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The general idea is that an identity can have credit applied to it in many different ways. Loans would probably be pretty tough to exploit, since it's the bank's money you'd be stealing and they would take measures against that. The government, however, is much less efficient and just plain terrible at countering fraud. Medicare fraud, for example, is pretty huge right now. Of the $500,000,000,000 that government pays out annually, it's estimated 10% of that is fraud. Pretty insane stuff. Scammers will set up a medical equipment storefront (to collect checks... they are never open), signed off by a crooked, made up, or identity-stolen doctor. Then, they'll buy lists of information online (SSN + DOB + Medicare ID), and issue fraudulent charges to that person's Medicare account. Expensive things, like prosthetic arms and such. Medicare is required to reimburse the storefront the cost of the item within 60 days (it used to be 30 days, until Obamacare passed). The fraud detection is so bad at Medicare, that even when people actively report the fraudulent charges (imagine getting a Medicare invoice that says you've required 4 new arms this month), the crooks still get away. The thieves run through a few of their stolen identity lists, cash those checks, close up shop, open up a new shop down the block, and repeat. This is essentially a summary of what I saw on 60 minutes a month ago, so you should do some fact checking. I would also imagine a similar process would work for any government subsidized program, like welfare. |