Money and Finance: Identity Theft

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Identity Theft

What is it?

Identity theft is when a thief uses someone's personal data to steal from them.

What type of information do they steal?

Identity thieves use information like a person's address, full name, social security number, passwords, credit card numbers, and bank account information.

How do they use this information to steal money?

Identity thieves are very clever in how they can use this information including:

Opening up new credit card accounts and charging money on them
Transferring money out of a bank account
Taking out loans in the other person's name
Stealing someone's tax refund
Committing crimes in the name of the person whose identity they stole
Using someone's identity to get medical care or drugs

Why is it so bad?

Identity theft has become the fastest growing crime in the United States. In 2012, around 16.6 million people were victims of identity theft. The losses associated with identity theft totaled $24.7 billion. This is greater than the loss from all other property crimes combined.

Is this something new?

Although the idea of identity theft is not new, the rapid growth of identity theft only started in the 1990's. It wasn't until 1998 that the United States passed the Identity Theft and Assumption Act which first made identity theft a federal crime.

Preventing Identity Theft

The Department of Justice says you can reduce your risk by doing four things that each start with a letter in the word "SCAM."

Stingy - You should be stingy in who you give your personal information to. It should only be given to people you trust and on a "need to know" basis. If someone contacts you (calls you on the phone, sends you an email, etc.) and asks for personal information, don't just give it to them.
Check - Check all your financial information on a regular basis. Look for items that don't belong.
Ask - Ask for a copy of your credit report. Again, look for items that don't belong.
Maintain - Maintain detailed records of all your financial accounts.

What do I do if I my identity has been stolen?

There is a lot to do once you realize you've become an identity theft victim. The first thing to do is to report it to the authorities. You can call the FTC, the FBI, the Secret Service, and the local police. You should also contact all three of the major credit reporting companies: Trans Union, Equifax, and Experian. Then you will need to contact the banks, businesses, and creditors where your false identity has been wrongly used.

Interesting Facts About Identity Theft

Around 85% of identity theft cases involve the misuse of an existing account like a bank account or credit card.
If you have been a victim of identity theft, you can get extended fraud alerts placed on your credit report. You can also put a freeze on your credit report.
Even children can become victims of identity theft. Thieves can use their social security number to open bank accounts, take out loans, and get credit cards.
Identity theft is becoming a popular way to fund terrorist organizations.

Learn More about Money and Finance:

Personal Finance

Budgeting
Filling out a Check
Managing a Checkbook
How to Save
Credit Cards
How a Mortgage Works
Investing
How Interest Works
Insurance Basics
Identity Theft

About Money

History of Money
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How Paper Money is Made
Counterfeit Money
United States Currency
World Currencies

Money Math

Counting Money
Making Change
Basic Money Math
Money Word Problems: Addition and Subtraction
Money Word Problems: Multiplication and Addition
Money Word Problems: Interest and Percent

Economics

Economics
How Banks Work
How the Stock Market Works
Supply and Demand
Supply and Demand Examples
Economic Cycle
Capitalism
Communism
Adam Smith
How Taxes Work
Glossary and Terms

Note: This information is not to be used for individual legal, tax, or investment advice. You should always contact a professional financial or tax advisor before making financial decisions.

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