Identity Theft: What You Need to Know

What is identity theft?

Identity theft is the fraudulent use of one's personal information, ranging from a social security number to a bank account password.

How common is identity theft?

The Federal Trade Commission estimates that 9 million Americans fall victim to identity theft every year.

What are the possible ramifications of identity theft?

Identity theft can have a serious impact on victims. Those who fall victim to identity theft can lose uncountable hours as they attempt to rectify the misinformation resulting from the theft. The crime also can pose a significant cost to victims, sometimes reaching into the thousands.

Additionally, victims of identity theft can lose out on job opportunities, be denied for loans and even arrested for crimes they did not commit.

What are some common types of identity theft?

There are many forms of identity theft. Some of the most common types include fraudulent bank account activity, such as using stolen or counterfeit checks to fraudulently withdrawal funds from a victim's account; bankruptcy fraud, through which the perpetrator files for bankruptcy in the victim's name; and fraudulent credit card activity, which can include fraudulent charges or opening a new account using the victim's personal information.

Other types of identity theft include tampering with a victim's securities investments or brokerage accounts through investment fraud; obtaining medical treatments in the victim's name, known as medical identity theft; opening a phone account in the victim's name or using a victim's phone account to make unauthorized calls; and fraudulent student loan schemes, through which the identity thief uses the victim's personal information to obtain an education loan.

Victims of identity theft also can find themselves in jail when identity thieves using the victims' identities are caught committing crimes.

What methods are utilized by identity thieves?

Identity thieves utilize a variety of means to commit their crimes. Some identity theft methods commonly used include dumpster diving in the search for would-be victims' personal information in their trash; submitting a change of address request that diverts a victim's billing or bank statements to a different address; and collecting victims' personal information by stealing their purses and wallets.

Some high-tech methods used by identity thieves include skimming, through which a victim's credit or debit card numbers are stolen using a special device that copies the information when the card is processed, and phishing, through which a victim is directed to divulge his or her personal information after receiving a spam email or pop-up message.

Identity thieves also attempt to obtain personal information directly from financial institutions by using false pretenses, known as pretexting.

What steps can be taken to protect against identity theft?

Fortunately, there are many steps that one can take to protect against identity theft. Some of the most basic steps you can take include limiting access to your social security number and keeping the number secure, shredding documents that include your personal information before throwing them away, always verify that a person is actually who he or she claims to be before providing your personal information and mail your paid bills from secured mail boxes only.

When it comes to guarding yourself against online identity thieves, you should not respond to requests for your personal information that comes in the form of spam emails or pop-up messages. You also should install anti-spyware applications on your computer that can protect you from programs designed to record your keystrokes.

Additionally, you might consider securing the services of a company that helps you monitor your credit activity. Some services also help to address the aftermath of identity theft, which could save you uncountable hours on the phone with creditors.

Where can I find more information on identity theft?

The Federal Trade Commission provides consumers with information on how to protect themselves from identity theft and what to do if someone is victimized. This information can be found on the FTC's identity theft web site, Fighting Back Against Identity Theft.