Identity Fraud Explained

What is Identity Fraud?

Identity fraud involves pretending to be somebody else in order to steal money, credit, or get other benefits, such as jobs. Theft of personal reputations can cause serious problems for people, who must prove the theft to credit card companies, credit-reporting bureaus, insurance companies, friends, and families. For these reasons, identity fraud often causes greater problems for you than simple robberies.

How Do Criminals Steal Identities?

Criminals use many methods to obtain personal information. The simplest method involves stealing a wallet or purse. Despite warnings, many people write down their security PIN numbers, or sophisticated thieves could use high-tech methods to figure out your code and access your accounts. Personal details such as Social Security numbers, phone numbers, names, and addresses allow criminals to apply for credit under your name. In the age of instant electronic approvals, the crooks can direct the credit card company to mail materials to a different address. When the card arrives, all the crook needs to do is activate it and start making cash withdrawals.
Stealing personal information is big business. Thieves constantly look for ways to get this information. Unfortunately, catching these crooks remains low on the list of police priorities for many reasons:

  1. Catching scam artists poses serious challenges for law enforcement.
  2. Proving the case might be impossible, even when police find the criminal.
  3. Identity fraud can occur across state and national borders, creating jurisdictional questions.

Methods Criminals Use to Steal Information

Thieves come up with very creative ways to steal your personal information. More than nine million people fall victim to identity fraud each year. If you know how thieves steal your information, you can take measures to protect yourself.


Phishing happens when a scam artist pretends to represent a company or official agency. These scams happen by phone, mail, or email. Crooks could send a phony bill, and when you call to complain, they ask for your personal details to adjust their records. Phony websites that ask for your personal information create another way for criminals to get personal information. Crooks sometimes send official looking materials that pretend to come from your bank, credit card company, or utility provider, asking for confirmation of your personal data. Another clever variation involves running employment ads. People routinely supply personal information on job applications.


Spyware could be installed on your home computer in many ways. These unethical programs collect personal information that allows crooks to access your accounts, apply for credit in your name, or use your insurance information to pay for medical services.

Redirecting Your Mail

One simple method of stealing personal information is for thieves to file a change of address card under your name at the post office. Your mail gets forwarded to the crook’s post office box, and he or she can get a great deal of personal data from personal and business mail.


Skimming uses sophisticated scanners that can access the information on your credit card. Crooks design phony slots to look like real ATMs, gas pump readers, or card readers at the local grocery store. Another method of skimming involves video surveillance to record your credit information and PIN number when you use a credit card at legitimate locations.

Dumpster Diving

Dumpster diving refers to going through your trash to get personal information. The method often makes identity fraud amazingly easy. If you throw away a credit card offer that has been preapproved, then all the crook needs to do is accept the offer.

Identity Fraud Warning Signs

Identity fraud grows bigger every year, and anyone can decide to try the techniques if they come across someone’s personal information. Organized criminals use complex technology and sophisticated scams to steal your personal financial data. Sometimes, fraud victims do not discover the scam for years, and the criminal trail grows cold. However, you can fight back by taking precautions. The following warning signs might indicate you have been the victim of fraud:

  • Unexplained charges on your credit card or money missing from the bank could indicate fraud.
  • Unusual requests by phone, mail, or email requesting personal information should always be approached cautiously.
  • If you have trouble getting a loan when your credit is usually good, fraud may be the reason.
  • A sudden drop in your credit score often indicates fraud.
  • Requests from family or friends for money could be bogus, and you should always confirm them with a phone call.
  • Disturbances in your trash could indicate someone has been dumpster diving.
  • When redirected to a website, take down the information and log in directly if interested in making a purchase.

Play it Safe by Exercising Skepticism

The best ways to guard against identity theft involve staying aware of the risks and exercising a healthy dose of skepticism. Shred all mail with personal information. Confirm contact with companies by getting a direct phone number and returning the call. Safeguard your PIN numbers and never keep them with your credit cards. Check your credit scores and report any discrepancies. Cover your hand when entering your PIN. These simple protections can make it difficult for crooks to get your personal information.