Hackers can target your Social Security benefits

Tim Sagert has been enduring the pain of a double whammy of identity theft.

First a crook used his stolen ID to claim Social Security benefits last spring. Then this tax season, Sagert was hit with an SSA1099 tax form for reporting the income paid to the crook.

“I’m refusing to pay it,” said Sagert, 63, of Sterling Heights, president of Communications Workers of America Local 4008 in Mount Clemens, Michigan.

Why should he have to fret about the possibility of paying income taxes on $2,095 in Social Security benefits when a fraudster stole the money? And why must he constantly call to try to fix things with Social Security?

Where personal data is stolen is hard to track down because ID thieves can access the data in so many ways now.

The Equifax data breach, first disclosed in September — which some dub the most destructive data breach recorded — compromised personal info of nearly 146 million consumers, including some Social Security data.

Many consumers wondered whether someone would open a credit card in their name or file a fake tax return to generate a fraudulent refund using their stolen Social Security numbers.

Few imagined that hackers would try to make bogus claims for Social Security benefits. But consumers in their 60s who have not claimed benefits yet could be at risk for fraudulent Social Security retirement claims.

Fraudsters developed a keen sense of how to use the tax system to their advantage several years ago. So, really, it should be no surprise if they prove adept at cracking into the weak spots in the Social Security system, too.

“Whoever is doing this clearly understands how the Social Security rules work,” said Mary Beth Franklin, a nationally recognized expert on Social Security claiming strategies.

For example, a person who claims Social Security after full retirement age is eligible for up to six months of retroactive benefits, payable in a lump sum. If you accept that lump sum, your monthly benefit is smaller.

For the cybercrooks, the payout is huge if they use the ID of someone in that age range who isn’t already collecting benefits.

For the first time ever, Social Security numbers eclipsed credit card numbers as the most breached piece of personal information in 2017, according to a report on identity fraud by Javelin Strategy & Research.

About 35 percent of breach victims reported that their Social Security number was among the data compromised, compared with 30 percent with stolen credit card information.

A big data breach isn’t the only way to get Social Security numbers. Consumer watchdogs warned in February that con artists claiming to be from Social Security were trying to trick people in various parts of the country into sharing their Social Security numbers over the phone and through a website.

Tax season can only make things tougher for ID theft victims, as it’s not obvious what to do. Depending on your filing status and income, up to 85 percent of Social Security benefits can be taxed at ordinary income tax rates. In addition, taxable Social Security benefits can trigger higher Medicare premiums, which are based on income.

The Social Security website at ssa.gov doesn’t give clear tax help to consumers who have had their data stolen. The site does give information for those who need to replace a legitimate SSA1099. You can use your online Social Security account to get a replacement SSA-1099, or call 800-772-1213 Monday through Friday from 7 a.m. to 7 p.m.