What Is Identity Theft?
April 29th, 2011- Identity theft is a crime where a criminal assumes someone else’s identity in order to profit by fraudulent means.
- Identity theft is the fastest growing type of fraud in the USA, the UK and many other developed countries.
Identity Theft Defined
Identity theft – also know as identity fraud, ID theft and ID fraud – is fraud perpetrated by a criminal who assumes someone else’s identity in order to profit illegally.
There are different types of identity theft – but in simple terms, someone pretends to be you in order to sign up for goods and services in your name – or they may simply use your details to access your already existing bank and/or credit card accounts.
You will probably be completely unaware of this until you receive a bill for something you haven’t ordered or your credit card statement arrives with a number of high value purchases of which you have no previous knowledge.
The Extent of Identity Theft
Identity theft is one of the fastest growing forms of crime and hundreds of thousands of people worldwide are victims each year. In the UK, identity theft is the single fastest growing white-collar crime and is currently increasing at a rate of 500% each year. At that rate of growth, says the UK banks’ fraud avoidance bureau “this type of fraud will become the most serious, with significant financial losses”.
In September 2003 the Federal Trade Commission (FTC) issued a report on identity theft which estimated that almost 10,000,000 Americans were the innocent victims of identity theft during 2002. The average identity theft crime involved $10,200 worth of goods or services being fraudulently obtained using the victim’s details – which suggests that the total loss to individuals, businesses and financial institutions was in the region of $33 billion during 2002.
The Cost of Identity Theft
In many cases individuals who are the victims of identity fraud will be reimbursed, in part at least, by the financial institutions involved. However, there may still be some significant loss involved for the individual and there will certainly be a period of extreme disruption. It may be difficult to get credit in future and spurious entries onto credit records may take years to clear up.
In the final analysis, although individuals may receive some compensation, it is still the consumers who have to pay for these fraudulent losses by way of higher insurance premiums, interest rates and general fees.
Other Potential Problems With Identity Theft
The potential financial losses and the inconvenience of hours wasted in repairing your credit report are bad enough – however, there is an even more frightening scenario. There is always a small possibility that the person who has stolen your identity may have done this not purely for immediate financial gain.
It is possible that they may be involved in activities which require them to assume an adopted identity. In such a case, you may become identified as the perpetrator of a crime yourself, rather than the victim. You may even find an arrest warrant issued in your name.
One documented victim of identity theft was a young lawyer in San Diego. On her first day at the District Attorney’s office, she was arrested, handcuffed and marched off to jail for crimes her identity thief had committed. Not the best first day at work.
Take Action to Minimise The Risk of Identity Fraud
There is no doubt that identity fraud is a very serious problem in modern society. It affects both individuals and businesses and is increasing in frequency year on year.
It makes sense to take steps to minimise the risk of becoming a victim of this type of crime. However, it is also sensible to have a plan in place to minimise the impact in the event that, through no fault of your own, you fall victim to identity theft.