Medical Identity Theft: What it is and How to Protect Yourself
While it's the fastest-growing type of identity theft, a new Nationwide Insurance survey reveals few people know what medical identity theft is or how devastating it can be to your credit and your health.
The national telephone survey commissioned by Nationwide Insurance was conducted by Harris Interactive in February among 2,001 adults with health insurance. It found only 1 in 6 (15%) of insured adults say they are familiar with medical identity theft. Of that 15% only one in three (38 percent) could correctly define "medical identity."
"A stolen medical identity has a $50 street value -- whereas a stolen social security number, on the other hand, only sells for $1*," said Kirk Herath, Nationwide Chief Privacy Officer. "However, while most people are very careful with their social security number to protect their credit and personal information, they tend to be less careful when it comes to their medical information."
What is "Medical Identify Theft?"
Medical ID theft occurs when one person steals another's medical information to obtain or pay for health care treatment. It's a crime that can have a serious impact on your personal, financial and medical well being.
According to the World Privacy Foundation, medical identity theft has affected 1.5 million Americans at a cost of more than $30 billion.
If someone steals your medical information they illegally can use your health care insurance to obtain medical care, buy prescription drugs or submit false insurance claims in your name, all of which can lead to devastating financial results or potentially hazardous changes to your medical records.
The three most common ways your medical identity could be compromised are:
-- Financial medical identity theft -- Someone is getting medical help using your name and/or other information.
-- Criminal medical identity theft -- You are being held responsible for the actions of another's criminal behavior.
-- Government benefit fraud -- Your medical benefits are being used by another person.
Devastating Consequences, Difficult Recovery
According to a Nationwide Insurance survey, more than half (56%) of insured adults said it's likely that their credit card or credit card number would be stolen, while only one-third (32%) say they expect their medical identification to be stolen.
About one in five (22%) believe the most likely consequence would be that their health insurance could be cancelled, when in reality hazardous changes could be made to their medical records compromising their health.
"These are warning signs that should not be ignored," Herath said. "The cost and time associated with cleaning up a medical account is sizeable."
The personal expense of resolving a medical identity theft is about $20,000, according to actual victims. The same victims also said they had spent four to six months resolving the theft**.
More than half of the study participants underestimated how long it would take to restore their medical identity. Nineteen percent or about 1 in 5 said it would take less than two weeks. And more than half underestimated or didn't know how much it would cost.
When it comes to taking proactive measures to review their medical records for errors, 75 percent or 3 of 4 study participants "trust" that their medical records are correct.
"Blind faith in a medical record is risky behavior," Herath said. "Nationwide Insurance recommends being as knowledgeable about your medical records as you are about your financial reports."
Tips to protect your Medical Identity
Here are a few things you can do to safeguard your medical identity:
-- Closely monitor any "Explanation of Benefits" sent by health insurers
-- Pro-actively request a listing of benefits from your health insurers
-- Request a copy of current medical files from each health care provider
-- If you are victim, file a police report
-- Correct erroneous and false information in your file
-- Keep an eye on your credit report
-- Request an accounting of disclosures
Merchant personal data may have been stolen from Global Payments
Hackers might have stolen the personal information of individuals who applied for a merchant account with card payment processor Global Payments.
"We have recently learned of potential unauthorized access to servers containing personal information from a subset of merchant applicants," Paul Garcia, Global Payments' chairman and CEO, said during a conference call with shareholders on Tuesday.
Affected individuals will be offered free credit monitoring services and identity protection insurance of $1 million. The three U.S. major credit reporting agencies have also been advised about the incident, Garcia said.
Garcia declined to share an exact number of individuals potentially affected by the unauthorized access to servers that contained merchant data, citing an ongoing process of analyzing that information.
IRS Tax Return Identity Theft Hotline
If you think someone used your identity to file a fraudulent tax return and snatch your refund, call the new Tax Return Identity Theft Hotline.
Launched today by the IRS criminal investigations division and the U.S. Attorney's Office, the number is 412-395-4973.
Last summer, scam artists set up shop in Erie and began offering people help tapping into a fictitious federal stimulus program, then stole their identities, IRS criminal investigations spokesman Andrew Hromoko said. If anything similar happens this year, calls to the hotline could help the agency to identify the scheme quickly.
Callers who leave a message will receive a return call from a special agent within 24 to 48 hours.
A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should also contact the IRS Identity Protection Specialized Unit at 800-908-4490 so the agency can secure their tax account.
Hackers more aggressive in attacking bank accounts
A survey of large financial institutions shows they faced more attacks by hackers to take over customer banking accounts last year than in the two previous years, and about a third of these attacks succeeded.
The total number of attacks to try and break in and transfer money out of hacked customer accounts was up to 314 over the course of 2011, according to the Financial Services Information Sharing and Analysis Center (FS-ISAC), which released findings of its survey of 95 financial institutions and five service providers. That's an increase from 87 attacks against bank accounts in 2009 and 239 in 2010.
FS-ISAC is the group that coordinates on security issues with the Department of Homeland Security. The survey was conducted by the American Bankers Association.
The actual dollar losses taken by the financial institutions last year was $777,064, down from a high of $3.12 million in 2010. Dollar loss for customers was $489,672 in 2011, as compared with $1.16 million in 2010.