Identity theft occurs when someone uses another person's personal information such as name, social security number, driver's license number, credit card number or other identifying information to take on that person's identity in order to commit fraud or other crime. For example, someone could obtain private information (name, address, social security number, mother's maiden name, password) and use it to establish unauthorized credit.
Information is often obtained by using social engineering techniques. The term "social engineering" refers to techniques that rely on weaknesses in people rather than weaknesses in software; the aim is to trick people into revealing passwords or other useful information. This is accomplished by various methods including in person, over the phone, via e-mail or via Web sites. Social engineering relies on a person’s inability to keep up with a culture that relies heavily on information technology. Social engineers rely on the fact that people are not aware of the value of the information they possess and are careless about protecting it.
Online people-finder services such as Any Who or US Search have made it very easy to obtain personal information. Once an identity thief has a name and address, they can go to an "online detective", pay a small fee and get additional information about an individual. Some sites even offer to find social security numbers based solely on name and address.
Account theft is a variation of identity fraud and occurs when a person attempts to take control of a user ID and/or password (log-in/sign-in information) that is used for online commerce.
The Identity Theft and Assumption Deterrence Act of 1998 (Title 18 United States Code - Section 1028) legally defines both identity theft (knowingly possessing an identification document other than one issued lawfully for the use of the possessor) and identity fraud (knowingly possessing a false identification document) and sets punishments for both. Most criminal cases force prosecutors to show, beyond a reasonable doubt, that the defendant committed the crime in question, but identity theft cases force the victim to prove their innocence by proving their identity. Once that battle is won, the person must also clear their name of all the bad-credit ties. Unlike most crimes, if a thief steals an identity, it is the individual whose identity has been stolen who is responsible for recovering it.
If you have reasons to believe your personal information has been compromised or stolen, visit the Identity Theft Resource Center of the Federal Trade Commission. There you will find the latest advice and resources for detecting and defending against identity theft.
You may also contact the three major credit bureaus: