What is 'Identity Theft'

Identity theft is the crime of obtaining the personal or financial information of another person for the sole purpose of assuming that person's name or identity to make transactions or purchases. Identity theft is committed in many different ways. Some identity thieves sift through trash bins looking for bank account and credit card statements; other more high-tech methods involve accessing corporate databases to steal lists of customer information Once they have the information they are looking for, identity thieves can ruin a person's credit rating and the standing of other personal information.

BREAKING DOWN 'Identity Theft'

Types of identity theft include criminal, medical, financial and child identity theft. In criminal identity theft, a criminal misrepresents himself as another person during arrest to try to avoid a summons, prevent the discovery of a warrant issued in his real name or avoid an arrest or conviction record. In medical identity theft, someone identifies himself as another person to obtain free medical care. 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.

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, who 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, child of a friend or someone else close to the perpetrator.

High-Tech Identity Theft

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.

Identify Theft Protection

Many types of identity theft can be prevented. One way is to continually check the accuracy of personal documents and promptly deal with any discrepancies. Lots of businesses provide products that help people avoid and mitigate the effects of identity theft. Typically, such services provide information helping people to safeguard their personal information; monitor public records, as well as private records such as credit reports, to alert their clients of certain transactions and status changes; and provide assistance to victims to help them resolve problems associated with identity theft. In addition, some government agencies and nonprofit organizations provide similar assistance, typically with websites that have information and tools to help people avoid, remedy and report incidents of identity theft.

RELATED TERMS
  1. Synthetic Identity Theft

    Synthetic identity theft is a type of fraud in which a criminal ...
  2. Cyber Identity

    Cyber identity refers to the personality or personalities that ...
  3. Deceased Alert

    A deceased alert is a notice on a credit report that tells credit ...
  4. Fair and Accurate Credit Transactions ...

    The Fair and Accurate Credit Transactions Act (FACTA) is a U.S. ...
  5. Credit Fraud Alert

    Credit fraud alerts give notice to the credit reporting bureaus ...
  6. Data Breach

    A data breach is an unauthorized access and retrieval of sensitive ...
Related Articles
  1. Managing Wealth

    Morgan Stanley's New Identity Theft Protection (MS)

    Morgan Stanley now offers identity theft protection to high net worth clients, pursuant to a poll in which they cited this as a top fear.
  2. Insights

    Are You A Target For Identity Thieves?

    The Americans at highest risk for identity theft and identity fraud aren't the ones you most expect. See if you're on the high-risk list.
  3. Insights

    Pros And Cons Of Credit Monitoring Services

    Identity theft is a complex problem. Learn if credit monitoring services are the solution.
  4. Tech

    Whose Fault Is Identity Theft?

    You've been so careful, so how did they get your information? Who is really to blame for your identity being stolen?
  5. Insights

    5 Overlooked Places Where Your Identity Can Be Stolen

    Identity theft affects many Americans, and are often caught off guard. These are 5 places thieves target.
  6. Tech

    Protect Your Kids Against Identity Theft

    Children have valid Social Security numbers and no debt, which makes them ideal targets. Here’s what parents can do to prevent a scam.
  7. Tech

    Avoid Becoming An Identity Thief's Next Victim

    Use these 7 techniques to keep yourself under the radar and out of the way of identity thieves.
  8. Insights

    Identity Theft: How Much Should You Worry?

    Identity fraud cost $18 billion last year. But are enough Americans victimized – with big enough losses – that it's worth buying protection?
  9. Financial Advisor

    Top Hacks to Protect Clients from Tax Scams

    There are many ways that clients can be victimized in today’s digital world, but there are also many ways to protect against these invasions. Here are some.
  10. Taxes

    How To Safeguard Your Tax Returns From Identity Theft

    Identity thieves love tax season. In 2012, there were 13 million victims of identity theft. As easy as it is for thieves to steal your information, there are also simple measures you can take ...
RELATED FAQS
  1. Does the FDIC cover identity theft?

    Learn whether or not identify theft is covered by the FDIC, and find out what steps you can take to prevent or report identity ... Read Answer >>
  2. Why Do Brokers Ask for Personal Information?

    There are 3 reasons a broker needs personal information: suitability, record-keeping and the law. Read Answer >>
  3. Is your salary on your credit report?

    Your salary is not on your credit report, as of 2016. It has been at least 20 years since credit reports included salaries. Read Answer >>
Trading Center