Identity Theft


What is Identity Theft?

Identity theft, or identity fraud, happens when someone accesses your personal information then uses it to open credit card accounts, bank accounts, and conduct other transactions in your name.

Identity theft is costly,
both in money and time.

Criminals -- armed with your personal data such as date of birth, Social Security number, bank account number and/or credit card number -- can cost you money, damage your credit, and take up a lot of time. Identity thieves have been known to:

  • Drain victims’ existing bank accounts and/or open new accounts, then write bad checks on them
  • Open bogus credit card accounts and max them out
  • Obtain a fake driver’s licenses in the victim’s name, which can cause problems if the person has an accident or fails to show up in court for a traffic offense
  • Apply for loans, utilities, rent apartments and even apply for jobs in the victim’s name
  • File fake tax returns and/or file for bankruptcy in the victim’s name
  • Give the victim’s name to police if arrested -- usually for minor traffic offenses -- but sometimes for more serious crimes. If the impostor fails to show for a court date, the identity theft victim could face arrest.

Does Identity Theft Occur a Lot? 

Yes, but recent data hold out hope that we’re getting smarter about thwarting identity theft. 

A recent study by the Council of Better Business Bureaus and Javelin Strategy & Research, the results of which were reported in several news media including USA Today and the Los Angeles Times, shows that identity theft cost consumers $56.6 billion in 2005, 4% more than it the 54.4 billion figure for 2004. The average amount of fraud rose from $5885 to $6383. 
The good news, however, is that the actual number of people who learned they were victims of identity fraud decreased by 4%, to 8.9 million from 9.3 million in 2004. 

For identity theft victims who could determine how their information had been filched, here’s how it broke down:

  • 47% percent of victims fell prey to unscrupulous family members, friends, neighbors, acquaintances and in-home employees.
  • 30% of identity theft victims got stung because of lost or stolen wallets/credit cards/checkbooks.
  • 9% of identity theft cases involved internet fraud (using the Internet to make unauthorized purchases or other financial transactions and/or selling you something over the Internet then not delivering it)
  • 3% of cases involved “phishing” (more on this later)
  • The remaining instances of identity theft come from other types of scams

Now let's discuss some of the specific scams that identity theft thieves use.

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