iPhones and tablets are being purchased on contract by dead people.
All of which poses the question for UK businesses: isn’t it about time you started taking suppression seriously?