We very often give official agencies, especially those run by the government, a great deal of confidence in their accuracy. In actuality, however, big agencies have so much information to manage that they often make more mistakes than your neighborhood Mom and Pop shop. In fact, these mistakes can have a devastating impact on individuals’ finances and credit.
This seems to be the case with the agency in charge of U.S. Social Security–the Social Security Administration (SSA)–as a recent report has revealed thousands of people each year are mistakenly reported as deceased in its system. While this may not seem like a big deal, it can result in credit report errors and financial issues that could make life extremely difficult for those affected.
Social Security Mistakenly Reports Thousands Dead Each Year
A recent report from the Office of the Inspector General (OIG), which is a watchdog agency created to ensure SSA programs run efficiently and economically, found that the administration mistakenly enters roughly 14,000 living individuals into its Death Master File (a list with Social Security numbers, death dates, birth dates, names, zip codes and last-known residences) each year.
This is equal to an estimated 1 false death out of 200 actual deaths–or 38 mistakes a day.
Though the errors are occurring online, they can have a real impact on the people incorrectly listed. As noted in a recent evaluation of the database by the OIG, “Erroneous death entries can lead to benefit termination, cause severe financial hardship and distress to affected individuals, and result in the publication of living individuals’ [personal identifying information] in the [Death Master File].”
This was the case with Laura Brooks, a Spotsylvania, Va. resident who as reported by CNNMoney.com, was declared dead after a funeral director had mistyped a Social Security number when submitting a death notice to the agency.
Shortly after the mistake was made, she stopped receiving her disability checks, which resulted in her missing payments for rent and student loans. Her bank account was also closed because representatives had been informed she was deceased. On permanent disability due to severe depressive disorder, her world was turned upside down.
What’s alarming is that the SSA is not the only agency making these kind of mistakes. In July, a woman was declared dead by her bank and suffered from ruined credit and financial woes as well.
Wrenella Pierre of Oviedo, Fla. recently sued Chase Bank after it declared her deceased then went on to notify credit bureaus of the incorrect status. As a result of their mistake, she started having credit problems since no one is going to issue a credit card or loan to some who isn’t alive.
In both cases, the mistakes were likely avoidable, but unfortunately, out of the victims’ hands. So how does one recover from an often unavoidable but life-altering mistake?
Recovering Credit After Mistaken Death
Just as bouncing back from identity theft can take time, money and a great deal of patience, individuals who have been victims of mistaken death often have a long road ahead of them in getting their lives back on track.
In Brooks’ case, she wasn’t allowed to reopen her bank account until she was able to prove she was actually alive. She had to go to the Social Security office and submit pay stubs she received from a program that helps people on disability get back to work.
Even with her proof, it took the SSA two months to finally change her status from deceased to living.
Her story and others like it leave many wondering what they would do if a mistaken death entry were to happen to them. Here are some tips to consider if you discover you are a victim:
1. Find out who made the incorrect entry: Whether it’s your local bank or the Social Security Administration, it’s important to track down who has reported you as deceased. Ask the source who said you were dead where they received their information and then work backwards. Also, you can get a copy of your death certificate from the county clerk’s or recorder’s office where the death was reported.
2. Amend your death certificate: If you haven’t already received a copy of your death certificate, you’ll want to get one so you can then fill out a form to amend it. The person who has reported you dead will usually need to amend the certificate as well.
3. Make sure death is corrected with source: If you’re listed in the SSA Death Master File, you’ll need to request for your name and information to be removed. As seen in Brooks’ case, the process could get complicated, so prepare to bring in utility bills, paycheck stubs or other identifying information. Be similarly prepared with any business or organization that is behind reporting your death.
4. Contact banks, credit bureaus, etc.: After you’ve corrected the mistake with the source, now you need to contact your banks, the three major credit bureaus, credit card companies, lenders and anyone else who can make decisions for your financial future to let them know you’re still alive.
Again, be prepared to provide ID of some sort and even expect that they may want to see you in person for additional proof. If you can, try to get the source of the death report to write letters to these businesses on your behalf for proof.
Unfortunately, unlike identity theft, it’s next to impossible to prevent mistaken death since it is usually the result of someone else’s error. However, you could check your free annual credit report or sign up for a credit monitoring service that alerts you to any changes on your reports. Of course, this won’t stop mistaken death from occurring, but it could at least help you catch the problem right away and correct the mistake before it impacts you too severely.
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I was shocked to find out this is going on. I appreciate someone writing about it.