Identity Fraud More Prevalent Than You'd Imagine

Forget 101 Dalmatians, try 101 Social Security numbers. That's how many Laura from East St. Louis, Mo., has used on various applications, along with nine different last names and eight birth dates. And even that number pales compared to Thomas from Philadelphia, who has used 165 Social Security numbers and 44 birth dates. Welcome to the world of repeat fraudsters.

At least 16% of Americans have engaged in some kind of identity fraud, according to a new study by consumer risk management company ID Analytics. The study examined Social Security numbers, names and dates of birth on more than 1 billion applications for products and services where identity information was required. Matching common aspects and variations on personal information, the study was able to identify 300 million unique individuals. Of those, 45 million had fraudulent manipulations.

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"I am surprised at how high the number is," Dr. Stephen Coggeshall, the lead researcher for the study, told DailyFinance. Identity manipulation occurs when someone changes a digit on their Social Security number, alters a date of birth, or uses a false name.

The majority of these manipulated identities are caught in the application process for cell phones, auto loans or other purchases that require this information, Coggeshall said. But the Lauras and Thomases of this world continue to try, hoping they'll get lucky eventually. And that can mean trouble for you.

"When fraudsters do this, they are inadvertently walking on someone else's Social Security number," Coggeshall said. "Now that bad record is now tied to him [the consumer]."

Identity fraud takes place for any number of reasons, including bad credit or criminal history. Coggeshall says small variations on an existing true identity is easier than stealing a stranger's whole identity, which is one reason it is so prevalent. In addition to posing a threat to individuals, he says it also adds pressure on prices and fees, sending them ever upward, for services that require applications.

The study also found that the prevalence of manipulated identities was higher in the South and Northeast, and some specific cities including Houston, Detroit and New York.

Five Things You Can Do to Protect Yourself

1. Know the Law: Manipulating your personal information, like date of birth or social security number, is illegal. More than 10 million married couples have attempted to share a Social Security number between spouses, according to the study. That's not legal either. You're married, not the same person.

2. Check Your Credit Report for Abnormal Activity: You hear it over and over again, but the best place to see what is happening with your credit is by checking your credit report. Get yours for free at Annualcreditreport.com.

3. Learn Your Risk: If you're unsure how exposed you are to identity fraud, you can test your level of risk with a free online tool like MyIDScore.com.

4. Protect Your Personal Information: Signing up with in an identity-theft protection service may be overkill (and a poor investment), but it's vital to stay vigilant and protect your personal information. Only provide it when it's necessary and to reputable businesses.

5. Take Action: If you think you have been a victim of identity fraud or theft, learn more about how you can deter, detect and defend yourself against a fraudster at the FTC's resource site.