Credit Cards and Identity Theft

Written by: Charles Parker

Identity theft is a prevalent issue for consumers. Identity theft involves the fraudulent access and use of someone else's personal or financial data. Current identity theft statistics indicate that 12.7 million United States consumers experienced some type of identity theft in 2014. This resulted in the theft of $16 billion. A new incident of identity fraud occurred about every two seconds in 2014. With the prevalence of identity theft, it's crucial for consumers to protect themselves and their financial information to prevent compromising their data. Significant damage to one's credit history and financial losses are two common results of identity theft.

What Is Identity Theft?

Identity theft is the acquisition of someone else's personal or financial information. This information can include details such as someone's name, address, and phone number. It can also include one's birth date, Social Security number, and mother's maiden name because this information is typically used to open new credit accounts. Identity thieves might also steal financial information and account passwords to access current accounts or to set up new accounts in someone else's name. Identity theft can occur in many different ways, including theft of mail, email phishing schemes, and through Internet activity.

Ways Your Identity Can Be Stolen

Identity theft can involve a number of different types of crimes. Some identity theft might occur through fraudulent emails or text messages that ask consumers to verify their personal information. A thief could also engage in "Dumpster diving," which involves stealing someone's trash to obtain personal information such as Social Security numbers contained in discarded documents. An identity thief might steal mail such as offers to compare credit cards to access your financial or personal information. Another ruse involves calling a victim to ask for their personal or financial information over the phone. Some thieves steal sensitive information stored on a computer or mobile device that can give the thief access to bank accounts. Tax-related identity theft involves stealing a Social Security number and using it to file a fraudulent income tax return. Stealing a wallet or purse is another common method of identity theft because the thief can then use your credit cards to take your money and even access your bank accounts. Thieves may also target social media websites and companies that possess consumers' personal or financial information, stealing the data to commit identity theft.

Thieves are also adopting more advanced methods for stealing financial and personal information. For example, scanning devices may be installed on gasoline pumps, ATMs, and payment devices at checkouts. These devices enable thieves to copy credit or debit card numbers. After copying the numbers, thieves can then use these accounts for their own purchases. Consumers should look carefully before scanning a credit card to ensure that the scanner does not have an extra device attached to it.

How to Prevent Identity Theft

Although identity theft is common, consumers can take steps to safeguard their personal information. It's crucial to store financial records in a safe place and to avoid giving out your Social Security number. Consumers should never give out personal or financial information to people who call claiming to represent companies or financial institutions. It is also important to never allow a phone conversation that involves stating financial information to be overheard by others. For security, do not carry your Social Security card in a wallet or purse, as it could be stolen. Always burn or shred papers containing personal and financial information before discarding them. Additional security measures include verifying the security of a website before entering personal information, removing your name from pre-approved credit card solicitation lists, and choosing secure passwords for websites and credit card accounts.

Miscellaneous Identity Theft Information

  • What Is Identity Theft? (video): Identity theft is a common occurrence that involves the theft of personal or financial information.
  • What Are Identity Theft and Identity Fraud? Identity theft and fraud involve stealing and using someone else's identity, usually for financial gain.
  • Identity Theft Overview: A thief might steal someone's name, Social Security number, date of birth, or account numbers to commit fraud.
  • Identity Theft: Identity thieves might use someone else's personal information to apply for credit or to file taxes.
  • Identity Theft and Your Social Security Number (PDF): Anytime someone asks you for your Social Security number, you should ask why it's needed and how it will be used to safeguard this information.
  • Identity Theft Overview: Identity theft might involve someone using someone else's personal information to open a new bank account and make purchases.
  • What Is Identity Theft? When a thief uses someone else's personal information, it may even be possible to rent an apartment or file a tax return.
  • Identity Theft: Make Sure You're Not a Victim! Estimates indicate that one out of every 20 people in America could be at risk of identity theft.
  • What Is Identity Theft? (PDF): Identity theft can result in many types of serious financial problems that can cause significant damage to someone's credit history.
  • Identity Theft: Financial loss is one common result of identity theft because a thief might steal money out of bank accounts.
  • Identity Theft Overview: Identity theft might also involve the theft of someone's driver's license number.
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