What Is Identity Theft Fraud?
What is identity theft fraud?
The FTC definition of identity theft:
"... when someone uses your personally identifying information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes."
As things become increasingly automated and electronic, your personal data is at a higher risk of being stolen or compromised, resulting in a loss of money, credit, and time. And although most people have heard of identity theft at some point, lots of people still don't understand exactly how it works.
How Does Identity Theft Fraud Happen
First, the thief has to obtain information about the victim. There are many ways to do this, and it is surprisingly easy to get somebody's information if they are not careful. Some thieves will dig through trash or steal mail to find important documents. This is why a shredder is a good investment.
Thieves can also gain massive amounts of data on the internet, using malicious software. The software can log the keys that you press, or trick you into entering your data on an illegitimate site posing as one that you trust. Fortunately, modern anti-virus software can protect you from both of these threats.
Another way identity thieves are able to get your information is when a data breach happens. Hackers have been able to access sensitive personal information from credit bureaus, banks, hospitals, and even the US government. The hackers will then either use the information for their own gain or sell it on the dark web.
Victims of identity theft are most frequently targeted because of their good credit. The thief uses the victim's information (such as their social security number) to assume their identity in order to take advantage of their credit.
Using the identity of the victim, they will commit some sort of financial crime that varies from case to case. The most common type is loan fraud or mortgage fraud. The scammer applies for a loan under the identity of the victim, and gets a lump sum of money. Then they disappear, never to be seen again, and the victim is left to pay back the money borrowed.
The Consequences of Identity Theft
Identity theft is notorious for being extremely difficult to recover from. Victims will spend days on end getting all of their business back in order. Sometimes they will still be seeing repercussions of the identity theft years afterwards. Their credit may be permanently damaged.
Reduce Your Risk of Identity Theft
In order to avoid this huge hassle, you should take steps towards protecting your identity. Some people feel it is appropriate to invest in identity theft insurance. This is a good idea if you are at a high risk for identity theft. If you have been notified your identity was compromised in a data breach, you should take steps to monitor your credit file on a regular basis.
Otherwise, you should just constantly be aware of your actions. Shred sensitive documents and use discretion on the computer, and you will lower the chances of having your identity stolen.
For more information about protecting yourself against identity theft fraud, read the following articles:
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