Identity Theft

What Is Identity Theft?

What is identity theft exactly? Identity theft happens when someone steals a piece of personal information about you and uses it to commit a fraud in your name. The thief might steal your Social Security number, name, date of birth, credit card information, bank account numbers, mother's maiden name, etc. and use these things to:

- Open new accounts;

- Change the mailing address on your current credit cards;

- Rent apartments;

- Establish services for utility companies;

- Write fraudulent checks;

- Steal and transfer money from a bank account;

- File bankruptcy;

- Obtain employment;

- Establish a new identity; and/or

- Apply for a mortgage, car loan, or cell phone.

Does that answer the question: What is identity theft? Once someone assumes your identity to get credit in your name and steal from businesses, you probably won't realize it happened until months later. Federal law limits a consumer's liability for credit card fraud to $50 per account. Visa and MasterCard have adopted zero-liability policies, but the real problem remains in the clean-up of your credit report.

And don't think identity theft is a problem only for adults. About 2% of the identity thefts involve a child's Social Security number. Parents should check their children's credit history reports as they would their own for signs of theft. If your child receives mail, like unsolicited credit cards or pre-approved applications, this may point to someone assuming your son's or daughter's identity to establish credit.

Identity theft is the fastest-growing crime in America. And it extends across borders and involves other parts of the globe. The FTC estimates that 10 million people were victims in 2002.

Determining the exact scope and financial impact of identity theft on people and business is hard. There's been disagreement over what defines identity theft and it's hard to calculate the impact when many incidents go unreported and it can take years for a series of incidents to be tracked and calculated.

The lack of a central command post for dealing with identity theft - it often involves local, state, and federal offices - makes it difficult to understand the problem clearly. This mechanical challenge caused early government statistics to underestimate the numbers.

So what is identity theft? It can be extremely lucrative for criminals. A clever thief can walk away with over $10,000 per victim. Most often, identity thieves use the victim's information to commit credit card fraud. However, more than one in five victims reported their information was used to commit more than one type of fraud.