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 the end result is that victims are typically left with damage to their credit, finances, and reputation.
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 use.
Understanding Identity Theft
Identity theft occurs when someone steals your personal information—such as your Social Security number, bank account number, and credit card information. Identity theft is committed in many different ways. Some identity thieves sift through trash bins looking for bank account and credit card statements. Other more high-tech methods involve accessing corporate databases to steal lists of customer information. Once they have the information they are looking for, identity thieves can ruin a person’s credit rating and the standing of other personal information.
Identity thieves increasingly use computer technology to obtain other people’s personal information for identity fraud. To find such information, they may search the hard drives of stolen or discarded computers; hack into computers or computer networks; access computer-based public records; use information gathering malware to infect computers; browse social networking sites; or use deceptive emails or text messages.
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 get a hold of 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, who 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, child of a friend or someone else close to the perpetrator. Some people even steal the personal information of deceased loves 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 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.