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Credit fraud and Identity Theft are terms you hear is the news frequently. Unfortunately, they are often confused with each other. Credit or financial fraud is when someone uses your credit and account information. They may make charges on your credit, open new cards in your name or drain your bank accounts.
Identity theft is defined as the deliberate use of someone else’s identity (Links to an external site.), usually as a method to gain a financial advantage or obtain credit and other benefits in the other person’s name,[1] (Links to an external site.)[2] (Links to an external site.) and perhaps to the other person’s disadvantage or loss. The person whose identity has been assumed may suffer adverse consequences if they are held responsible for the perpetrator’s actions. Identity theft occurs when someone uses another’s personally identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes. In many cases the he criminal opens new credit, rents a house or apartment, purchases items, such as cars, furniture, computers, etc., and opens utilities and phone accounts, all in your name. They will often live like this for several months. They pay the bills they accrue, build your credit so they can make more purchases, and in many ways are a model citizen. Because they go to great effort keeping your credit good, having everything directed to a new address, they may go unnoticed for months or even years. One of the most common reasons for identity theft is to hide criminal activities, especially those that are run out of a house (i.e. drug labs, fencing stolen goods, prostitution, etc.). The criminal will stay in the house until they suspect that people are catching on. Then they walk away. When this happens, they generally leave a large amount of debt, they don’t stop the utilities or lease. They just disappear. The first you may hear of this is when debt collectors start calling. Debt collectors will often look up previous addresses and attempt to make contact that way. This would be your first indication that someone has stolen your identity. When the criminal walks away, they leave your credit in ruin, and in some cases, leave you with criminal charges to straighten out. Identity theft is a lot harder to recover from than simple credit fraud.
What do you think you will do differently to help protect your identity? Are you doing anything different now than you were at the same time last year?
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