Posted: Guest|January 7th, 2019

Identity Theft

How Thieves Capitalize on Natural Disasters to Steal Identities

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Written by Guest
Our goal here at BestCompany.com is to provide you with the honest, reliable information you need to find companies you can trust.
Guest Post by Kayla Matthews
 
People affected by natural disasters are primarily concerned with getting their lives back on track. That's an understandable goal. Unfortunately, scammers also latch onto that need when attempting to steal identities and commit related crimes.
 
This phenomenon is known as disaster fraud, and it's something people must be aware of, especially as the number of natural disasters and their severity levels rise.
 

What is disaster fraud and how does it happen?

Disaster fraud is any attempt to trick victims of events such as hurricanes, floods, or tornadoes. It has become such a prominent issue that the Federal Emergency Management Agency (FEMA) features a dedicated page warning people how to recognize disaster fraud.
 
The agency even has subpages for recent disasters that profile some of the known rumors associated with them. Many of the identity theft-related issues start when fraudsters pose as government officials and assert they can help victims apply for relief funding in exchange for personal information.
 
All genuine FEMA employees carry badges. It's not sufficient if a person shows up on the doorstep wearing a hat or uniform and claims to be from the agency or does the same during a phone call. You should always apply for FEMA aid via official channels, such as the organization's website, instead of giving information to anyone who requests it and could be impersonating a representative.
 
Other scams known to FEMA include people getting fake notices about eligibility for disaster relief in the mail. They are told they can only claim the "benefits" by providing personal details and sometimes money.
 
The U.S. Department of Justice also established the National Center for Disaster Fraud, allowing people to make reports about suspicious activities. It lists examples of associated criminal activities that could constitute disaster fraud, aiming to raise awareness.
 

Past data breaches may make disaster fraud worse

Although some disaster fraudsters who steal identities are successful in getting the details they need when victims fall for their tricks, other factors at play could make that data accessible. For example, the 2017 Equifax data breach, which exposed information of up to 143 million Americans, likely gave many identity theft scammers the valuable data they needed.
 
Up to 200,000 applications filed for FEMA assistance after last year's wildfires in California may have been fraudulent, according to reports. Many disaster victims ultimately discovered they'd had their identities stolen when they legitimately tried to make claims for help and were told that such paperwork was already filed on their behalf.
 
In addition, some people who didn't need aid got letters confirming their successful applications for assistance. Sometimes, FEMA inspectors — who get dispatched to the homes of disaster victims and leave notes for them about their claims — suspect that most of the claims are fraudulent. However, they still have to distribute that paperwork at the residences.
 
One FEMA inspector who experienced the aftermath of the 2017 California wildfires believed only 5 percent of the notices he'd distributed within a week were for genuine claims. Disaster fraud is not new, but data breaches like the Equifax one potentially mean FEMA inspectors could waste more time dealing with fake claims spurred by identity theft.
 
People in the risk management and insurance sectors anticipate wildfire seasons will get longer, meaning FEMA officials and others assisting with disaster relief may find themselves with less time and resources to help the people who actually need assistance. Scammers could exacerbate that problem. They risk spending up to 10 years in prison and receiving fines of as much as $250,000 for this identity theft, but many aren't deterred.
 

The funds distributed in fraud cases add up

When people fool the government with stolen identities or other misleading information, those funds get diverted from the people who need them most. Statistics from New Jersey found that fraud cases represented more than $7 million in funds since 2014, with 116 individuals collectively behind those incidents.
 
Some of those making headlines in 2018 include people who claimed vacation homes were their primary residences after Hurricane Sandy. Those incidents didn't relate to identity fraud, but they illustrate the various ways people can make funds go to the wrong places due to successful fraud.
 
Often, the fraud-driven dollars add up for unscrupulous subcontractors sho are inadequately supervised, too. Going back to last year's wildfires in California, multiple allegations suggest that the companies tasked with clearing away debris got paid by the pound and intentionally over-excavated the affected areas.
 
In those instances, the U.S. Army Corps members dispatched to the area were also spotlighted for improper conduct after reports say they left the wildfire-stricken places without responding to the nearly 1,000 complaints homeowners filed.
 
It's easier than many people think for scammers to use stolen information to make false repair claims. They only need to find compromised information from a person living in a recently affected place. After using those details for claims, they could potentially get tens of thousands of dollars or more in relief money.
 

Scammers are perpetually creative

One prevailing reality about those who scam others is that they never stop looking for ways to fool unsuspecting people. Even disaster victims are, sadly, not immune to even more trauma at the hands of criminals.
 
Kayla Matthews, a tech and security journalist, has written articles for sites including WIRED, Information Age, Security Boulevard, and the National Cyber Security Alliance. To see more of her work, follow her on Twitter @KaylaEMatthews or check out her tech blog, Productivity Bytes.

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