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article imageAnyone with a SSN is at risk of becoming a 'credit zombie'

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By Leigh Goessl     Jun 5, 2012 in Technology
Zombies are all over the news this week, but there is another very real type of zombie walking amongst us. Everyday, people are being turned into "credit zombies".
It's not as uncommon as you might think. While it is far less gory than the other types of 'zombie' stories making headlines lately, being designated as a credit zombie is still a nightmare for those affected.
When an individual becomes a credit zombie, this status often originates from a simple typo or other record-keeping error by an organization, such as a financial institution, government agency or other company. And anyone in possession of a Social Security number could be at risk.
MSNBC reports the story of Judy Rivers today, but had originally reported her story when it began in Aug. 2010.
At that time, Rivers tried to open a safe deposit box at the bank and was refused, with the reason citing she was dead. She assured them, as she stood there, she was very much alive, but to no avail, according to records, she had died in Aug. 2008.
Rivers had been declared "digitally dead," reported MSNBC Red Tape.
Meanwhile, the Social Security Administration (SSA) confirmed Rivers had an active Social Security Number, but even that didn't help resolve her credit problems. She was denied credit, her debit card was taken away and she was denied replacement cards. It got worse from there when Rivers' credit zombie status prevented her from gaining employment, nor could she get unemployment or any other government benefits.
MSNBC reported Rivers maintained her humor through this digital nightmare, even asking the bank if she had to pay her $6,000 loan back since she was listed as deceased; the bank apparently didn't think she was "dead" enough to forgive that loan.
Eventually the error was connected to a company called Chex Systems Inc., a business that conducts background checks for many companies. Her records contained the phrase, "[Social Security] number inactivated due to report of death." Chex said its information came from the SSA, but they said Rivers was alive in their records.
This "death" comment on Rivers' record seemingly filtered through the maze of digital record keeping in the credit system, and its unclear why that comment was included.
In Feb. 2012, Digital Journal reported on another victim of erroneous record keeping. In Arthur Livingston's case, he learned the Bank of America declared him dead and wound up in a mess of red tape trying to get himself declared as living. Due to this error, he could not get his mortgage loan, which caused the delay of his house being built, resulting in an entire domino effect on his life.
Of the 2.8 million deaths reported per year, estimates indicate about 14,000 people are erroneously declared dead by the Social Security Administration and placed on the agency's Death Master File per year. The Master Death File database had been developed three decades ago under the Freedom of Information Act as an anti-fraud tool for business. However, it's become a problem because this is public record, and has caused a host of new problems with very much alive individuals having all their information exposed due to wrongful listing.
Rivers is now an advocate for other credit zombies. One woman she helped had been unable to get her medications after her disability checks stopped arriving; after seven months of going without her medicine, Rivers managed to get her declared "alive" again by the Social Security Administration. She also helped an 18-year-old college student gain access to his college funding after his account was frozen; he had missed a semester of school trying to untangle the mess.
Now she's busy writing to officials and considering a class-action lawsuit against agencies that have denied her and others credit.
"I don't mind being the poster child for this," Rivers told MSNBC Red Tape. "When I speak to people, I am very direct. I just ask them what they are doing to fix this."
After two years of being consistently denied credit, Rivers found she was recently approved. Rivers is still not secure in her newly restored "living" status, however, as she has yet to receive a valid credit report confirming she's no longer a credit zombie. Additionally, as Red Tape points out, now she's open to risk of identity theft, which is a whole new can of worms.
WCPO ABC News 9 reported in Feb. 2012 Rep. Sam Johnson, R-Texas had assembled an investigation into the inaccuracies in the SSA's Death Master File. One of the biggest problems is that victims are not notified of the errors and often do not find out until they run into some sort of hurdle, like this Houston woman did.
Johnson is pursuing the elimination of the Master Death File as a solution, and the issue is currently before Congress. This has been met with opposition, and some are hoping for a compromised solution. One of the other potential solutions suggested is to restrict who can report, and also who can access the files for legitimate verification purposes. Other proposals include developing a system where SSA notifies victims.
But until this is resolved, many people like Rivers will continue to suffer.
Several media reports point to the Identity Resource Center as a means of information and support in getting identity issues resolved.
And if credit zombie isn't enough of a nightmare, there are also those who are debt zombies, a different kind of financial nightmare.
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