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Reduce the risk of identity theft

Types of Identity Theft

Identity theft is unavoidable in today’s day in age, and here are many reasons why identity thieves target your personal information. From financial gain to malicious motives, here are some of the most common forms of identity theft and steps you can take to mitigate your risk.

Financial Identity Theft

Financial identity theft is by far the most common type of identity theft. In 2014, identity thieves stole $16 billion from 12.7 million identity fraud victims, according to Javelin Strategy & Research. In most cases, the identity thief is trying to get a credit card, loan, or simply buy things by claiming to be someone else. This can be extremely damaging to a victim’s credit score and their ability to get a loan in the future. It’s important to check your credit history regularly to ensure it contains accurate information. If you do not recognize creditors or inquiries against your credit file, this could be a sign of identity theft.

Medical Identity Theft

Medical identity theft occurs when someone uses another individual’s personally identifiable information to fraudulently obtain medical service, prescription drugs or medical insurance coverage. This type of identity theft can be a costly and complicated crime to resolve. Ponemon Institute reports that the majority of medical identity theft victims paid an average of $13,500 to resolve the crime. While most types of identity theft leave victims with financial damage, medical identity theft can also result in the identity thief’s medical history being added to the victim’s medical records. Inaccurate medical records are difficult to correct and may keep the victim from getting the appropriate insurance coverage or medical care they need.

Criminal Identity Theft

Criminal identity theft usually happens when someone gives false information to police at the time they are arrested. Sometimes, criminals will get state-issued identity documents using credentials that they have stolen from someone else, or they have simply created a fake ID. If this type of fraud works, the criminal charges could be filed against the identity theft victim, and the real criminal may be off the hook.

Most victims of criminal identity theft learn about the incidents by chance. For example, they may receive a court summons, find that their driver’s license has been suspended when they are stopped for minor traffic violations, or possibly through employment background checks.

It can be very difficult for the victim of a criminal identity theft to clear their record. The steps differ depending on the jurisdiction where the crime occurred. If the true identity of the criminal cannot be determined, clearing the record can take even more time. The victim might need to track down the police officers who made the original arrest and prove their own identity. They may also need to attend a court hearing to be cleared of the charges.

As a result of criminal identity theft, police will sometimes list the victim’s name as an alias for the criminal’s true identity in their records. Victims of criminal identity theft may often find that some sources still have incorrect criminal records in their databases even after it has been cleared by courts and the police records are corrected. Because of that, future background checks might even show false criminal records.

Child Identity Theft

Child identity theft happens when someone steals or misuses a minor’s personal information. In many cases, an identity thief starts by using a child’s Social Security number to open lines of credit, obtain driver’s licenses, or even buy a house using a child’s identity. The Social Security numbers of children are often extremely valuable because they do not have any information associated with them yet. They are a blank slate. This type of fraud can go undetected for years because most children don’t discover the problem until they become adults. Sometimes, the impostor can be a family member or a friend who sees an opportunity to claim benefits by using a minor’s identity.  Child identity theft is fairly common and the problem is growing.

Identity Cloning & Concealment

With identity cloning, the identity thief is usually attempting to impersonate someone else so they can simply hide their true identity. These may be people who are hiding from creditors, illegal immigrants, or people who just want to become “anonymous” for other reasons. A minor form of this are people who use the photos of someone else on social networks to pose as someone else. Unlike financial identity theft which is usually exposed when the debts pile up, identity cloning for concealment may go on forever without being detected. This is especially true if the identity thief can get false credentials to pass authentication tests.

Synthetic Identity Theft

Synthetic identity theft is a type of identity theft where identities are completely or partially fabricated. This usually means the thief combines a real Social Security number with a name and birthdate that don’t match those listed with the number. Synthetic identity theft is sometimes more difficult to recognize because it usually doesn’t show up on the victim’s credit report directly. Often, the credit report becomes a completely new file with the credit bureau or possibly as a sub-file on just one of the victim’s credit reports. The primary victim of synthetic identity theft are the creditors who grant the lines of credit. Individual victims are usually affected if their name gets confused with a synthetic identity, or if negative information in a credit report sub-file damages their credit score.

Mitigate Your Risk

There are numerous types of identity theft, which is why monitoring your identity is so important. Using credit monitoring and identity monitoring services can help flag fraudulent activity, so that you understand what information may be at risk. Check out our Identity Theft Education Center to learn more about what you can do to minimize your risk.

This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal issues or financial issues involved with credit decisions.

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