How Identity Theft Works

Different Types Of Identity Theft Revealed

Knowing a little about how identity theft works can help us in avoiding identity theft and not becoming its next victim.

For several years now, much conversation has centered around ID theft, however, it's not something new. Throughout recorded history, thieves have been stealing the personal information of others to benefit themselves.

But, in today's computer age, ID theft has become pandemic.

As with other forms of fraud, ID theft involves the use of someone's personal information by the perpetrator, most often to gain money by some illicit means. However, there are other uses whereto stolen identities can be applied. Illegal immigrants have used stolen identities to prevent their deportation. Criminals have used stolen identities to prevent their crimes from showing up on their records. And ID theft has also been used to obtain prescription drugs and medical care.

How Are Personal Identities Stolen?

Before the advent of the computer, thieves wanting to steal identities resorted to what's called dumpster diving. That means they combed through the victim's garbage looking for any identity information they could use, such as credit card statements, cancelled checks, expired driver's licenses, addresses, phone numbers, and discarded credit card offers.

Some thieves also stole mail from household mail boxes in an effort to find personal information. Thanks to people's awareness, partly from knowing how identity theft works, these techniques are less fruitful today, but they are still used.

Pickpocketing is one of the oldest methods of identity theft. The theft of a wallet or purse could yield credit cards, a driver's license, a photo ID, an address, and sometimes a Social Security Card. By using modern technology, thieves achieve similar goals by compromising debit card readers and by remotely accessing information from RFID chips used in some passports and credit cards.

Identity Theft On The Computer

The widespread use of computers by businesses to store customer information has opened a new world of opportunities for tech-savvy identity thieves. A wealth of personal information can be obtained by hackers able to crack the security on such computers. Some merchants also send customer information to credit bureaus on tapes, CDs, and other removable media, offering another lucrative target for clever identity thieves versed in the latest technology.

"Phishing" has become a favorite technique of the high-tech identity thief. The technique can involve posing as a bank or credit card company and sending emails to its customer list, or to a general email list that might include some customers.

Those receiving the emails are asked to click a link to verify their information, however, instead of the link taking them to the bank's website, it takes them to a clever facsimile of the bank's website owned by the thief who retrieves and uses any personal information submitted by the unwary customer.

Avoiding Identity Theft

Knowing some of the ways how identity theft works can alert us to take precautions. However, thieves are always devising new ways to get the personal information they need. That's the reason it's important for us to keep a watchful eye on our credit reports. The damaging effects of identity theft can be minimized if we spot suspicious activity early.

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