What Do I Do If Someone Stole My Social Security Number To Get a Job?

Data breaches are unfortunately a common part of our modern digital life. However,

Hackers grabbing one of your old passwords may not be as harmful as SIM swapping or even getting ahold of your Social Security number, address, date of birth and phone number.

One nightmare scenario: You get a 1099 in the mail from a company for which you didn’t work.

That’s what a listener of the Clark Howard Podcast recently experienced. What can you do if it happens to you?

What Do I Do If I Get a 1099 From a Company For Which I’ve Never Worked?

Can you do anything if someone uses your Social Security number to obtain employment?

That’s what a Clark listener wanted to know on the Feb. 15 podcast episode.

Tricia in Louisiana asked: “I recently received a 1099 in the mail from a company that I have never worked for. All of my personal information on it is accurate. My credit is frozen with the three credit bureau companies from a previous bout with identity theft.

“I have registered with the FTC through identitytheft.gov and I am following their suggested plan. I am assuming the person using my personal information to obtain employment has a bank account open in my name to receive payroll money from this company. Can you recommend a safe way for me to find bank accounts that may have been opened in my name?”

Tricia is right in that a great first step is to freeze your credit at all three major credit bureaus. That goes for any type of potential identity theft, data breach, or even as a preventative measure.

Unfortunately, someone has already acted to use her Social Security number to obtain employment.

“This is a very difficult slog. [The perpetrator] probably doesn’t have a legal right to work in the United States or a legal right to work. And so it’s very common that people will trade on stolen Social Security numbers in order to obtain work.

“And yes, the person may well have a checking account using your identity or they may be getting paid by an employer in payroll cards or something like that. Or even getting a paper check.”

Locating Checking Accounts in Your Name: A Potential Solution

While Equifax, Experian and Transunion own the world of credit history and credit scores, a lesser-known entity called ChexSystems serves a similar purpose for the banking industry.

ChexSystems reports your banking history and can alert a bank that you may be a risk when you try to open an account. But it also may be able to point you toward any bank account(s) that are opened in your name using your Social Security number, Clark says.

However, extracting that information from ChexSystems isn’t as easy as looking up your credit score.

“ChexSystems is the only outlet I’m aware of where you may be able to find out if there is a checking account using your identity that is not yours,” Clark says.

“They would then be able to inform that financial institution. I have heard from people in the past that they are not that cooperative when there is an identity theft situation like this on an open account so you may have to be pretty persistent with ChexSystems.”

What To Do With a Real 1099 From a Company You Never Worked For

The fact that Tricia received a 1099 at her address and is aware of the development may be a blessing in disguise, as my parents would say. Or perhaps a silver lining.

It’s a mess. As the IRS will be expecting her to pay income tax on that money. But Tricia should have information on the 1099 that will help her track down and contact the company that issued the statement.

Whatever you do, don’t ignore the 1099.

“There’s a whole procedure you have to do where you report the income to the IRS and then back it out of your return. It’s a fairly complicated procedure,” Clark says.

“You cannot ignore the 1099. It must be reported. Otherwise, the IRS will send you a bill for the tax they have calculated as due on that 1099.”

Clark strongly recommends hiring an enrolled agent or a CPA who specializes in tax.

Final Thoughts

If someone uses your Social Security number to obtain employment, your first order of business is to contact that company and make it clear that someone is defrauding you and them.

You also need to handle the tricky tax mess the scammer has caused you. It’s a great idea to hire a tax professional to help you.

Freeze your credit at all three major credit bureaus if you haven’t done so already.

Finally, you may be able to track down any bank account(s) that this individual has opened in your name via ChexSystems. But you’ll probably need to be persistent.