To understand what identity theft is and how it affects all of us it is important to define identity theft. Once you have a true understanding of identity theft, you will be better prepared to cope with this potential theft. Remember, according to the FTC, nine million people are victims of identity theft every year.

What is Identity Theft?

The best way to define identity theft is to look at its results. Identity theft enables a criminal to make purchases, obtain legal documents, get a job or elude arrest by using a name, address, social security number and other personal information that belongs to someone else. Most of the time, the victim does not even realize their identity has been stolen until a collections company calls for payment or they find themselves under arrest for a crime someone else committed.

Stealing an Identity

One of the basics types of identity theft is to completely take over the personal information of a victim. The thief adopts the personal information as his own and will apply for credit cards, bank loans and phone services. Naturally, the criminal does not intend to pay for any of this and the victim is usually left with all the debt.

Stealing an Account

Another way to define identity theft is based on individual accounts. In this situation, a criminal gains access to a credit card account or bank account. The thief who has control of your credit card will make as many purchases as possible before you notice the activity or the credit limit is reached. A criminal who has access to your bank account will usually drain all the available cash, leaving you with a zero balance and plenty of bounced checks.

How They Steal

You can also define identity theft by the method used to obtain an identity. The most common way a thief will obtain information is still the old-fashioned method of purse snatching or pick pocketing. The downfall to this technique for the thief is that the victim usually notices the theft quickly and will cancel credit cards and possibly issue fraud alerts quickly. The second most popular method to steal an identity is stealing information during a transaction. This process is quite common in restaurants. For example, when you pay your bill with a credit or debit card, the waitperson will take the card to another location where the important information from the card can be copied by him or her. The thief can then get on a computer and make purchases with the card. To date, according to the Consumer Sentinel, an FTC publication, over $1 billion dollars has been lost by consumers to identity theft scams.

Being able to understand and define identity theft is the first step to arming yourself against this horrendous crime. Be prepared for someone to steal your whole identity or just gain access to a single account and remember to act fast to minimize the damage.