Identity theft is the use of another individual’s personal information to commit fraud. Such information may include an individual’s name, Social Security number, driver’s license number, or credit card number. Identity thieves often obtain private information by stealing wallets or mail. They may also sift through trash or break into computer systems. They may then use the stolen information to pose as another person. With this information, thieves can access bank and credit card accounts, purchase goods and services, or engage in illegal activity.
There are several types of identity theft. Application fraud occurs when an identity thief creates new credit card or bank accounts in another person’s name. The thief may also open telephone and utility accounts, take out loans, rent an apartment, or buy a car. In most cases, the thief fails to pay bills for items and services bought in the victim’s name. Victims are often unaware of the problem for months, because the thief uses a different address from the victim’s for account statements.
A second type of identity theft is called account take-over. Account take-over occurs when a thief gains access to another person’s existing credit card or bank account. For instance, an identity thief may use a victim’s credit card number to buy products over the telephone or Internet. Account take-over is often discovered when a victim notices unusual charges on monthly bills.
Because of legal protections, victims of application fraud and account take-over usually do not have to pay the charges created by identity theft. But such cases can severely damage a victim’s credit history. Consumer experts recommend that people check regularly for unusual information on their credit reports.
Another type of identity theft occurs when a person is charged with a crime and provides another person’s name to the police. For such nonviolent crimes as traffic violations and shoplifting, the individual is typically released and told to appear in court later. But when the person fails to appear at a court hearing, a judge may then issue a warrant for the arrest of the innocent person whose name was provided. At that point, it may be difficult for the innocent person to prove that he or she is not the one who committed the crime.
