What Is Identity Theft?
Identity theft is the crime of obtaining the personal or financial information of another person to use their identity to commit fraud, such as making unauthorized transactions or purchases.
Identity theft is committed in many different ways and its victims are typically left with damage to their credit, finances, and reputation.
KEY TAKEAWAYS
- Identity theft occurs when someone steals your personal information and credentials to commit fraud.
- There are various forms of identity theft, but the most common is financial.
- Identity theft protection is a growing industry that keeps track of people’s credit reports, financial activity, and Social Security number usage.
Understanding Identity Theft
When someone steals your personal information, such as your Social Security number, bank account number, or credit card number, it is known as identity theft. Identity theft can be done in a variety of ways. Some identity thieves rummage through garbage cans in search of bank and credit card statements.
Accessing company databases to obtain lists of client information is a more high-tech way. Identity thieves can destroy a person’s credit rating and the status of other personal information once they obtain the information they need.
Computer technology is increasingly being used by identity thieves to steal other people’s personal information in order to commit identity fraud.
They may scan the hard drives of stolen or discarded computers, hack into computers or computer networks, access computer-based public documents, or utilise data-gathering malware to find such information.
Victims of identity theft often do not know their identity has been stolen until they begin receiving calls from creditors or are turned down for a loan because of a bad credit score.
Types of Identity Theft
There are several types of identity theft including:
Financial identity theft
In financial identity theft, someone uses another person’s identity or information to obtain credit, goods, services, or benefits. This is the most common form of identity theft.
Social Security identity theft
If identity thieves obtain your Social Security number, they can use it to apply for credit cards and loans and then not pay outstanding balances. Fraudsters can also use your number to receive medical, disability, and other benefits.
Medical identity theft
In medical identity theft, someone poses as another person to obtain free medical care.
Synthetic identity theft
Synthetic identity theft is a type of fraud in which a criminal combines real (usually stolen) and fake information to create a new identity, which is used to open fraudulent accounts and make fraudulent purchases.
Synthetic identity theft allows the criminal to steal money from any credit card companies or lenders who extend credit based on the fake identity.
Child identity theft
In child identity theft, someone uses a child’s identity for various forms of personal gain. This is common, as children typically do not have information associated with them that could pose obstacles for the perpetrator.
The fraudster may use the child’s name and Social Security number to obtain a residence, find employment, obtain loans, or avoid arrest on outstanding warrants.
Often, the victim is a family member, the child of a friend, or someone else close to the perpetrator. Some people even steal the personal information of deceased loved ones.
Tax identity theft
Tax identity theft occurs when someone uses your personal information, including your Social Security number, to file a bogus state or federal tax return in your name and collect a refund.
Criminal identity theft
In criminal identity theft, a criminal poses as another person during an arrest to try to avoid a summons, prevent the discovery of a warrant issued in their real name, or avoid an arrest or conviction record.
Identity Theft Protection
Many types of identity theft can be prevented. One way is to continually check the accuracy of personal documents and promptly deal with any discrepancies.
If you believe you are a victim of identity theft, start by going to IdentityTheft.gov, a website administered by the Federal Trade Commission (FTC). It provides directions on how to help you recover your identity and repair any damage you have experienced.
There are several identity theft protection services that help people avoid and mitigate the effects of identity theft.
Typically, such services provide information to help people safeguard their personal information; monitor public and private records, such as credit reports, to alert their clients of certain transactions and status changes; and provide assistance to victims to help them resolve problems associated with identity theft.
In addition, some government agencies and nonprofit organizations provide similar assistance, typically with websites that have information and tools to help people avoid, remedy, and report incidents of identity theft. Many of the best credit monitoring services also provide identity protection tools and services.