What is Identity Theft and What Risks It Poses
Identity theft also known as identity fraud, is a crime in which an imposter collects key pieces of another person’s personally identifiable information in order to impersonate someone else. Common instances include the using of a person’s name, address, Social Security number, credit card or medical insurance number to obtain money or services under the original holder’s name.
Identity Theft Types
Identity theft is classified into two types: true name and account takeover.
True-name identity theft is where the thief uses personal information to create or open new accounts which may include credit card account, or a checking account to obtain bank checks. Account takeover on the other hand, is where the thief uses personal information to gain access to a person’s existing accounts. Commonly, the thief will change an account’s mailing address and run up a large bill before the actual owner of the account realizes that there is a problem.
Examples of Cases of Identity Theft
The following are the most common manifestations of identity theft:
- Financial identity theft – stolen personal information is used to avail credit, goods, services or benefits. This is the most common form of identity theft.
- Medical identity theft – stolen information which includes health insurance member numbers are used to obtain medical services. The victim’s insurance company might receive the faked bills, and include them in the victim’s account.
- Tax-related identity theft – a stolen Social Security number is used to file a false tax return with the Internal Revenue Service (IRS).
- Criminal identity theft – stolen identity information is used by a criminal to misinterpret himself as another person during arrest to avoid summons, prevent the discovery of a warrant issued in his real name or avoid an arrest or conviction record.
- Child identity theft – a stolen child’s Social Security number is used to apply for government benefits, open bank accounts and other services.
Techniques Applied in Identity Theft
Identity thieves increasingly use computer technology to collect other people’s personal information for identity fraud. To do so, they commonly search hard drives of stolen or discarded computers; access computer-based public records; hack into computers or computer networks; browse social networking sites; use information gathering malware to infect computers or use deceptive emails or messages.
Some people also use the old-fashioned methods such as dumpster diving, or retrieving personal paperwork and discarded mail from public trash dumpsters and the trash of businesses; shoulder surfing, where the thief simply stands next to someone in a public venue and observes as the person fills out personal information on a form or conveys it over the telephone.
Risks Entailed in Identity Theft
Identity theft is not just a mere nuisance. It can cause serious consequences not only on your finances but also your life. According to the Federal Trade Commission (FTC), identity theft victims may have thousands of dollars in debt accrued in their names; get an unreal credit history; will not be given loans, mortgages, and employment. They will have to spend months or years to try to resolve financial errors and problems.
Another problem is that as a victim, you may also find yourself facing criminal charges. This depends on what the identity thief did with your stolen identity, you may have to prove that you did not break the law. Charges may happen if an identity thief receives a citation or otherwise breaks the law while using your identity. You could be implicated in a crime that you were not involved in and could have to deal with the consequences.