What is identity theft?

Identity theft is a form of cybercrime in which an unauthorized party illicitly acquires, manipulates, or exploits an individual’s personal information for fraudulent purposes. Identity theft is a grave violation of privacy and security, often leading to far-reaching consequences for the victim.

Usually, identity theft involves the misappropriation of various aspects of the victim’s identity, including but not limited to:

  • Name and date of birth
  • Social Security number (SSN)
  • Bank account numbers
  • Credit card details
  • Financial transaction records
  • Personal address 
  • Contact information
  • Usernames
  • Passwords

There can be several motivations behind identity theft. However, they often revolve around the pursuit of illicit gains. These motivations may include:

  • Financial gain. This can mean draining the victim’s bank accounts, making unauthorized purchases, or taking out loans in their names.
  • Access to resources. Identity thieves may target individuals with access to valuable resources, such as healthcare benefits or insurance coverage.
  • Committing crimes. Some criminals use stolen identities to carry out illegal activities so that their crimes can’t be traced back to them. This can include crimes like fraud, drug trafficking, and evading law enforcement.
  • Privacy invasion. In some cases, a perpetrator of identity theft may not be motivated by financial gain but simply by a desire to invade the victim’s privacy. This can manifest as stalking, harassment, and other forms of personal violation.

Types of identity theft

Depending on the motivations behind the identity theft, there are many different forms this crime can take. Here are some of the most common types of identity theft:

  1. Financial identity theft. Criminals acquire your financial information, including credit card numbers or bank account details, to make unauthorized purchases, withdraw funds, or take out loans.
  2. Social Security identity theft. Identity thieves target your SSN to gain access to government benefits, commit tax fraud, or open fraudulent credit accounts.
  3. Tax identity theft. This happens when someone uses your personal information to file fraudulent tax returns, claiming your tax refunds.
  4. Insurance identity theft. Some identity thieves may use your identity to file fraudulent health, auto, or other forms of insurance claims.
  5. Driver’s license identity theft. Criminals may use your identity to obtain a driver’s license or other forms of identification in your name, potentially involving you in traffic violations and other legal issues.
  6. Medical identity theft. Medical identity theft involves the use of your personal information to receive medical services, prescription drugs, or health insurance benefits.
  7. Synthetic identity theft. In synthetic identity theft, criminals create entirely fake identities by combining real and fake information.
  8. Child identity theft. Some identity thieves target minors, using their clean credit histories to commit financial fraud. This can be tricky to spot as victims may not discover the theft until they come of age and attempt to establish their own credit history.
  9. Criminal identity theft. This occurs when someone uses your identity when interacting with law enforcement, potentially leading to arrests, charges, or a criminal record in your name.
  10. Employment identity theft. Criminals may seek employment using your identity, potentially affecting your own employment history and tax liabilities.
  11. Utility identity theft. Identity thieves may open utility accounts, such as electricity or water, in your name, leaving you responsible for unpaid bills.
  12. Social media identity theft. This form of identity theft involves impersonating you on social media platforms, often to deceive or defraud others while damaging your reputation.

Warning signs of identity theft

The earlier you detect identity theft, the better your chances of minimizing the damage. You can do this by learning to recognize the warning signs that your personal information has been compromised and forming a habit of actively checking for these signs periodically. 

Here are some key red flags to watch for:

  1. Unfamiliar online shopping accounts and bills for purchases you haven’t made;
  2. Unfamiliar accounts on your bank statements;
  3. Debt collection for accounts you didn’t open;
  4. Credit report including information for accounts you didn’t open;
  5. Receiving pre-approved credit offers or cards you didn’t apply for; 
  6. IRS notification of duplicate tax returns;
  7. Denials of loan applications;
  8. Unexpected changes in health insurance claims;
  9. Mail missing from your mailbox;
  10. Missing personal documents;
  11. Suspicious emails or phone calls;
  12. Notification of a data breach;
  13. Unexplained withdrawals from your retirement accounts;
  14. Changes in your mailing address.

How identity theft happens

Identity theft can happen in a variety of ways. Being aware of all the possibilities can help with prevention. Here are some of the most common ways criminals can steal your identity:

  1. Data breaches. Many cybercriminals rely on data breaches to collect enough personal information to pull off identity theft. 
  2. Unsecure browsing. Visiting unsecured or compromised websites can expose your login credentials and personal information to hackers.
  3. Dark web marketplaces. If your personal information has been stolen, it may end up on the dark web. Criminals buy stolen personal information, including Social Security numbers and credit card details for illicit activities, including identity theft. Read this post to find out what to do if your phone number is on the dark web.
  4. Social media exploitation. Oversharing on social media platforms can give identity thieves access to the information they need, such as birthdates, family connections, and interests, to target you with convincing scams.
  5. Malware activity. Cybercriminals can infect your devices with malicious software that can capture keystrokes, login information, and personal data.
  6. Credit card theft. Some criminals may physically steal your credit card or make a surreptitious copy of the information.
  7. Mail theft. Some mail may contain highly sensitive information, including financial statements, checks, and credit card offers, which identity thieves can easily get from your mailbox.
  8. Dumpster diving. Thieves may sift through your trash for discarded documents that contain useful personal information.
  9. Phishing and spam attacks. Cybercriminals may use deceptive emails or messages to trick you into revealing personal information.
  10. Insider theft. In some cases, identity thieves can be someone you know, with access to your personal information. 
  11. Employee data theft. Employees in organizations with access to customer data may misuse your information.
  12. WiFi hacking. Hackers can easily break into public WiFi networks and poorly secured home networks, allowing them to intercept any data you transmit over these networks.
  13. Skimming. Some criminals attach devices that can read your credit card to ATMs or point-of-sale terminals to steal your card information during transactions.
  14. SIM card swapping. Identity thieves can contact your mobile carrier impersonating you and requesting a new SIM card for your phone number. Once they have control of your phone number, they can access accounts linked to it and intercept 2FA codes.
  15. Mobile phone theft. Criminals commonly steal mobile devices with the dual reward of selling them and trying to extract personal information. 
  16. Data mining and public records. Cybercriminals can use data brokers and people search sites to access free profiles or buy data in bulk. They can then use this information to steal your identity.

How to protect yourself from identity theft

Preventing identity theft requires both vigilance and proactive measures. Here are some practical steps you can take to help safeguard your personal and digital identities:

  1. Limit sharing your personal information to individuals who strictly need to have it.
  2. Consider freezing your credit to make it difficult for identity thieves to open new accounts in your name.
  3. Keep your Social Security number private, giving it out only when necessary, and avoid carrying your SSN card in your wallet.
  4. Watch out for phishing and spoofing and verify the legitimacy of any requests for personal information before responding.
  5. Use strong, complex passwords for all of your online accounts and devices, and avoid using easily guessable information like birthdays or common words.
  6. Enable 2FA for your online accounts whenever possible for an extra layer of security.
  7. Set up account alerts with your financial institutions and credit card companies to notify you in case of any suspicious or unusual activity.
  8. Lock your physical mailbox to prevent mail theft.
  9. Lock important documents like passports, birth certificates, and financial records in a secure, fireproof safe.
  10. Shred documents containing personal information before throwing them away to prevent dumpster divers from stealing them.
  11. Consider using a digital wallet app instead of carrying physical credit cards around for more secure mobile payments.
  12. Use a virtual private network (VPN) to encrypt your internet connection and protect your data from potential hackers, especially when accessing public WiFi networks.
  13. Use encrypted messaging apps for sensitive conversations to ensure your messages remain private.
  14. Review your credit reports from all three major credit bureaus at least once a year to catch any suspicious activity or inaccuracies.
  15. Opt out of pre-approved credit offers by calling 1-888-5-OPT-OUT or visiting optoutprescreen.com. This reduces the risk of mail theft. Is optoutprescreen a legit site? We answered the question here.
  16. Monitor your financial and medical statements by regularly reviewing your bank, credit card, and medical statements for any unauthorized transactions or charges.
  17. Use identity theft protection services that offer monitoring, alerts, and assistance in case of identity theft.

How to report identity theft

The sooner you report identity theft, the less time the criminals have to do more damage. Your report helps law enforcement agencies investigate and apprehend the thieves. It also establishes a record of the crime, making it easier for you to pursue restitution. 

Here’s how to report identity theft:

  1. File a police report, including all relevant information about the identity theft, details of the incident, and any evidence you have, with your local law enforcement agency. 
  2. Notify the Federal Trade Commission (FTC) by calling 1-877-438-4338 or through its website: www.identitytheft.gov. The FTC can provide guidance and resources to help you recover your identity and pursue legal action against the criminals. 
  3. Notify the three major credit bureaus and request a fraud alert or credit freeze on your accounts to prevent further unauthorized access.
    1. Equifax: www.equifax.com, 1-888-766-0008
    2. Experian: www.experian.com, 1-888-397-3742
    3. TransUnion: www.transunion.com, 1-800-680-7289
  4. Alert all of your financial institutions, credit card companies, and lenders. They can help you secure your accounts and investigate fraudulent transactions.
  5. Notify the Internal Revenue Service (IRS) if you suspect tax theft by calling 1-800-908-4490 or through its website: www.irs.gov. The IRS can help resolve issues related to fraudulent tax returns filed in your name.
  6. Report to the Social Security Administration (SSA) if your Social Security number has been compromised by calling 1-800-772-1213 or through their website: www.ssa.gov

Notify your insurance companies if you have been the victim of insurance identity theft.

Related online privacy terms


What is identity?

Identity is the set of unique characteristics and attributes that define an individual. It includes personal, social, cultural, and psychological elements that distinguish one person from another, as well as personally identifiable information (PII) that can be linked to an individual. 

What is identity protection?

Identity protection is any kind of tool or service designed to protect you from identity theft. It involves monitoring your accounts, sending fraud alerts, and providing identity theft insurance.  

What happens when someone steals your identity? 

If someone uses your address without your permission, you should report it to the local authorities and the postal service. You should also check your bank and credit card statements for any suspicious activity. 

Why is my tax return still processing? 

Your tax return may still be processing due to various factors, including high demand and errors. You can find out more details by contacting the IRS or checking the status online.

What do you do if someone steals your identity? 

If someone steals your identity, you should report it to your local law enforcement and credit bureaus. You should also submit a report to the FTC and get an identity theft recovery plan.

What are the 3 types of identity theft?

The three types of identity theft that are most common include financial identity theft, tax identity theft, and medical identity theft. 

Updated on: September 15, 2023

Is this article helpful?
Scroll to Top