What is Identity Theft?

Identity theft happens when someone makes use of your personal information to commit fraud or other crimes. The personal information most commonly stolen in identity theft are your name, social security number and credit card information.

It's estimated by the FTC that about 10 million people have their identities stolen each and every year in America, and this number only continues to rise. With the US population being about 300 million, that's like having a 1 in 30 chance every year. Over the course of 10 years this amounts to a 1 in 3 chance your identity will be stolen.

There are a number of things identity thieves do with your personal information including:

  • Opening a Credit Card - Identity thieves often apply for credit cards using your personal information with their mailing address.
  • Rent an Apartment - Yes, they can even rent an apartment in your name. Most identity thieves have bad credit so renting is nearly impossible for them
  • Open other Accounts - Thieves may decide to open other accounts in your name such as power bills and phone contracts.

How Do Thieves Steal Identities?

There are many different ways thieves may steal your identity which includes:

  • Dumpster Diving - They will dig through your trash or the trash of places you make purchases to find your personal information.
  • Skimming - These devices are used to steal your credit card information at the point of sale or at an ATM machine. Skimming devices are used by identity thieves or used unknowingly when added to ATM machines.
  • Phishing - Thieves will send you link to a fake website to steal your login details. They may also call you on the phone and request sensitive information to "verify your identity".
  • Pick Pocketing - Good old fashion stealing is still alive and well in the world of identity theft.
  • Social Engineering - They may pretend to be you and use false pretenses to trick companies you work with into giving out your personal information, typically pretending to be you.

The worst part about identity theft is the fact that thieves are able to change your address on accounts to divert any warning signs you may have had.

What Else Can an Identity Thief Do?

Once your identity is stolen is can be used in a number of different ways including:

  • Credit Card Fraud - Thieves will open an account in your name and change the billing address so that you never see the statements. You might not find out about the account until the next time you check your credit report, after the damage is already done.
  • Phone & Utility Fraud - They might open new accounts in your name or simply begin using your existing accounts. Thieves can use your personal information for establishing accounts with power companies, cable companies, telephone providers and more.
  • Bank Fraud - Some thieves are so brazen they will even open a bank account in your name or write checks out of your current accounts. They might even take out a loan in your name or steal from your account using your ATM card.
  • Government Document Fraud - They can even get a government issued photo ID or driver's license in your name with their picture on it. They might even use your social security number to get benefits from the government.
  • Other Fraud - They can even do things like getting a job with your social security number, rent a house in your name, run up medical bills in your name or even give your name to the police in an arrest. After they skip out on their court date a warrant could be issued in your name.

How Do You Know if your Identity has been Stolen?

The absolute best way you can help detect and prevent identity theft is to be proactive regarding all of your accounts. Check your monthly statements regularly to verify all of the transactions are legitimate. Checking your credit report can also help things from getting completely out of control if your identity has been stolen.

Common warning signs include:

  • Bills from collection agencies regarding debts you haven't taken out personally
  • Hearing from a mortgage or car loan company regarding a denial of credit you never applied for
  • Finding out you've been denied for an apartment you never applied for

What Can You do if your Identity is Stolen?

There are a number of things you can do including:

  • File a police report
  • File a complaint with the FTC
  • Notify Creditors
  • Dispute Unauthorized Transactions

Filing a police report with details regarding your identity theft will provide you with certain legal rights when dealing with the credit reporting bureaus. This report can be used to permanently block all of the fraudulent information that occurs from identity theft.