The Hidden Threat: Protecting Yourself from Tax and Medical Identity Theft

Introduction: When most people think of identity theft, they imagine stolen credit cards and drained bank accounts—financial identity theft. However, a more insidious and difficult-to-fix problem is **non-financial identity theft**, specifically targeting your tax identity and medical records. These crimes can impact your life for years without you even knowing they've happened.

Part 1: Tax Identity Theft

This occurs when a criminal uses your Social Security number (SSN) to file a fraudulent tax return and claim your refund before you do. The first time you realize you're a victim is usually when the IRS rejects your legitimate e-filed return.

How It Happens

Tax ID theft primarily happens through data breaches. Criminals acquire your SSN and date of birth, which is often enough to file a return electronically. They change the direct deposit information to their own account, and by the time you file, the money is gone.

How to Protect Yourself

• File Early: The most effective defense is to submit your tax return as soon as possible in January. It's a race between you and the thief.
• Use the IRS ID PIN: The IRS offers an Identity Protection PIN (IP PIN) to certain victims of identity theft. If you've been a victim, you can request this pin, which must be included on your return to be accepted.
• Never Respond to Phishing: The IRS will never contact you via email, text, or social media to demand immediate payment or sensitive information. Any such contact is a scam.

Part 2: Medical Identity Theft

This is arguably the most dangerous form of non-financial theft. It occurs when a criminal uses your personal information (like your name, insurance ID, or SSN) to obtain medical services, prescription drugs, or file false claims with your insurance provider.

The Double Impact

Medical identity theft has two catastrophic consequences:

1. **Financial Ruin:** You receive bills for services you never received, leading to collection calls, ruined credit, and the exhaustion of your insurance benefits.
2. **Medical Misinformation:** The thief's medical procedures, diagnoses, and lab results are merged into your permanent health record. This "mixed medical record" can lead to dangerous misdiagnosis and incorrect treatment in an emergency.

How to Protect Yourself

• Shred Documents: Always shred Explanation of Benefits (EOB) forms, bills, and prescription receipts before discarding them.
• Review Your EOBs: Scrutinize every EOB or benefits statement you receive from your insurer. Look for services, doctors, or dates that you do not recognize.
• Check Your Medical History: Request a copy of your full medical record from your primary care physician and insurance provider annually to check for foreign entries.
• **Guard Your ID Cards:** Treat your health insurance ID card like a credit card. Do not leave it in your car or share photos of it online.

Conclusion

While a credit freeze protects you from financial ID theft, **proactive monitoring and vigilance** are the only tools against tax and medical fraud. These hidden threats exploit the most sensitive data we possess, and securing them requires dedication to checking your accounts and reviewing every statement you receive. Don't wait until the IRS rejects your return or a hospital tries to treat you based on a thief's history.