Learn

Personal Resource Center
Back

What Is Identity Theft?

Trends in cybercrime come and go, but identity theft has been around for decades. The term "identity theft" predates the internet, with early uses popping up in the 1960s.1 The internet, of course, gave criminals an easier way to steal someone's identity than physically stealing documents. In 2023, nearly 20,000 people reported identity theft to the FBI, claiming losses totaling $126,203,809.2

How criminals commit identity crimes continues to evolve, from selling access to victims' grocery store reward points to selling fake rideshare and delivery service accounts.3,4 The Identity Theft Resource Center predicted 2024 could be a record-breaking year for identity theft based on a dramatic rise in data breaches.5 Here's what you should know about this long-enduring cybercrime.


What Is Identity Theft? (And What It Isn't.)

Federal Trade Commission (FTC) defines identity theft as "when someone uses information about you without your permission."6 It's no wonder the crime is so common when it covers so many things. The information a fraudster might use includes your name, address, Social Security number, financial accounts, insurance information — or even your voice.

Because the definition of identity theft is so broad, it's easy to assume it applies to just about any online fraud. But when a cyber-criminal directly receives a victim's money, perhaps after requesting funds during a romance scam, that is not considered identity fraud.


How Identity Theft Happens

Scammers can access victims' personal information in several ways, and they also do many different things with it once they have it. 

Ways criminals steal identities include:7

  • Phishing, Smishing, or Vishing – Using email (phishing), text (smishing), or phone call (vishing) to trick a victim into sharing personal data.

  • Fake Websites – Building a website that looks identical to a trusted organization's to trick visitors into submitting sensitive information. 

  • Data Breaches – A cyber attack on an organization that stores consumer data, such as a retailer or government organization, to steal massive amounts of personal information.

  • Physical Theft – Stealing identifying information found in discarded mail, stolen wallets, or other physical items.

  • Romance or confidence scams – Luring a victim into an online relationship, romantic or otherwise, to later request sensitive information.

  • Public Wi-Fi or USB charging station tampering – Hacking into devices that physically or wirelessly connect to unsecured public resources, including Wi-Fi and USB charging stations.
Bag of money icon
In 2023, nearly 20,000 people reported identity theft to the FBI, claiming losses totaling $126,203,809.

Common ways criminals use identity theft8 for financial gain include:

  • Social Security Fraud — Gaining access to someone's Social Security Number to open new financial accounts, collect government benefits, or other types of financial gain.

  • Tax Fraud – Using another person's Social Security number to file a phony tax return and steal the refund.

  • Medical Fraud – Using someone else's personal information to obtain medical services or submit fraudulent bills to a health insurance company.

  • Child ID Fraud — Stealing the identities of minors (who may not catch up to the deception until they become adults) and using their Social Security number to open bank or credit card accounts or apply for a loan, government benefits, rent, or utilities.

  • Senior ID theft – Using a senior citizen's personal information to fraudulently access their financial assets or benefits (usually committed by medical and long-term care services employees or caregivers who have access to a victim's personal information).

  • Biometric ID theft — Stealing fingerprint, facial, or voice recognition data to access a victim's device, accounts, or digital wallets.

  • Synthetic ID theft — A complex fraud that uses a victim's real consumer data and combines it with fictitious data to create a new, fake identity.

  • Unemployment Fraud — Stealing someone's identity to collect unemployment benefits in their name.

  • Dark Web Marketplace – Selling info on the Dark Web to other criminals.7

How To Protect Yourself

With so many ways for your personal information to be stolen, there's lots to do to keep yourself protected from identity theft. The tips below briefly describe some steps you can take. You can find more detailed info on each in our article 5 Ways to Protect Yourself From Identity Theft.

  • Watch for phishing attempts. Don't interact with suspicious emails, texts and phone calls.

  • Manage your mail. Shred all mail with sensitive information before throwing it away.

  • Use strong passwords. Protect your online accounts with complex passwords.

  • Keep important documents in a safe. Keep your Social Security card, passport and other sensitive documents in a safe.

  • Review your credit reports regularly. Use annualcreditreport.com to get a free copy of your credit report from the three national credit-reporting agencies: Experian, Equifax and TransUnion.9

  • Freeze your credit reports. If you learn about a data breach or other event that may have exposed your personal information, freeze your credit reports at Equifax, Experian and TransUnion.10,11,12 You can also freeze your National Consumer Telecommunications and Utilities Exchange (NCTUE), a separate report some mobile carriers use to check consumer credit.13

While protecting yourself from identity theft takes many steps, many of these actions are considered good overall internet hygiene. Once integrated into your routines, they can be easy, everyday habits that keep you and your family safe online.

Important disclosure information

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. OED, "Identity Theft," accessed August 28, 2024. Back
  2. Internet Crime Complaint Center, "Internet Crime Report 2023," FBI, published March 6, 2024. Accessed August 28, 2024. Back
  3. Amaya Kuznicki, "Grand Haven man facing multiple identity theft charges stemming from stolen ‘mPerks’ points," WILX News 10, published January 4, 2024. Accessed August 28, 2024. Back
  4. The Herald News, "Former Fall River man gets 32 months in prison for nationwide identity theft fraud scheme," published January 31. Accessed August 28, 2024. Back
  5. Identity Theft Resource Center, "Identity Theft Resource Center 2024 Predictions." Accessed August 28, 2024. Back
  6. Federal Trade Commission, "Avoiding Identity Theft," Consumer.gov. Accessed August 28, 2024. Back
  7. ID Watchdog, "11 Ways Identity Theft Can Happen.” Accessed August 28, 2024. Back
  8. Marianne Hayes, "20 Different Types of Identity Theft and Fraud," published November 7, 2023. August 28, 2024. Back
  9. AnnualCreditReport.com, accessed August 28, 2024. Back
  10. Equifax, "Security Freeze," accessed March 11, 2024. Back
  11. Experian, "Freeze your credit file for free," accessed March 11, 2024. Back
  12. TransUnion, "Credit Freeze," accessed March 11, 2024. Back
  13. National Consumer Telecommunications and Utilities Exchange (NCTUE), "Exchange Service Center," accessed March 11, 2024. Back