"Thieves are pocketing fraudulent tax refunds after filing returns with personal information about recently deceased children that they found in the Death Master File. Armed with the deceased child's Social Security number and other personal information, the crooks falsely claim them as dependents." ...Jamie May, chief investigator at AllClearID.com
The Death Master File (DMF) is a who's who of about 87 million Americans who have died over the past 75 years. It includes names, state or county of residence, zip codes, dates of birth - death and of course Social Security Numbers. The file is maintained by the Social Security Administration.
Proper Use Of The DMF
It’s primarily used by leading government, financial, investigative, credit reporting organization, medical research and other industries to verify death as well as to prevent fraud and comply with the USA Patriot Act since 9-11. Medical researchers, hospitals, oncology programs all need to track former patients and study subjects. The SSA uses death information from the DMF to stop benefits to those who have died and provide benefits to surviving spouses and children.
Investigative firms use the data to verify the death of persons, in the course of their investigations. Pension funds, insurance organizations, Federal, State and Local governments and others responsible for payments to recipients/retirees all need to know if they might be sending checks to deceased persons.
By methodically running financial, credit, payment and other applications against the Death Master File, the financial community, insurance companies, security firms and state and local governments are better able to identify and prevent identity fraud. For John Q. Public, the DMF offers individuals the opportunity to search for loved ones, or work toward growing their family trees. Professional and amateur genealogists can search for missing links.
A Lack Of And Or Improper Use Of DMF
These files have been a valuable resource for life insurance companies when they use it, and ignored when some do not. These companies have access to the list to find out if a life insurance policyholder has died, at which point they must pay the beneficiaries. But, many insurers have not consulted the file, due to either neglect or even intent by leaving it up to beneficiaries to track down the policies and claim their money.
If the beneficiary doesn’t know their may be monies from deceased policyholders, the insurance company could keep it.
This all came to light in 2011 when Florida Insurance Commissioner Kevin McCarty asserted that life insurers had held back $1 billion that could have gone to beneficiaries if insurers had only checked the Death Master File to learn whether their policyholders had died. Other insurance regulators quickly followed up.
Life insurers already have paid nearly $53 million as a result, according to a statement released by New York State Department of Financial Services Superintendent Benjamin Lawsky.
According to one company’s chief investigator… "Thieves are pocketing fraudulent tax refunds after filing returns with personal information about recently deceased children that they found in the Death Master File. Armed with the deceased child's Social Security number and other personal information, the crooks falsely claim them as dependents."
One Families Tragedy Turns Into IRS Nightmare
On February 2, 2012 Attorney Jonathan E. Agin testified in front of the House Ways And Means Committee about the tragic death of his 5 year old daughter Alexis, and how thieves then stole her information from organizations who take information from the DMF and offer it to the public as “genealogical data.” Thieves were able to obtain tax refunds from the IRS in 2010 by claiming his daughter as a dependant.
“In October 2011, after completing the difficult and grueling task of finalizing our 2010 taxes, I received a telephone call from our accountant advising us that someone had already filed a tax return for 2010 using Alexis’ social security number.” He went on to testify how “that same day, we reached out to the community of grieving cancer parents that we have come to know since April 2008, and told them what had happened. With incredulous amazement, we learned within a single hour of no fewer than fourteen other families whose children had died and also had experienced the additional travesty of their child’s social security number being stolen.”
Within a matter of seconds on the internet, “I was able to locate her complete social security number and other personal identifying information, including her birth and death dates, on several websites intended for genealogical research. I immediately contacted one of the services, who directed me to their outside counsel. When I asked the attorney to remove my daughter’s personal information from the website, he advised me that the service was within its legal rights to display the information and that it refused to remove her social security number.”
The common denominator in this tragic story is the Death Master File.
Media And Public Probes Force Changes
According to Jonathan Agin, due to an ongoing media probe and public pressure, the IRS for the first time recently responded to inquiries on this issue, and estimated that there were approximately 350,000 fraudulent tax filings in 2010. “According to IRS officials, these fraudulent filings claimed $1.25 billion in refunds. The cost to the federal government to investigate and prosecute that magnitude of fraud could be spent in much better ways, including research to fund cures for our children.”
In addition, it is worth noting that the federal government discloses far more information than is required.
In June 2008, the Inspector General of the Social Security Administration issued a critical report detailing how publication of the DMF has resulted in the breach of citizens’ personally identifiable information.2 The report concludes that the Social Security Administration “discloses far more detailed personal information in the DMF than required under the original consent judgment that resulted in the creation of the DMF. Under the terms of the agreement, SSA was to compile a list that identified deceased number holders’ SSN, surnames and dates of death.
Recent Changes In Public Access To DMF
As of Nov. 1, 2011, the SSA no longer discloses what it calls "protected state records" of deaths. Essentially, any records it acquires from the states, to insurance companies or the public will be withheld from the DMF. This action has declined the size of the Death Master File substantially; 4.2 million of its 89 million records will be excised from the public files and made available only to federal agencies.
And of the 2.8 million deaths reported to the file each year, only 1 million will be available to the public. In other words, most recent deaths won't be reported. And that will make it harder to figure out who is owed life insurance money.
Why the change? The SSA says it has discovered it is prohibited from disclosing death records it receives through contacts with the states, according to the SSA website. But the Death Master File has been in existence since around 1980. SSA has offered no comment on why it had taken so many years to discover it was doing something wrong.
End Of Story….
Jack Swint-Publisher
West Virginia News
(304) 982-7024
E-Mail: WestVirginiaNews@gmail.com
Website: http://WVNewsOnline.com
Twitter: @WVNewsOnline
Links
Testimony Of Jonathan Agin
Changes In Record Keeping For The DMF
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