What Is Identity Theft?

By George Stargell, Senior Editor Archive

The Federal Trade Commission website says, "Identity theft occurs when someone uses your personally identifying information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes."¹

That's true but incomplete. Let's try to fill in some blanks.

What's the point of identity theft?

Like most crimes, the main goal tends to be personal profit — more money, more stuff, or just the chance to shift blame for another crime.

Who commits ID theft?

Who doesn't? Victims have been targeted by family members, friends, co-workers, strangers — even hackers halfway around the world. And if you think it's just career criminals, think again: A recent study of U.S. Secret Service cases showed that 71% of identity thieves had never been arrested before.²

How is identity theft committed?

Since ID theft relies on personally identifying information, most thieves target the source: The individual. Victims can be stung by Internet fraud, phone scams, dumpster diving, credit-card duplication, ATM shoulder-surfing, old-school breaking-and-entering, pickpocketing, you name it. However and wherever you store unique identity data, chances are an ID thief is devising ways to swipe it.

What do ID thieves do with the stolen information?

As noted earlier, they use it to enrich their lives, mostly through:

• opening new accounts (e.g., credit card accounts) or making charges to existing ones (e.g., victims' checking and savings accounts)
• buying new services — cellphones, cable TV, utilities, and more
• taking out new loans — mortgages; college, car, or business loans; etc.
• committing crimes in the ID theft victim's name

What does identity theft do to its victims?

Nothing good. Identity theft victims can spend years and thousands of dollars trying to restore their identities and clean up the damage made to their credit histories. While doing so, they'll likely face higher interest rates on credit lines, higher insurance premiums, a tighter job market, and unwanted calls from collection agencies and maybe even law enforcement officials.

Any good news?

Criminal penalties are getting tougher. Awareness is rising. And diligently protecting your identifying information can help you keep ID thieves at bay.

Footnotes

¹ Fighting Back Against Identity Theft, Federal Trade Commission
² "Identity Fraud Trends and Patterns: Building a Data-Based Foundation for Proactive Enforcement," Utica College, October 2007