Identity theft is the crime of obtaining the personal or financial information of another person to use their identity to commit fraud, such as making unauthorized transactions or purchases. Identity theft is committed in many different ways and its victims are typically left with damage to their credit, finances, and reputation.
Identity thieves usually obtain personal information such as passwords, ID numbers, credit card numbers or social security numbers, and misuse them to act fraudulently in the victim’s name.
These sensitive details can be used for various illegal purposes including applying for loans, making online purchases, or accessing victim’s medical and financial data.
The term identity fraud is sometimes used as a synonym for identity theft, although the concept of identity fraud also encompasses the use of false or modified identity, as opposed to identity theft where criminals misuse someone else’s real identity.
Identity theft occurs when someone steals your personal information—such as your Social Security number, bank account number, and credit card information. Identity theft can be committed in many different ways. Some identity thieves sift through trash bins looking for bank account and credit card statements. More high-tech methods involve accessing corporate databases to steal lists of customer information. Once identity thieves have the information they are looking for, they can ruin a person’s credit rating and the standing of other personal information.
Identity thieves increasingly use computer technology to obtain other people’s personal information for identity fraud. To find such information, they may search the hard drives of stolen or discarded computers; hack into computers or computer networks; access computer-based public records; use information-gathering malware to infect computers; browse social networking sites; or use deceptive emails or text messages.
Important:Victims of identity theft often do not know their identity has been stolen until they begin receiving calls from creditors or are turned down for a loan because of a bad credit score.
Identity theft is closely linked to phishing and other social engineering techniques that are often used to pry sensitive information from the victim. Public profiles on social networks or other popular online services can also be used as the source of data, helping criminals to impersonate their targets.
When identity thieves have collected such information, they can use it to order goods, take over the victims’ online accounts or take legal action in their name. In the short term, affected individuals can suffer financial loss due to unauthorized withdrawals and purchases made in their names.
In the mid-term, victims might be held responsible for the perpetrators’ actions and be investigated by law enforcement agencies as well as facing consequences such as legal charges, change in their credit status as well as damage to their good names.
According to a 2017 Identity Fraud Study, in 2016 identity theft caused $16 billion in damages to 15.4 million consumers in the United States alone. In the same year, UK fraud prevention organization Cifas documented almost 173,000 cases of identity fraud in the UK, the highest level since they began keeping records 13 years ago.
There are several types of identity theft including:
In financial identity theft, someone uses another person’s identity or information to obtain credit, goods, services, or benefits. This is the most common form of identity theft.
If identity thieves obtain your Social Security number, they can use it to apply for credit cards and loans and then not pay outstanding balances. Fraudsters can also use your number to receive medical, disability, and other benefits.
In medical identity theft, someone poses as another person to obtain free medical care.
Synthetic identity theft is a type of fraud in which a criminal combines real (usually stolen) and fake information to create a new identity, which is used to open fraudulent accounts and make fraudulent purchases. Synthetic identity theft allows the criminal to steal money from any credit card companies or lenders who extend credit based on the fake identity.
In child identity theft, someone uses a child’s identity for various forms of personal gain. This is common, as children typically do not have information associated with them that could pose obstacles for the perpetrator. The fraudster may use the child’s name and Social Security number to obtain a residence, find employment, obtain loans, or avoid arrest on outstanding warrants. Often, the victim is a family member, the child of a friend, or someone else close to the perpetrator. Some people even steal the personal information of deceased loves ones.
Tax identity theft occurs when someone uses your personal information, including your Social Security number, to file a bogus state or federal tax return in your name and collect a refund.
In criminal identity theft, a criminal poses as another person during an arrest to try to avoid a summons, prevent the discovery of a warrant issued in their real name, or avoid an arrest or conviction record.
Tip:If you believe you are a victim of identity theft, start by going to IdentityTheft.gov, a website administered by the Federal Trade Commission (FTC). It provides directions on how to help you recover your identity and repair any damage you have experienced.
Article Source: eset.com – investopedia.com
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