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What are the Different Types of Identity Theft?

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  • Written By: Dale Marshall
  • Edited By: Kristen Osborne
  • Last Modified Date: 17 November 2016
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Identify theft is one of a number of different methods criminals employ to steal, either directly from those whose identity is stolen, or from third parties, the private information of a person or people for illegal use. There are different types of identity theft, with the common feature being the criminal's fraudulent use of personal identifying information not his own. Identity theft is used to steal directly from the victim's financial accounts, to obtain goods or services under the victim's name, or actually to claim the victim's identity, among others.

One of the most commonly known types of identity theft is financial identity theft, which involves obtaining the identifying data necessary to access the victim's own financial accounts at banks and brokerages, and then raiding them. Brokerage accounts worth millions of dollars have been liquidated and stolen by identity thieves.

A form of financial identity theft, credit identify theft, involves using the identification and financial data of real people to establish fraudulent credit accounts. A great deal of effort goes into obtaining the confidential information necessary to open new accounts, and crimes involving identity theft are perpetrated far more often by criminal organizations than by criminals acting on their own.

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Criminals will buy expensive consumer goods using as many credit accounts as they can open until the credit limits are reached, usually within a day or two. The goods they purchase generally are then sold for cash. Unless the victim has some identity theft protection mechanism in place, the crime might not be detected until he applies for a new line of credit himself, or he's served with papers advising him that he's being sued by the credit card company for nonpayment. This time lag between the theft and its discovery makes this one of the most popular types of identity theft for criminals.

One of the most malicious types of identity theft is called criminal identity theft, where a criminal presents false identification to authorities when arrested. In some cases, the false identification presented may be simply a hastily-prepared fake ID card, but in other cases it will be some form of easily-obtained state identification the criminal applied for using stolen information or documents. The arrest is recorded in the victim's name, not the criminal's, and the results can be wide-ranging and devastating. Victims of this form of identity theft often spend years trying to clear their names, in the process sometimes losing good credit ratings and even employment.

Of all the types of identity theft, the one that can be the most benign is identity cloning, which involves someone assuming another person's identity entirely in daily life. There is a wide variety of reasons people will perpetrate identity cloning, but perhaps the most common is to conceal a person's immigration status. This form of identity theft can continue for many years without being detected, especially if the criminal isn't employed.

Of all the types of identity theft, medical identity theft carries the greatest potential for being life-threatening, because the victim's identifying information is assumed by the criminal in order to obtain medical insurance or treatment. Information entered into medical records based on such incidents could have potentially disastrous effects for the victim. For example, if the criminal has cancer and employs medical identity theft to obtain treatment, the details would be entered on the victim's medical records, possibly jeopardizing his future insurability and even employment.

Synthetic identity theft is one of the types of identity theft that's particularly vexing because it's much more difficult to identify and prevent. Synthetic identity theft involves a mix of real and made-up information, such as a real ID number with a made-up name and address. This type of identity theft harms individuals only when their names become associated with a credit account established as a result of synthetic identity theft.

In most American states, as well as many nations worldwide, the most effective defense against most forms of identity theft is a credit freeze, under which each individual has absolute control over who sees the credit reports issued by credit bureaus. Since credit issuers won't extend credit without a credit report, this system is almost foolproof in the prevention of credit identity theft and some other types of identity theft as well.

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bear78
Post 3

@fBoyle-- I'm not sure about the US specifically, but identity theft or identity cloning is a common problem across the globe.

For example, I know that in some developing countries where elections are not carried out according to the rules, people use others' identities to vote. This is often done by paid supporters of a candidate who take on identities of dead or ill individuals and register to vote with them. It sounds unbelievable, but it really happens in some places.

fBoyle
Post 2

Is identity cloning common in the US? It seems like the least common type of identity theft to me because it's easy to get caught. It's a popular theme in films, but I don't think it's a major issue in reality. Am I wrong?

ysmina
Post 1

My credit card information was stolen and used several years ago. Thankfully, I have the habit of checking my bank account summary and balance frequently. So I noticed the charges right away and called up my bank. My bank has fraud protection, which I didn't even know about until then, but I'm so glad that they do. So they refunded the charges to me.

Several days later, there were more charges on my account and I called the bank again. They went ahead and canceled my card and issued me a new one.

I have become more careful ever since this incident. I don't use my credit card information for online purchases anymore. I use a payment system where I can pay without giving out my information. I think that's the safest way to shop online.

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