Tuesday, September 20, 2005

Identity Theft/Check Fraud in Katrina

In a story released by Reuters, the Louisiana Attorney General's Office is reporting that identity theft is complicating getting benefits to victims. When they apply, they discover that someone has already applied (using their information) and received benefits in their name.

Besides identity theft, I would imagine that we will being seeing a lot of check fraud in the near term. The reason for this is that the government and relief agencies will be issuing checks for benefits. The U.S. Postal Service is recommending that displaced victims submit a "change of address" to a temporary address, where they can pick up their mail in order to avoid having it stolen.

Mail theft, especially to steal government checks, is nothing new. The criminals involved in this target times when they know a lot of checks are in the mail. Every year, there is a huge surge of this activity during tax season due of the amount of refund checks being mailed.

In the case of stolen checks, the criminals will have to assume the identity of the person entitled to the check. Many Katrina victims were stranded without their identification and agencies, such as the Social Security Administration have set up remote offices to address this problem. With the combination of temporary offices set up to issue identification and masses of displaced people, it creates an environment that identity thieves/check fraudsters will probably try to take advantage of.

In the ensuing confusion, there have already been reports of people "double and triple" dipping for Katrina benefits. One common method of doing this is to cash in the original benefit payment (normally a check) and then claim it was never received.

This activity is starting to occur all over the country with people showing up, claiming to be displaced victims and applying for benefits. There are reports of people being arrested for this, as well as filing false claims, nationwide.

I wrote about some of this in an earlier post, Katrina Fraud Far and Wide .

There are many other methods the crooks use to pass bad checks. Here is a document from the Treasury Department that is pretty extensive on Check Fraud:


For the story by Reuters, click on the title of this post.

1 comment:

Anonymous said...

I work for a financial institution and I heard that they are counterfeitng FEMA checks. This is on the West Coast.