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Watch out for this Social Security scam

By Christine DiGangi/

The Better Business Bureau issued a warning earlier this week highlighting an email scam designed to trick recipients into divulging personal information, including names, addresses and Social Security numbers.

The scheme involves an email from an account impersonating the Social Security Administration, Service Canada or an organization claiming to represent a government agency. The email says you qualify for a new benefit, and to claim it, you need to fill out a form, which asks for a variety of details, such as your name, address, phone number, Social Security number, employer and driver's license or government ID number. Upon completing the form, you receive a confirmation email, which says you'll hear from a government representative soon.

People who fall for the phishing scam have handed con artists all the information they need to commit identity theft -- with that information, someone can open financial accounts in your name or divert benefits intended for you. That's when the real problems start: Fraudulent accounts will likely be reported to the credit bureaus and affect your credit standing.

As soon as you spot identify fraud, you should dispute its presence on your credit report, but it may take a while to get it removed and allow you to recover from identity theft. Disputed accounts are not factored into credit scores, but that may not help you if you're applying for a loan. For example, lenders may reject a mortgage application if the applicant's credit report includes accounts in dispute.

If you're ever a victim of a scam, you should report it to a group such as the Better Business Bureau or the Federal Trade Commission, so they can warn others and work to stop fraudsters. Even if you don't think you've been a scam target, you should make a habit of checking your credit reports from all three bureaus, in the event someone stole your identity without raising suspicion.

Your credit score can also serve as an identity-theft detector. You can check two of your credit scores for free on, and if you notice a large change from one month to the next, you'll want to look into the cause. It could be a legitimate shift -- missing loan payments or increasing your credit utilization can cause huge month-to-month score changes -- but it may also be an indication of unauthorized use of your identity.

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