Over 4.7 million Americans, who suffered massive financial losses to hurricanes, wildfires, and other disasters, applied for disaster relief funds through the Federal Emergency Management Agency last year, but the agency suspects as many as 200,000 applications were probably filed by cyber criminals looking to cash in.
Cyber criminals are using data stolen during the Equifax data breach to apply for disaster relief funds in the names of real victims, thereby pocketing millions in cash.
As many as 4.7 million Americans applied for disaster relief funds in 2017 which, according to The Economist, signified a ten-fold rise in such applications compared to the previous year. This was mainly because the United States suffered sixteen natural disasters in the entire year that caused losses of over a billion dollars each.
Even though the number of people affected by such events was staggering, the U.S. Federal Emergency Management Agency believes that nearly 5 percent of all claims could be fraudulent, raised by cyber criminals looking to cash in on millions of dollars being granted to people affected by the disasters. A spokesperson for the agency told The Economist that the number of fraudulent claims could exceed 200,000.
'In some cases, disaster victims found out they had been defrauded when applying for aid. In other instances, people unscathed by the storms and fires received letters from FEMA confirming they had signed up for benefits when they had not.
'Mr Passey [the spokesperson] suspects that sophisticated criminal organisations are involved. To swindle payments from their rightful recipients, criminals had to match breached private information to addresses within federal disaster zones,' The Economist noted.
Last year, leading U.S. credit rating agency Equifax suffered a massive data breach that ended up compromising personal details of as many as 143 million Americans. Equifax initially revealed that the compromised information included social security numbers, driving licence numbers and credit card numbers. However, the agency revealed earlier this week that the breach also exposed license states and issue dates associated with such driving licenses. They also revealed that tax IDs of some Equifax customers were also exposed to hackers last year.
Even though hundreds of other firms in the U.S. suffered data breaches and leaks last year, thereby compromising large troves of customer data, the Equifax breach gave criminals access to data that belonged to a significant percentage of the American population, thereby allowing them to use such data to swindle money from various sources in the names of innocent citizens.
According to The Economist, FEMA has been able to identify a little over 200,000 fraudulent disaster relief claims that could have been filed by such criminals. But with the U.S. facing a series of natural disasters that threaten to impact countless citizens, it remains to be seen how effective the agency will be in the future to separate genuine claims from fraudulent ones. In the meantime, hackers will try their best to cash in on millions being offered by the U.S. government to citizens who were impacted by such incidents last year.