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April 25, 2012

Identity Theft For the Purpose of Tax Refunds Fraud Soaring

By Tracey E. Schelmetic, TMCnet Contributor

While a majority of Americans – either willingly or unwillingly – put their personal information online, it has enabled a relatively new kind of kind of crime to skyrocket: the buying and selling of personal information for the purpose of committing large-scale fraud.

Police in Hillsborough County, Florida recently arrested a 29-year-old man who allegedly stole personal information from his employer, Tampa-based ProVest, to resell. The man, Joseph Burden, attempted to resell the names, birth dates and social security numbers of 33 individuals to an undercover sheriff's deputy. ProVest offers a number of services, including process servicing, loss mitigation and fraud detection related to mortgages.

The company quickly disowned the employee in a prepared statement for the press.

“Management at ProVest just became aware of the information theft allegations against an employee at ProVest,” said company president James Ward. “We are very concerned and committed to working closely with law enforcement authorities to learn all of the facts in this case. ProVest has placed the employee on leave. ProVest takes data security and privacy seriously; numerous precautions are and have been in place to safely guard consumer data,” he said.

According to police, Burden's alleged crime represents a different kind of identity theft: stealing personal information for the purpose of tax refund fraud. Criminals prepare fake tax refunds using the names, birth dates and social security numbers they steal, prepare bogus tax forms and receive a refund check in the mail.

Previously, scammers used the personal information of deceased Americans to carry off the scam, but the IRS has set up a new system to cross-check for social security numbers of those who have died. The scammers have had to shift their practice toward using information of the living.

Companies that collect a lot of personal data are often targets. Fraudsters plant employees in jobs that have access to large amounts of personal information, or they reach out to existing employees with promises of cash rewards, according to an article in Forbes this week.

The practice is becoming more widespread. IRS Deputy Commissioner for Services and Enforcement Steven T. Miller told the House Oversight and Government Reform Committee last week that, “The IRS has seen a significant increase in refund fraud schemes in general and schemes involving identity theft in particular,” Forbes reports. While the agency has stepped up efforts to detect fraud, the fraudsters become bolder, targeting banks, schools, healthcare facilities, credit monitoring services and other companies rich in personal information, particularly those that conduct credit checks on customers.

Edited by Jennifer Russell
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