How It Happens: Identity Theft 101 - Part 1

Your Identity’s Been Stolen

Finding out your identity has been stolen is a shock. Everyone finds out the hard way. You may apply for a loan only to be turned down because your credit – which you thought was immaculate – is in shambles. Or you receive a past-due notice from the IRS for thousands of dollars on wages you never earned.

It doesn’t matter how you find out. When you realize your identity has been stolen you’ll experience every emotion known to man. It starts with shock and quickly graduates to anger but before it’s over you’ll feel downright defeated and probably ashamed, too.

There’s no reason to feel ashamed. But most people do, because they have no idea how their identity was compromised. For example, a news anchor in Nashville, TN learned his identity had been grabbed more than a decade before he found out about the crime. And the only reason he found out was because the illegal immigrants that were using his name and Social Security Number fell on hard times and couldn’t pay the bills they had created using the false information.

Imagine someone using your identity for more than 10 years without your knowledge. It’s a tough fact to learn, but it happens more often than any of us would like to think.
It’s More Than Simple Credit Card Fraud

The problem with identity theft is that in most cases, it takes a while to learn your identity has been nabbed. True identity theft – when someone steals your personal information for the purpose of creating or taking over accounts that belong to you or even to become ‘you’ – is a crime that can take some time to complete. Thieves must first acquire the right information about you, and then the accounts have to be changed or established.

What you hear called identity theft most often is actually credit card fraud. That’s when someone steals account information with the purpose of using your credit accounts for fraudulent charges. Credit fraud might show up on your credit card statement within hours of the actual theft happening. But with identity theft, it can take 30 days to 10 years or longer for evidence that your identity has been compromised to become evident.

That’s because an identity theft has a different purpose in mind. The thief isn’t looking for a quick buck. Instead he or she is looking for a long-term pay-off on what can sometimes be a time consuming investment.

The long-term advantage to identity theft can be pretty impressive. A thief gathers identifying information about you which can then be used to secure mortgages, open new credit accounts, set up utility accounts, and even land jobs. Most often, this type of identity theft is used to supply illegal immigrants with new, legal identities in the US. And since most immigrants really want to be honest, upstanding citizens, they’ll use your information responsibly.

It’s usually some unexpected problem that outs the theft – loss of a job, a misunderstanding of tax laws, legal problems, or even a tragedy that leaves unpaid bills in your name. But the methods used to gather your information are the same as those used for credit card fraud, which is why the two crimes are usually lumped under the heading ‘Identity Theft.’
How Identity Theft Happens

At the core, identity theft and credit card fraud are both results of the same actions. It starts when a criminal gains access to your personal information. That information includes your full name, date of birth, Social Security Number, address, telephone number, and the names of your family including parents and children.
In today’s world, a lot of that information can be gained with little more than digging through your trash and even engaging you in conversation in the grocery store line. For example, identity thieves will go through your trash and gather credit card statements, bank statements, and personal correspondence. This documents usually contain nearly everything they need.

To get the last few bits of information, a conversation at the grocery store or even a telephone call to your home usually works. These criminals are great con artists. They know what questions to ask and how to phrase those questions to get you to spill your guts. Before you know it, you’ve told someone you don’t even know your whole life story.

After that, all that’s left is to begin the process of creating another you on paper. They create new accounts, order copies of your Social Security card and birth certificate, and secure a new job in another state. And it’s done. Someone else who looks nothing like in you in real life is your exact duplicate in the paper and cyber world.

Of course, that’s not the only way to get your information. Phishing emails, spoofed web sites, telephone surveys, and even old-fashioned breaking and entering or purse/wallet snatching are also methods that identity thieves use. Even your medical records and employee records at your place of employment put you at risk.

Most concerning is the places that aren’t obvious where your identity can be snatched without notice. Remember the news anchor from Nashville? After a lot of investigating on his own, he eventually learned that his identity had been stolen when he applied for a private pilot’s license.

Others have learned that family or friends sold their identifying information. And many never figure out what happened. The one consistent factor in every case of identity theft is that it happens when you least expect it, usually in a place where you feel safe.

By Jerri Ledford, About.com