What Is Social Security Fraud?

What Is Social Security Fraud?

Social Security fraud is fraud committed against the SSA, either directly or indirectly through the misuse of benefits or the theft of another person's SSN or account. Fraudsters can include individuals, former SSA employees, claimant representatives or health care providers.

Be aware: Social Security fraud is a federal crime that carries penalties of up to five years in prison and criminal fines of up to $250,000, as well as potential civil monetary penalties.

Types of Social Security Fraud

Social Security fraud encompasses many types of criminal activity, from stealing benefits to identity theft. Here's a short list of some of the common types of Social Security fraud.

Benefits Fraud

Social Security benefits fraud occurs when someone intentionally lies or conceals information in order to collect Social Security benefits. For example, someone might fake an illness to make themselves eligible for Social Security Disability Insurance (SSDI). They might conceal sources of income to qualify for Supplemental Security Insurance (SSI) and/or hide the fact that they're working (and therefore don't qualify as disabled).

Examples of benefits-related fraud include:

• Making false statements on claims.
• Filing claims under someone else's SSN.
• Concealing facts or events that affect eligibility for benefits.
• Continuing to collect benefits after a beneficiary's death by failing to notify SSA that the person is deceased or hiding their death to continue receiving benefits.

Misusing Someone Else's Benefits

A representative payee who's been appointed to accept Social Security payments for someone who's incapacitated or otherwise unable to manage their financial affairs is obligated to use those funds for the beneficiary. It's fraud if a representative payee steals the money, mismanages the funds or uses them for their own benefit.

Buying or Selling Social Security Information

It's illegal to buy or sell Social Security information, including SSNs or account data. The SSA also notes that it's illegal to buy or sell Social Security cards, or to alter them for use as fraudulent identification, for example to fake eligibility for employment.

Impersonating a Social Security Employee

Scammers may pretend to work for the SSA as a pretense for reaching out. They may try to obtain SSNs or other personal identifying information to be used to commit identity theft. Or, they may threaten or demand payment using common tactics like these:

• Selling you services the SSA provides for free, such as replacing Social Security cards.
• Scamming you into paying for fake services like activating extra benefits or contributing toward a fund to help save Social Security.
• Reporting problems with your account that require payment to resolve.

Working Under Someone Else's SSN

Employment identity theft occurs when someone steals your SSN and uses it to get a job or collect wages. Fraudulent employment records can show up in your Social Security account and cause confusion over your benefits eligibility.

Using an SSN for Identity Theft

Stolen SSNs are commonly used to commit identity theft. Scammers may purchase this information on the dark web or obtain it themselves via phishing scams, data breaches or theft of discarded documents. They then use stolen credentials to apply for Social Security or other government benefits, commit employment identity theft, file fraudulent tax returns, or take out loans or credit.

Committing Fraud as an Insider

SSA managers and employees may use their access to receive payments or benefits, or help someone else do so. It's also fraud for employees to accept bribes, or for outsiders to pay bribes to administration employees.

How to Know if Someone Is Using Your Social Security Number Fraudulently

Here are nine signs your SSN is being misused:

• Your online Social Security benefits report shows employment records you don't recognize.
• Someone else changed your address or other information in your Social Security account.
• You have issues claiming government benefits you know you're entitled to (especially if you're told it's because your number is already being used to claim them).
• You receive notifications from the SSA or IRS that don't make sense. For example, you receive a letter claiming to be from the SSA that threatens to suspend your Social Security account or number.
• Your tax return can't be e-filed because someone has already filed one using your SSN.
• Your SSN turns up in a dark web scan.
• Your credit report shows unfamiliar accounts or soft inquiries.
• You get rejected for loans or credit cards you think your credit should qualify you for.
• You get mail, particularly statements or past-due notices, for accounts you didn't open—or calls from debt collectors for accounts not belonging to you.

How to Report Social Security Fraud

If you find evidence of Social Security fraud, report it to the appropriate agency. Because Social Security fraud can take so many different forms, you may need to take multiple steps. Here's a simple roadmap:

1. Gather Relevant Information

Note as much information as you can, including names, dates and details of events. If you have records of fraudulent payments, false statements, solicitations or bribes or other documents, be prepared to provide them. The SSA offers these recommendations for anyone who's been targeted by scammers:

• Websites or social media: Take a screenshot and make note of the web address or social media link you used to find it.
• Emails and texts: Save the entire message with links.
• Mail: Keep all elements of the communication, including inserts and the outside envelope.
• Phone calls: Note the caller ID number. Save any callback information you receive, including company names and numbers.

2. Report the Fraud

In general, Social Security fraud should be reported to the SSA's Office of the Inspector General. However, different types of related fraud or identity theft can be reported to other agencies and to credit bureaus. Here's a quick chart showing different examples of Social Security-related fraud and where to report them.

3. If You're a Victim of Identity Theft, Secure Your Identity

If you suspect identity theft or fraud, you have the right to place a fraud alert or security freeze on your credit reports with each of the three major credit bureaus (Experian, TransUnion and Equifax). A fraud alert instructs creditors to verify your identity before processing new credit applications in your name. Another option is a security freeze, which limits access to your report, even when you request it be checked.

If you have a Social Security account online, you can use it to block electronic access. If any of your bank or credit accounts were compromised, contact your financial institutions to let them know. If you lost money as a result of the fraud, you may want to file a report with your local law enforcement.

Tip: If you've provided financial or personal information, or you sent money to a scammer, the Federal Trade Commission has a hub offering advice on what to do next.

How to Protect Yourself From Social Security Fraud

• Create an online Social Security account. This allows you to more easily track your records and identify suspicious activity.
• Consider blocks for your Social Security account. An eServices block done through your My Social Security account prevents anyone, even you, from seeing or changing your information online until it's removed. A direct deposit fraud prevention block keeps anyone from enrolling your Social Security account in direct deposit, or from changing direct deposit details or addresses.
• Don't answer unexpected calls from Social Security. Social Security won't call you about issues related to your Social Security account or benefits; instead, you'll receive a letter in the mail. Additionally, SSA employees will never threaten, ask for credit, debit or gift card numbers, or demand an immediate payment.
• Don't respond on social media. Legitimate government agencies and banks will not contact you via social media.
• Don't carry your Social Security card in your wallet. Unless you need it for a specific purpose, keep it at home in a safe or in a safe deposit box at your bank.
• Be truthful and candid with Social Security. It's obvious, but avoid lying or concealing information when dealing with the SSA: Intentionally misleading the SSA is a felony. However, even honest mistakes or neglecting to provide key information can cause complications, so handle Social Security information with care.
• Watch out for certain emails, texts or calls. Beware of accounts or people posing as government agencies or financial institutions that ask for your SSN or other personal data. Don't click on links or give personal information or payment from an unsolicited contact. When in doubt, stop and look up the organization's number online, then call them directly to verify the issue.
• Regularly check your financial accounts and credit reports. Keep an eye out for any suspicious transactions or accounts that may be the result of identity theft.
• Familiarize yourself with common financial scam red flags. This includes pressure to act immediately, payment requests over the phone, demands of secrecy and threats of legal action or account seizure. Scammers often ask for payment methods that are hard to track or reverse, such as gift cards, wire transfers, prepaid debit cards or cryptocurrency.
• Don't fall for spoofing. Scammers can mask their phone numbers to look like a call is coming from a legitimate government agency or your bank. Decline calls you're not expecting and proactively call back if you think a call is legitimate. Some scammers also use the names of real SSA employees or send official-looking documents, so be skeptical.
• Shred papers you no longer need that contain personal information. This is especially important if they have your SSN.

Frequently Asked Questions

The Bottom Line

Social Security fraud can take many forms, all of which are frustrating and potentially costly for victims. If you've been a victim of Social Security fraud—or you suspect fraud—do your best to document your experience and report the fraud to the appropriate agencies. In the meantime, consider signing up for free credit monitoring to help you keep tabs on new accounts opened up in your name and act quickly if you see anything suspicious.