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Study: Roughly 1 in 15 adults lie about SSNs, DOBs on credit applications

Roughly 1 in 15 U.S. adults are intentionally committing fraud by lying about their Social Security number, date of birth, or other personal information on credit applications, claims a study released today by consulting firm ID Analytics. 

Eight million people are using two or more Social Security numbers, 16 million have used multiple dates of birth, and another 10 million have intentionally co-mingled their personal information with a spouse's information, the report says.

Fraudsters range from full-time, professional ID thieves, to applicants simply trying to evade creditors' background checks, to citizens trying to trick government agencies into giving them benefits they're not entitled to.

In all, 45 million Americans entered incorrect information on applications for cell phone service, auto loans, credit cards, or other similar transaction, ID Analytics says. While some of those mistakes could be the result of applicants simply being inconsistent with their names, roughly one-third to one-half of those involve deliberate attempts to escape a bad credit history or otherwise evade detection of a negative event in their past, said Stephen Coggeshall, chief technology officer for ID Analytics. 

With 267 million adults studied, roughly 8 percent are actively committing fraud. He estimated. 

"This is a fabulous list of obvious criminals," Coggeshall said. 

A partial version of that list was provided to msnbc. It includes:

*A woman named Angela, from Brooklyn, who has used 76 SSNs, 14 first names, 10 last names, 14 dates of birth, and 31 addresses during recent credit applications. She has even applied as both a man and a woman.

*A man named Thomas from Philadelphia, who has used 165 SSNs, 44 dates of birth, and 40 addresses. 

*A man named Michael, from Manhattan, who has used 100 SSNs, and 96 addresses.

"Most of these attempts are caught by creditors, but enough of them get through that people keep trying it," Coggeshall said. 

ID Analytics is a data collection firm that specializes in helping companies separate imposters from honest consumers when they apply for credit. Its client list is long, and includes many major financial firms as well as the Social Security Administration. Over the past decade, it has amassed files on virtually every American who is active in the financial system. It now tracks 290 million Social Security numbers and nearly 300 million people.

The firm has access to 1.4 billion credit applications filed with clients in recent years, and studied that data to look for fraud patterns. A consistent bag of tricks used by fraudsters emerged — those who use multiple Social Security numbers often simply increment the last digit by 1, or the last two digits by 10, Coggeshall said.  Those who change their date of birth will add a month, or a year.  Looking for such patterns allowed the firm to remove honest typographical errors from its findings, Coggeshall said. 

ID Analytics sells its research to banks and other creditors to help them fight fraud; its massive database of credit event records has been used to assert startling findings before. Last year, the company said that 40 million Social Security numbers have been attached to more than one name, and 20 million people use more than one Social Security number.

Many of the mistakes found in that study were not fraud, but merely the result of innocent typographic errors — a clerk at a store reversing two digits when typing in a credit card application, for example.  The study released today began as an attempt to separate the mistakes from the fraud, Coggeshall said.  He believes the algorithms designed for this test kept honest mistakes out of his final tally. A separate algorithm accounts for nicknames like Bob, Bobby, and Robert — those were removed from the tally, too.

The 45 million deliberate compromised identities that remained surprised even Coggeshall.

"Deliberate identity manipulation is far more prevalent than we imagined," he said. "I think there are broader social statements implications associated with this."  Some elements of society may not see lying about a name or a number on a credit application as a crime, or as morally wrong, he said. 

Lying on an application often is a crime — but why aren't law enforcement agencies using ID Analytics' research to round up thousands of repeat identity thieves and throw them in jail?

"It is not our business or mission to provide data directly to law enforcement...but we are always open to working with law enforcement and have in the past," Coggeshall said, declining to offer details.

The study sheds light on why some credit granters seem to be overly paranoid, suspicious, or demanding, when consumers apply for credit. 

"People like to beat up credit granters, but they are doing their best to keep costs as low as possible," he said.

The results should equally anger credit granters and honest consumers.

"People are harmed in two ways by this. A fraudster can inadvertently use your information to obtain credit.  But the second way is, overall people have to pay more through increased fees and costs for services when fraudsters are successful," Coggeshall said.

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