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The Resource Center Identity Theft & Protection | post

New Research Says There Are More Than 10,000 Identity Fraud Rings in the U.S.

by Joe Mason on

A new study on identity theft authored by San Diego-based ID Analytics came across my desk the other day, and some of the findings are both fascinating and alarming.

The study says there are more than 10,000 "identity fraud rings" operating in the U.S. It defines an identity fraud ring as a group of people actively collaborating to commit identity fraud.

"While many of these fraud rings are made up of two or more career criminals, surprisingly, others are family members or groups of friends," the report concludes. "The ring members may be either stealing victims' identities or improperly sharing and manipulating personal identifying information such as dates-of-birth (DOB) and Social Security numbers (SSNs) on applications for credit and services.

The researchers came to their conclusions by examining approximately 1.7 billion "identity risk events" including applications for credit cards, wireless phones, payday loans, utilities, and other financial services credit products. It found identity fraud rings attacking all three industries, with wireless carriers the major target.

The research concluded that:

  • The states with the highest numbers of fraud rings are Alabama, the Carolinas, Delaware, Georgia, Mississippi and Texas. The ZIP codes with the most fraud rings observed are areas around Washington DC; Tampa, Fla.; Greenville, Miss.; Macon, Ga.; Detroit; and Montgomery, Ala.
  • While many fraud rings operate in cities, a surprisingly high number were also found in rural areas of the country.
  •  A large number of families are working together in fraud rings, even using each other's SSNs and DOBs. However, rings made up of friends are more common, with the majority of fraud rings made up of members with different last names.

The study cites as an example of a fraud ring one uncovered in Florida. A family of five has been involved for more than three years. According to the findings "the family, with ages ranging from 24 to 37, had filed at least 130 fraudulent applications, using more than eight SSNs and 11 DOBs during that time period."

Other researchers and law enforcement experts have found that these rings, especially those located in the same geographic areas (Tampa, Florida, for example is a hot bed) often work in concert. They may trade stolen Social Security numbers or purloined personal information, and they will discuss successful methods and targets, or about the latest information on law enforcement anti-identity methods.

Stephen Coggeshell, the author of the study, talks about what he calls "identity manipulation," in which people alter their own actual personal information to mask their actual real identities. This is almost a subset of identity theft and is rampant today. I'll talk more about it in the future.