Friendly Fraud Exploits Security Loopholes, Causes Medical Identity Theft

Friendly Fraud Exploits Security Loopholes, Causes Medical Identity Theft

When someone hands their credit or debit card to a family member or friend, they might become a victim of identity theft, which could cost them financially. But giving someone else their health insurance information might cost their life. As their health records are tied to their personal identifying information, consumers who have had their identity stolen or misrepresented might be at risk for having wrong information marked on their medical reports, putting them in danger for receiving the wrong medication or health care advice. 

One of the biggest reasons for medical identity theft is when consumers allow a friend or relative to obtain their insurance identification card, FierceHealthPayer reported.

This type of identity theft is defined as stealing a patient's personal information to receive health care services or even to buy medication, according to the U.S. Department of Health and Human Services

In 2013, more than 1.8 million people became victims of medical identity theft, according to a survey by Ponemon Institute. Of these incidents, more than 30 percent of medical identity theft cases were due to consumers giving their health insurance cards to others.

Once this information leaves patients' hands, it could be shared among cybercrimiinals who could sell this data in underground markets. 

"There are so many opportunities out there to defraud people," Dennis Jay, executive director of the Coalition Against Insurance Fraud told United Credit Service, Inc. "You're dealing with populations that are new to insurance and don't understand the dangers of selling a Medicaid number or sharing a health ID number."

Medical identity theft is becoming a major issue as the insurance industry may not follow proper security procedures to guard consumer information against data breaches and other security incidents.

"The insurance industry could do a better job to make sure the credential is state of the art, that it isn't just a piece of plastic but has information about you or could even in fact be a biometric or even a retina or facial scan," said Larry Ponemon, chairman and founder of the Ponemon Institute, according to Fortune.

Tips to Avoid Medical Identity Theft
To protect themselves from being identity theft victims, Jennifer Trussell, who investigates medical identity theft for the HHS' Office of Inspector General, warned consumers to not spread health care information on social media, The Washington Post reported

Jim Quiggle, director of communications for the Coalition Against Insurance Fraud, also suggested that patients give their medical information only to health care professionals who need this data. 

Brett Montgomery is a fraud operations manager at CyberScout.

About Brett Montgomery   |     |  

Brett Montgomery is a fraud operations manager at CyberSecurity's Fraud Resolution Center.