Identity theft 101: what is insurance fraud?

September 8, 1:13 PMIdentity Theft ExaminerJoe Campana

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      Insurance fraud can drive up rates to consumers

Identity theft involving insurance fraud occurs when an identity thief obtains insurance by using personally identifiable information belonging to an identity theft victim. Identity thieves are most likely to take out health, automobile, homeowners and renters insurance depending on their purpose of using an alias.

For example, if the identity thief has committed employment fraud, the thief may elect employer-sponsored health insurance, disability or life insurance under their employment alias. The use of health insurance for doctor, hospital and clinical visits, as well as other covered medical benefits, will also result in medical identity theft.   

Identity thieves, for example, uninsured illegal immigrants who are using an alias, may obtain treatment in an emergency room or clinic under the current health care program. They generally provide an alias and the social security number of the victim as part of the medical admissions questionnaire. Charges may be incurred under the identity theft victim's existing health insurance, Medicare or Medicaid coverage. This is a significant problem that needs to be address in health care reform. Additionally, treatment of the identity thief is likely to become part of the victim's medical records. 

An identity thief that obtains a home through a new mortgage (financial fraud) or rents housing under an alias might purchase homeowners or renters insurance under the same alias. Once in the home, the thief needs utility services. New account fraud  is committed by opening utility accounts under the alias.

Auto insurance would be purchased by an identity thief after he or she obtained a driver’s license (government identification fraud) and subsequently obtained an automobile that he or she needed to insure.

Identity theft can affect many different facets of life. It can create a complicated situation for the identity theft victim to untangle.