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Equifax data breach may have increased fraudulent FEMA claims


Hurricane Harvey
4.7
million Americans applied for disaster relief in
2017.

AP

  • Multiple hurricanes and wildfires made 2017 the most
    expensive year on record for disasters in the US.
  • 4.7 million Americans filed for disaster aid through
    FEMA, but about 200,000 applications are suspected to be
    fraudulent. 
  • The massive
    Equifax data breach
    may be partly to blame for the uptick
    in fraudulent FEMA applications.

 

2017 was an especially costly year for the US government.

Multiple
hurricanes
tore through parts of the South and
wildfires
ravaged California, making it the most expensive year on
record for disasters
, according to the National Centers for
Environmental Information.

The US was impacted by 16 separate billion-dollar disasters in
2017, totaling $306 billion in economic losses.

As a result of the wildfires, hurricanes, and storms, millions of
Americans were displaced and forced to rely on federal disaster
aid.
According to the Economist
, 4.7 million FEMA applications
were filed in 2017 — a tenfold increase from 2016.

But David Passey, a spokesperson for FEMA, told the Economist
that more than 200,000 of those applications — about 4.25% of all
claims filed in 2017 — may be fraudulent.

The massive Equifax
data breach
 may be partly to blame for the rise in
suspicious applications.

In September 2017, Equifax, one of the three credit reporting
agencies in the US, announced it was compromised between mid-May
and July, potentially exposing
Social Security numbers
, credit card numbers, and other
personal information for up to 143 million Americans.


Hurricane Harvey FEMA aid
Unfortunately, large-scale
data breaches aren’t the only opportunity for criminals to steal
your information.

Joe Raedle/Getty
Images



Disaster fraud
isn’t anything new, but the timing of the
Equifax breach may have made it easier for fraudsters to get
their hands on personal data and file fraudulent FEMA
applications — a case of sophisticated identity theft.

“To swindle payments from their rightful recipients, criminals
had to match breached private information to addresses within
federal disaster zones,” the Economist reported.

FEMA can award up to $30,000 in emergency aid per household, but
most payments are much smaller.

Some victims of the disasters found out they had been defrauded
after receiving letters from FEMA confirming benefits they hadn’t
applied for. The Economist reported that one wildfire victim said
she found out when she requested aid and learned “someone had
already applied for money using her name, address, and Social
Security number.”

But large-scale data breaches like the Equifax leak aren’t the
only opportunity for criminals to steal your information. In
2016, 4.2 billion personal
records
 were stolen. If someone wants your
data, it’s probably already
out there
. The vast majority of identity theft victims — 86%
in 2014 — have problems with a current account, such as a credit
card or bank account, according to BJS data

In December, the FBI set up a task force to investigate fraud
claims related to FEMA applications. FEMA has notified applicants
of additional security measures put in place to prevent fraud.

Anyone caught trying to make a fraudulent claim
faces up to 30 years in prison
and a $250,000 fine if
convicted.

How to prevent disaster relief fraud

If you are a victim of a disaster and are planning to apply for
FEMA assistance, here are a few things to keep in
mind
:

  • If you apply
    online
    and receive a verification error, call FEMA directly
    for explanation.
  • If you haven’t applied, don’t give your personal information
    to anyone claiming they are verifying your application from FEMA.
  • Don’t trust anyone who comes to your home for an inspection
    without a FEMA badge or someone who asks for money to complete an
    inspection or application.

If you suspect you have been defrauded, contact the Department of Homeland Security
Office of Inspector General
, FEMA’s Office of the Chief
Security Officer tip line
, the National Center for
Disaster Fraud Hotline
, or the Federal Trade
Commission
.


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