Learn the Differences between Identity Theft and Identity Fraud

by Joy Mali Writer

Savvy consumers have heard the terms ‘identity theft’ and ‘identity fraud’ tossed about in conversations about personal protection and keeping themselves safe from thieves who make their livelihood by stealing from others. While it’s crucial to understand these terms in order to become aware of the ways your personal data can be used and how these occurrences can affect you and your credit, knowing the subtle difference between identity theft and identity fraud can further help in not becoming a victim to either.

Identity theft vs. identity fraud—theft typically comes first

What is identity theft? Identity theft is when someone takes your personal identification data, such as your social security number, name, and birth date, and uses the information to assume your identity. Most of the time, identity thieves use the information to open credit lines or make purchases in your name, as if they were you. Identity fraud is typically not committed until the criminal has committed identity theft first. Once they have your personal data, they can then use it to commit fraudulent acts, such as making unauthorized purchases on a credit card they obtained in your name.

Identity fraud is the crime

While identity theft may be unethical, someone can collect your personal information and never do anything with it beyond that collection. Simply having the data is not a crime. However, when this person takes your information and uses it to make financial transactions or performs other fraudulent activities with it, they have then committed a crime. Fraud may also be committed in other ways besides through identity theft.

How to Prevent Identity Theft

Once you understand what identity theft is and how it occurs, you should take steps to prevent it by doing the following:

Don’t share your online passwords with anyone. If someone has this information, they can access your accounts, even social media, and pretend to be you. If they commit fraudulent acts, it may be difficult for you to prove you were not the person who did them and your reputation and credit can be damaged.
Shred all personal documents. Shred any documents you want to discard, especially those that contain any of your personal information. Thieves can use these documents to find out identifying information they can use to commit identity fraud.
Monitor your credit reports. Sometimes, identity thieves are able to get your personal information without your knowledge. If you monitor your credit reports on a regular basis, you can identify any fraudulent accounts opened using your identity before they can do maximum damage, and before you find yourself paying debts that don’t belong to you.
Don’t divulge personal information to un-authorized people. Banks and governmental agencies will never ask you for your password information or other secure information over the telephone or via email. If you ever get a request for this type of data, report the email or phone call to the proper authorities, as it is likely a scam.
Only use secure websites and protected internet connections. Data thieves frequent public internet connections for personal information they can use to commit crimes. They also set up websites that look like official companies, but which are really fronts for their criminal activities. Don’t enter your sensitive information onto websites that do not bear a secured seal or site address.

Stolen identity, what to do?

If you find that despite your best efforts you have still become the victim of identity theft and identity fraud, make sure to act quickly. Report the theft to one of the three credit reporting agencies (TransUnion, Equifax, or Experian) and request a fraud alert on your credit file. The agency you contact will then alert the other two credit bureau reporting entities. The fraud alert will ensure that any new lines of credit in your name will have to be identity verified through means only you can provide. Next, alert the creditors affected by the fraudulent activity. If you have a credit monitoring service or identity theft insurance, you also want to inform them of the activity.

Without the identity theft of your personal data to commit identity fraud with, criminals are forced to use the identity of someone else or a fake person they make up. Protect your information from thieves so you won’t become a victim of identity theft or make it easy for thieves to commit identity fraud.

Joy Mali is an active blogger who is fond of writing articles on identity theft and advising people how to identify the theft signs and prevent identity theft. Follow her on Twitter to know more on difference between identity theft and identity fraud.