Scam: Opening Fraudulent Checking Accounts in Someone Else's Name

Question

I've recently been the victim of identity theft, where someone has used my information (including my Social Security, somehow) to open up a handful of fraudulent checking accounts. I have already gone through the necessary steps to hopefully stem this issue (FTC Identity Theft report, police report, credit freeze, changed passwords, etc.).

I was alerted to this fact a couple of different ways. First, I got several bank cards mailed to my home address. I also got one letter congratulating me on opening an account and which included the account information. Finally, another bank emailed me to tell me that my account email address had changed to one I don't recognize. Of course, I called to close each of these accounts as soon as they came in.

What I was wondering is how does this sort of scam work? So far, it seems like all the things that someone would need to maliciously use my name (i.e., the bank cards and account information) was sent directly to me. Unless someone planned on camping out at my mailbox every day to snatch my mail, which I would surely notice, this doesn't seem like a fruitful exercise.

Answer 1

Unless someone planned on camping out at my mailbox every day to snatch my mail, which I would surely notice, this doesn't seem like a fruitful exercise.

You'd be surprised, people actually do that. Sometimes there's collaboration from postal employees (that is criminal of course and a cause for termination).

But in addition, this scam may be used to quickly move money around from a nefarious source to a clean one through you. For example, someone deposits drug money and then wires it to some other account in someone else's name. That someone else - just got a gift from you, they know nothing about your dirty drug money. Or, someone cons someone into transferring money into "your" account that then gets forwarded to someone else again. Again, someone else is "innocent" and the criminal tracks end with you.

In these cases the accounts would be shortlived, preferably closed before you even notice or learn about them.

In your case you got lucky and was alerted by the various systems in place specifically to alert about these situations. It's always worth checking your credit reports regularly (creditors report your address there as well, so you may notice a new unfamiliar address even faster than you notice a new unfamiliar account). There are also similar reports for bank accounts without credit (example).