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You may be hearing a lot about identity theft scams these days, but exactly what is identity theft?
A concise definition of identity theft is “the use of someone's personal information without his or her knowledge.” This information is used to access bank accounts, apply for loans and credit cards, and make unauthorized purchases. Credit card fraud is the most widely known type of identity theft, but by no means where the trouble begins and ends. Identity theft is one of today's fastest growing financial crimes.
In the “old days” identity theft was primarily a crime committed in the physical world. In addition to pilfering actual credit cards, credit card numbers were stolen from the discarded carbon copies of credit slips run through a manual credit card machine. And thieves rummaged through trash cans and dumpsters to find tossed out bank and credit card statements and any documents with personal information.
Today, in addition to new and sophisticated ways to commit identity theft offline, the virtual world provides an ever-greater opportunity for thieves to steal your personal information online with “phishing” scams. Worse yet, phishing thieves may be the ones who steal your information but, instead of using it themselves, it is sold to others on a financial black market, guaranteed to wreak havoc with your credit history.
The fact is that identity theft affects nearly 10 million Americans every year. Chances are good that, if you haven't been a victim of identity theft yourself, you know someone who has been. Education is the key to prevention and protection from becoming an identity theft victim.