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What is Identity Theft?

Identity theft is said to have been committed when an individual’s personal identifying information such as their name, social security number or bank account number is misused by another for fraudulent purposes. Identity theft is almost always committed to initiate other economic crimes including mortgage fraud, credit card fraud and a multitude of online scams.

Implications of Identity Theft

The most daunting aspect of identity theft is the ease with which it can be committed using various web tools and the difficulty involved in catching the online perpetrator.

With relatively little effort, an identity thief can use the personal identifying information for a host of crimes that could range from taking over existing credit accounts and creating new accounts to getting new credit cards and purchasing items online in the victim’s name. With these tools in the wrong hands, the potential for damage is monumental. This stolen information can also be used in evading law enforcement after having committed a violent crime.

Identity theft has even wider reaching implications when the stolen information is auctioned online to the highest bidder, resulting in the personal identifying information being used by several different perpetrators.

It is the surreptitious nature of the crime that lets it go unchecked till often irreparable damage has already been done. Most consumers are very often unaware that they have been defrauded or their personal information stolen until they receive notification from a creditor asking for repayment of a debt incurred in their name.

In worst-case scenarios, identity thieves have completely take over the victim’s identities, running up enormous debts and committing a spate of crimes in the victim’s names. Victims can find themselves not only trying to recover their financial losses but trying to restore their reputations as well.

Identity Theft Prevention Measures Being aware that it can happen and taking steps to prevent it from happening is the best that anyone can do to protect themselves from identity theft.

Never give out personal information such as credit card or bank number over the phone or the internet unless you are the one who initiated the contact
Always shred bank statements, ATM receipts and credit card statements into tiny pieces before throwing away in the thrash can
Report any unauthorized financial transactions to the relevant authorities as soon as you detect them
Check bank and credit card statements carefully and reconcile all accounts regularly. Immediately notify the bank or credit card company if there are any discrepancies
Ensure that you have absolute privacy when utilizing any ATM machine
Exercise extreme caution when using your credit card for online purchases or when engaging in internet banking.

Steps being taken by Authorities to Combat Identity Theft

Education forms a significant part of the prevention measures for online Identity thefts. The relevant government agencies including the FBI have launched several consumer education programs to make individuals more aware of the risks of leaving personal information unprotected on web.

In addition the President’s Identity Theft Task Force is working in collaboration with the FBI and other agencies to develop a system that will proactively target organized groups of identity thieves.

In an effort to stem identity theft, the financial services industry has also gone all out to make its financial products less vulnerable to fraud.

The Fraud Act 2006, which came into force in January 2007, includes all aspects of identity theft as an offence, whether the crime involved making a false representation with intent to make a gain or cause a loss to another, failing to disclose information or abuse of position.

Statistics for the Year 2006

FBI statistical accomplishments for Identity Theft reveal $156.5 million in Restitutions, $4.3 million in Recoveries and $1.2 million in Fines in the fiscal year 2006.

Despite such astounding figures, how many millions in identity theft went undetected and unrecovered during the same year remains an overwhelming question mark.