Identity theft is the stealing of another person’s personal or financial information in order to conduct fraud, such as making unlawful transactions or purchases, using that person’s identity. Identity theft may take numerous forms, with the most common consequences being harm to a victim’s credit, wealth, and reputation.
Identity theft, also known as identity fraud, occurs when a criminal obtains key pieces of personally identifiable information (PII), such as Social Security or driver’s license numbers, in order to impersonate someone else.
The stolen data can be used to rack up debt by applying for credit, buying goods and services in the victim’s name, or providing the thief with false credentials. An impostor may present fake identification to authorities in rare situations, resulting in a criminal record or outstanding arrest warrants for the individual whose identity has been stolen.
Different types of identity theft
The following are the two categories of identity theft:
True-name identity theft occurs when a thief utilizes personally identifiable information (PII) to create new accounts. To get blank checks, the burglar may start a new credit card account, establish a cellular phone service, or open a new bank account.
Account-takeover When an impostor utilizes PII to get access to a person’s current accounts, this is known as identity theft. Before the victim realizes there is an issue, the thief would usually change the postal address on an account and build up a debt. Because online transactions are done without any physical connection, the internet has made it simpler for identity thieves to exploit the information they’ve taken.
Identity theft can take a variety of forms, including:
Financial identity theft:- The most prevalent sort of identity theft is this. Financial identity theft is the use of a stolen identity to gain financial gain.
Tax-related identity theft:- The perpetrator files a fraudulent tax return with the Internal Revenue Service (IRS) using a stolen Social Security number, for example, in this sort of attack.
Medical identity theft:- This is where the burglar obtains personal information, such as health insurance member numbers, in order to obtain medical treatment. It’s possible that the victim’s health insurance provider will receive false bills. This will be reported as services received in the victim’s account.
Theft of identity by criminals:- In this case, a person who has been arrested provides the police with stolen identity information. If the exploit is effective, the victim will be held responsible rather than the thief.
Theft of a child’s identity:- A child’s Social Security number is used to apply for government assistance, create bank accounts, and other services in this attack. Because the harm may go undiscovered for a long period, criminals frequently seek the information of youngsters.
Senior identity theft:- People above the age of 60 are the target of this sort of scam. Senior adults are frequently targeted as easy targets for theft. Seniors must be aware of the ever-evolving tactics that criminals employ to acquire information.
For concealing:- identity cloning is used. In this scheme, a thief pretends to be someone else to avoid detection by law authorities or creditors. It’s difficult to trace since it isn’t necessarily monetarily motivated, and there isn’t always a paper trail for law enforcement to follow.
Theft of a false identity:- A thief fabricates an identity in this sort of attack by mixing different parts of PII from various sources to create a partial or complete identity. One stolen Social Security number, for example, maybe combined with an unrelated birthday. The acts of the thief have usually recorded files that do not belong to a real person, making this form of crime difficult to follow.
Methods of Identity Theft
Although an identity thief might hack into a database to collect PII, experts believe that the thief is more likely to gain information using social engineering approaches. The following are some of these methods:
The theft of credit card bills and junk mail from a victim’s mailbox or from public mailboxes on the street is known as mail theft.
Dumpster diving entails: An identity thief can easily obtain personal information by retrieving personal documents and abandoned mail from dumpsters. Preapproved credit card applications are frequently discarded without being shredded first, increasing the danger of credit card theft.
Shoulder surfing: When a thief gathers information while the victim fills out personal information on a form, enters a passcode on a keypad, or gives a credit card number over the phone, this is known as shoulder surfing.
Phishing is the practice of tricking people into giving up their personal information (PII) via email. Phishing emails may include attachments with malware meant to steal personally identifiable information (PII) or links to fake websites where consumers are asked to submit their information.
How to know if your personal information has been stolen
Equifax, a major credit bureau, had a data breach in 2017 that exposed the personal information of 147 million people. To assist the victims. A $425 million settlement was reached. Because of the large-scale losses and importance of the penetrated company, it is still considered by some to be the most serious case of identity theft in recent history. Equifax has a multitude of security flaws, which resulted in this hack.
Victims of identity theft may discover transactions from their bank accounts that were not made by them.
Their credit score may be affected.
They may not get bills or other critical mail-carrying sensitive information.
Victims discover erroneous accounts and charges on their credit reports.
They are denied coverage for health insurance because their medical records show they have a disease they don’t have.
They are alerted by the IRS that another tax return was filed in their name.
They are notified of a data breach at a firm that holds their personal information.
Effects and precautions
In addition to financial losses and debt, victims of identity theft may face significant intangible expenses. These include reputation and credit harm, which can make it difficult for victims to get credit or find work. Identity theft can take years to recover from, depending on the circumstances.
Experts recommend that people check their credit reports with major credit bureaus regularly, pay attention to billing cycles, and follow up with creditors if invoices do not come on time to protect themselves against identity theft.
Also, people should shred discarded financial documents and destroy unsolicited credit applications. They should also keep an eye out for unauthorized transactions on account statements. Avoid carrying Social Security cards or numbers on them and avoid giving out PII in response to unsolicited emails.
Many state attorney general websites also provide identity theft packages that teach consumers how to avoid and recover from identity theft. Documents and forms are included in some of the services. For example, the Identity Theft Affidavit is a document that is used to legally register a claim of identity theft with a company. This form is most commonly utilized when new accounts are made using a victim’s personal information, rather than when an existing account is fraudulently accessed.
Recovery from Identity Theft
Victims should contact the proper organization and alert them of the issue, depending on the sort of information taken. This might be a bank, a credit card firm, a health insurance company, or the Internal Revenue Service. To avoid additional fraudulent transactions, claims, or actions, victims should request that their accounts be frozen or canceled.
Identity theft victims in the United States should submit a complaint with the Federal Trade Commission (FTC) and notify one of the three main credit bureaus — Equifax, Experian, or TransUnion — to request a fraud alert or security freeze on their credit reports.
Victims can get a rehabilitation plan from the FTC website and put it into action. The strategy includes gathering the relevant paperwork and letters to assist the victim in their recovery.
If PII is compromised because of a data security breach, victims should inquire about what help and protections the organization have in place for them and their data.
Laws and punishments for identity theft
Various governments have different responses to identity theft offenses. The Identity Theft and Assumption Deterrence Act of 1998 and the Identity Theft Penalty Enhancement Act of 2004 outline the legal procedures around identity theft in the United States.
Knowingly transmitting or utilizing a means of identification with the purpose to conduct, aid or abet any criminal behavior that constitutes a violation of federal law or that constitutes a crime under any relevant state or local law,” according to the Identity Theft and Assumption Deterrence Act.
The Act also enhanced the length of sentences for both general and terrorism-related offenses to varying degrees. It also outlined the consequences of severe identity theft. Using another person’s identity to conduct offenses is known as aggravated identity theft.
Identity theft has a wide range of penalties that can be severe. They differ depending on the offense. The following are some of the punishments for identity theft:
If a thief commits the first crime and does not cause considerable harm, he or she may be sentenced to probation. Fines and reparations may still be due from those on probation.
The most prevalent punishment for criminals is the imposition of felony and misdemeanor charges.
The thief may be held liable for the victim’s financial damages, which might include lost earnings, legal bills, and mental anguish.
Identity thieves in the United States are frequently sentenced to jail, with a minimum penalty of two years for aggravated identity theft. The seriousness of the case raises the punishment.
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