Statistics on Social Security fraud might be difficult to come by. Some are classified as “improper payments” by the Social Security Administration (SSA), which covers anything from honest errors to purposeful fraud. During the 2020 fiscal year, the SSA believes that it made about $8.3 billion in incorrect payments.
Other types of Social Security fraud include identity theft utilizing stolen Social Security numbers and scams using fraudulent phone calls and emails appearing to be from the SSA. Every year, these scams cost the United States government and individual taxpayers millions, if not billions, of money.
- Every year, Americans lose millions, if not billions, of cash due to Social Security fraud.
- Collecting retirement or disability benefits to which a person is not entitled is an example of fraud.
- Stolen Social Security numbers are used in a variety of identity theft scams, including the filing of phony income tax returns in order to claim fraudulent refunds.
What Is Social Security Fraud?
Though best known for its monthly payments to retirees, the Social Security Administration (SSA) is also in charge of several other programs, including survivor benefits for widows, widowers, and dependents of eligible workers; Social Security Disability Insurance (SSDI) for people with disabilities; and Supplemental Security Income (SSI) for people with limited income and financial resources. Any of these programs is vulnerable to various sorts of fraud.
The following are on the SSA’s list of probable frauds:
- Making fraudulent claims on a claim One example is when a person files for Social Security benefits and gives false information.
- Keeping information or occurrences hidden. Failure to disclose facts that might influence a person’s eligibility is also considered fraud.
- A representative payee abused benefits. It is considered fraud if a family or acquaintance mishandles benefits for someone who is incapacitated.
- Purchasing or selling genuine or forged Social Security cards or numbers. People who steal Social Security numbers and use them to fraudulently get benefits are committing fraud.
- Employees of the Social Security Administration engaged in criminal activities. This might include exploiting insider information to get illicit advantages or assisting another person in obtaining illegal benefits.
- Impersonation of a Social Security Administration employee. Criminals that pose as SSA personnel and beg for money or personal information, including Social Security numbers, often prey on the elderly.
- Bribery of a Social Security Administration employee Employees of the Social Security Administration are not permitted to receive gifts or money in return for their services. If they do, they are committing fraud.
- Violation of ethical principles. Conduct guidelines apply to all SSA employees.
- Misrepresentation of workers’ compensation benefits. When a person receiving SSA benefits becomes eligible for workers’ compensation, the SSA must be notified. Failure to provide such information is deemed fraud.
- Misapplication of grant or contract funding. Mismanagement or waste in the handling of SSA contracts and awards.
- Misuse of Social Security numbers in order to perform terrorist activities It constitutes fraud if anybody with ties to terrorist groups or organizations assists this.
What Is the Cost of Social Security Fraud to U.S. Taxpayers?
People’s Social Security numbers are a popular target for identity thieves since they are often requested to identify oneself in financial transactions. Social Security numbers acquired via fraud or deception may be used to get credit cards or other loans, create bank accounts, and even apply for jobs.
Criminals also utilize fraudulently acquired Social Security numbers to make bogus tax filings and collect phony refunds. In 2021, the Internal Revenue Service (IRS) discovered $10 billion in tax fraud schemes.
The perpetrators of these frauds are often “large criminal enterprises with individuals at all stages of the scheme: those who steal the Social Security Numbers (SSN) and other personal identifying information, those who file false returns with the Internal Revenue Service (IRS), those who facilitate obtaining the refunds, and the masterminds who promote the schemes,” according to the United States Department of Justice.
Individual taxpayers often learn that their Social Security number has been stolen only after filing their own tax returns for the year and receiving notification from the IRS that there seems to be a problem. If they are entitled a real refund, they may still obtain it, but only after following the IRS’s instructions. Finally, taxpayers in the United States as a whole must foot the tab for false refunds.
Scammers may not only impersonate Social Security officials, but they can also “spoof” your Caller ID so that the call looks to be coming from a valid Social Security phone number.
Social Security Scams Against Consumers
Individual customers might potentially be victims of Social Security fraud. Imposter scams are particularly popular, in which a caller (either a real person or a robotic voice) claims to be from the Social Security Administration. The objective is often to gain the victim’s Social Security number and other personal information in order to commit identity theft. In certain circumstances, the caller may demand money from the victim, threatening to withhold Social Security payments if they do not cooperate.
Similar impostor frauds take place by email, text messaging, or physical mail. The Federal Trade Commission (FTC) received 17,995 allegations of imposter frauds involving Social Security through the second quarter of 2022, with a total loss of almost $46 million. Untold numbers of scam victims, of course, never submit complaints, frequently out of humiliation.
How to Report Social Security Fraud
If you are a victim of Social Security fraud or think you have observed it, call the SSA Office of the Inspector General (OIG) at 1-800-269-0271 or make a complaint online at the OIG website.
You may also report identity theft at IdentityTheft.gov, an FTC website that assists customers in reporting ID theft and developing a recovery plan.
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