Identity theft occurs when a criminal uses someone else's personal identifying details, such as their name, social security number, birth date to assume their identity or access their accounts for the purpose of committing fraud, receiving benefits, or gaining financially in some way.

Learn to nagivate identity theft and understand its mechanisms, identify red flags, and learn preventive measures to shield your personal and financial wellbeing.


What is identity theft? 

Identity theft occurs when someone unlawfully acquires your personal information—such as your name, Social Security Number, or financial details—and uses it without your authorization. This can manifest in various forms, including unauthorized transactions, the opening of new accounts in your name, or even using your identity in dealings with law enforcement.

The repercussions of identity theft extend beyond mere financial inconvenience; it can severely impact your credit score, expose you to unwarranted legal issues, and—in very extreme circumstances—lead to the corruption of your medical records with potentially life-threatening consequences.

The threat of identity theft looms large for everyone, yet there are measures you can take to shield yourself from becoming a target. Vigilant monitoring of your financial transactions and regular reviews of your credit report are critical first steps in detection. Furthermore, understanding the strategies for preventing identity theft and being aware of the steps to take should you find yourself a victim are essential for safeguarding your identity and maintaining your peace of mind.

Recovering from identity theft demands considerable effort and time to rectify the financial and reputational damage inflicted. It involves disputing unauthorized transactions and accounts, correcting inaccuracies in your credit and medical records, and possibly dealing with legal misunderstandings that could arise from crimes committed in your name.

By adopting proactive measures to protect your personal information and staying informed about the risks and remedies associated with identity theft, you can significantly mitigate the impact it may have on your life and ensure the security of your financial and personal wellbeing.

How does identity theft work? 

Following our overview of identity theft, let’s delve into the mechanics of how these crimes typically unfold. The process is multifaceted, with the thief’s ultimate goal being to use your personal information for illicit gain. Here’s a straightforward explanation suitable for those new to the concept or concerned about potential victimization.

Collecting personal information

The initial phase of identity theft revolves around the unauthorized collection of your personal information. Thieves employ a variety of methods to accomplish this, such as:

  • Phishing: Sending deceptive phishing emails or text messages that mimic legitimate organizations or individuals, coaxing recipients into revealing sensitive data.
  • Data breaches: Exploiting security gaps in databases to access a treasure trove of personal information from unsuspecting victims. Thieves often look for easier access points into your digital life, such as outdated software or unprotected personal accounts.
  • Physical theft: Stealing wallets, mail, or documents from homes or cars to obtain IDs, credit cards, and personal documents.

Utilizing stolen information

With your personal details in hand, the thief can now proceed to misuse this information in several ways:

  • Opening new accounts: Using your name and credit information to open new credit card accounts or loans.
  • Medical identity theft: Obtaining medical care or prescriptions under your identity, potentially altering your medical records.
  • Criminal identity theft: Presenting your information to law enforcement during an arrest, which could lead to a warrant issued in your name for a crime you didn’t commit.

Concealing their activities

Identity thieves often cover their tracks to delay detection, allowing them to maximize their misuse of your identity. This might include:

  • Changing addresses: Diverting billing statements to different addresses to prevent you from noticing unauthorized accounts or charges.
  • Online anonymity: Utilizing technology to mask their location and identity, making it challenging for authorities to trace their activities.

The impact

The consequences of identity theft can be devastating, affecting not just your financial health but also potentially leading to legal complications and medical record inaccuracies that can take years to resolve.

Understanding how identity theft works is the first step toward safeguarding your information. Awareness of the common tactics used by thieves helps you stay vigilant and adopt practices that protect your personal data, minimizing the risk of becoming a victim.

Signs of identity theft

Becoming aware of the warning signs of identity theft is crucial in detecting and addressing it promptly. Identity theft can be insidious, often going unnoticed until significant damage is done. Here are some red flags that could indicate your personal information has been compromised:

  • Unexpected credit cards: If you start receiving credit cards in the mail that you didn’t apply for, it’s a clear sign someone else might be using your identity to open new accounts.
  • Mysterious charges: Keep an eye out for strange charges on your bank or credit card statements. Transactions you don’t recognize could mean someone has gained unauthorized access to your accounts.
  • Unfamiliar bills or collection notices: Receiving bills or collection letters for orders or services you didn’t purchase, especially from companies you’ve never interacted with, is a telltale sign of identity theft.
  • Loan rejection letters: If you’re getting rejection letters for loans or credit applications you never submitted, it’s likely that someone is applying for credit in your name.
  • Notices of activities in unfamiliar places: Alerts or communications indicating activities—such as travel, residency, or transactions—in places you have no connection to should raise suspicions.
  • Unexplained debt collection calls: Receiving calls from debt collectors or businesses about debts for purchases you didn’t make is a strong indication of identity theft.
  • Missing mail: An interruption in receiving your usual bills or mail could suggest that an identity thief has changed your billing address to hide their tracks.
  • IRS notifications (if you’re in the US): Warnings from the IRS (Internal Revenue Service) about unreported income or multiple tax returns filed under your name are serious red flags indicating potential identity fraud.

Being vigilant and recognizing these warning signs early can help you take swift action to mitigate the impact of identity theft. Regular monitoring of your financial statements, credit reports, and personal information can play a significant role in protecting yourself from becoming a victim of this increasingly common crime.

How to protect yourself from identity theft

Protecting yourself from identity theft is crucial in today’s digital world. By taking proactive steps, you can significantly lower the chances of becoming a victim:

  • Use strong, unique passwords for each account: Employ complex passwords that blend letters, numbers, and symbols. A password manager can assist in managing and securely storing these. Use our free password generator to create a unique, strong password.
  • Enable two-factor authentication (2FA): This adds an additional security layer to your accounts. Even if a hacker figures out your password, they would still need a second form of identification to access your account.
  • Securely store sensitive documents: Keep personal documents in a safe place and shred them before disposal, including bank statements, utility bills, and any documents with personal information.
  • Be cautious with public Wi-Fi: Use a virtual private network (VPN) when on unsecured public networks to encrypt your online activity and protect your data from eavesdroppers.
  • Limit personal information shared online: Adjust your social media settings to private and be mindful of the personal details you share publicly, reducing the amount of information available to identity thieves.
  • Regularly update your software: Keeping your operating system and applications up-to-date with the latest security patches minimizes vulnerabilities that hackers could exploit.
  • Consider identity theft protection services: For added security, these services monitor your credit and alert you to any unusual activity, providing an extra defense layer against identity fraud.

How to report identity theft

If you suspect that your identity has been stolen, taking immediate and decisive action is crucial. Here is a step-by-step guide to reporting identity theft:

  1. Contact the Federal Trade Commission (FTC) – if you’re in the US:
    • Visit to report the theft online. This platform offers tailored recovery plans based on your situation.
    • Alternatively, call the FTC at 1-877-438-4338 to report the theft and obtain advice on your next steps.
    • If you’re outside of the US, research the appropriate agencies in your country.
  2. Notify the credit reporting agencies
    • Contact each of the three major credit reporting agencies in the US—Equifax, Experian, and TransUnion—to place a fraud alert on your credit reports. This step makes it more difficult for the thief to open new accounts in your name. If you’re outside of the US, research the appropriate agencies in your country.
    • Consider requesting a credit freeze, which restricts access to your credit report and further prevents new account openings.
  3. Inform your financial institutions
    • Reach out to your bank, credit card issuers, and any other financial institutions where you have accounts. Inform them of the identity theft and follow their instructions to secure your accounts.
  4. File a police report
    • Though not always required, a police report can be a valuable document in disputing fraudulent charges and accounts. Visit your local police department with a copy of the FTC Identity Theft Report, any other evidence of the theft, and a government-issued ID.

By following these steps, you can effectively alert the necessary parties about the theft and take significant strides toward recovering your identity. Each step plays a crucial role in the recovery process, helping to limit the damage and begin the restoration of your financial and personal security.

How you should respond to identity theft

If you suspect you’ve become a victim of identity theft, act swiftly to minimize the damage and secure your information:

  • Check your digital footprint: to see what information has been exposed. Our digital footprint scanner checks your digital footprint exposure even on Dark Web. Also, see Dark Web Scanner.
  • Immediately secure your devices: Use reputable antivirus software to remove any malware. Make sure all your software is up to date to prevent further breaches.
  • Alert financial institutions: Contact your bank and credit card companies to inform them of the suspected identity theft. Request to secure your accounts by placing freezes or restrictions on them to stop further fraudulent activity.
  • Report to authorities: File a detailed identity theft report with the Federal Trade Commission (FTC) via (in the US) or by calling their hotline. Additionally, consider filing a police report for an official record, which can be helpful in resolving disputes with creditors.
  • Set up fraud alerts and a credit freeze: Reach out to the three major credit reporting agencies—Equifax, Experian, and TransUnion—to place fraud alerts on your credit reports. This action makes it more challenging for identity thieves to open new accounts in your name. A credit freeze offers even higher security by restricting access to your credit report.
  • Replace stolen IDs: If your identification documents were stolen or compromised, contact the relevant agencies to get replacements. This includes your driver’s license, passport, and Social Security card.
  • Consider credit monitoring services: Many institutions offer credit monitoring services for free following an identity theft incident. These services keep you informed about changes in your credit report, helping you stay ahead of potential fraud.
  • Stay vigilant: Continuously review your credit reports and bank statements. Use multi-factor authentication wherever possible to ensure an extra layer of security on your accounts.
  • Invest in Identity Theft Protection: choose the software that works for you to secure your data in the future.

Is identity theft a crime? 

With the increasing occurrence of identity theft and its detrimental impact on victims, the US Congress took action by enacting the Identity Theft and Assumption Deterrence Act in 1998. This legislation classified the theft of someone’s identity as a federal crime.

According to the Act, it is considered a federal offense to “knowingly transfer or use, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that violates Federal law, or that is a felony under any relevant State or local law.” The details of this law are documented in 18 USC 1028.

General Data Protection Regulation (GDPR)

Identity theft is not only a concern within the United States, but also a significant issue globally, prompting the enactment of stringent data protection laws in various jurisdictions. Among these, the General Data Protection Regulation (GDPR) stands out as a cornerstone of identity protection for EU citizens. Similarly, the UK has implemented the Data Protection Act 2018, extending protections post-Brexit.

These regulations offer a robust framework to safeguard personal information, emphasizing the rights of individuals over their data. They mandate organizations to follow strict data handling and security protocols, significantly reducing the risk of identity theft. For victims, these laws provide a recourse for action, including the right to be informed about data breaches that might impact them directly.

Understanding these laws can empower you to take additional measures to protect your identity. For instance, under GDPR, you can ask organizations to delete your personal information or provide a copy of all data they hold on you. Leveraging these rights can enhance your personal data security and minimize exposure to identity theft.

Examples of identity theft

The 2013 Yahoo incident

In a staggering breach, every Yahoo account was compromised in 2013, impacting over three billion users worldwide. This breach exposed names, email addresses, a mix of secured and unsecured passwords, plus security questions and answers. Such details are gold for attackers aiming to infiltrate accounts across platforms through credential stuffing attacks.

This incident, among others, likely led to personal data being traded on the dark web, a hidden segment of the internet where illegal transactions, including the sale of stolen data, flourish. Reports from the New York Times highlighted transactions where stolen Yahoo data fetched $300,000 per buyer in these shadowy marketplaces.

Collection 1: A notorious data heap

Dubbed as the largest aggregation of pilfered data, Collection 1 was once available on the dark web for just $45. This scenario has become all too common: Trusted entities get hacked, personal data gets stolen, and then it’s sold to the highest bidder on the Dark Web, leaving individuals vulnerable to identity fraud.

The 2017 Equifax breach

Hackers infiltrated Equifax in 2017, accessing sensitive data of around 147 million people. The data included Social Security Numbers, addresses, and credit information. This breach raised alarm bells for potential identity theft on a massive scale, prompting a significant settlement involving Equifax, the Federal Trade Commission, and other regulatory bodies to address the fallout.

High-profile victim: Will Smith

Even celebrities are not immune to identity theft. Will Smith fell victim when a habitual criminal managed to accumulate $33,000 in credit charges using Smith’s personal information to fraudulently open multiple credit accounts across stores in Pittsburgh. This case underscores that no one is beyond the reach of identity thieves, highlighting the importance of vigilance and protection against such threats.

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What is considered identity theft?

Identity theft is a serious crime that occurs when someone uses another person's personal information without their consent to commit fraud or other illegal activities. The stolen data can include a person's name, Social Security number, credit card details, medical records, or other identifying data.

How common is identity theft?

Data suggests that millions of people fall victim to identity theft each year. In fact, identity theft is one of the fastest-growing crimes worldwide. The rise in identity theft can be attributed to the increasing reliance on technology and the ease with which personal information can be obtained and misused.

What is the most common form of identity theft?

Financial identity theft is probably the most common type of identity theft. Financial identity theft is any type of identity theft where a cybercriminal steals credit card details, bank account numbers, or other data for financial crimes. Victims of financial identity theft can suffer from monetary losses, lower credit scores, and other challenges.

What to do about identity theft?

Discovering that you’re the victim of identity theft can be distressing. However, it is critical to act swiftly to mitigate the damage.

Here are some important steps to take if you become a victim of identity theft:

  • Notify your financial institutions: Contact your bank, credit card companies, and other financial institutions to inform them of the theft. They will advise you about the steps you need to take.
  • Contact the authorities: Report the incident to your local law enforcement agency and provide them with all the relevant details.
  • Monitor your accounts: Regularly review your bank statements, credit reports, and other financial records to detect any suspicious activity.
  • File a report with the Federal Trade Commission (FTC): File a report with the FTC through their website or hotline.
  • Update your passwords and security measures: Change all your passwords to long and complex ones. Enable multi-factor authentication wherever possible to enhance your online security. Run an anti-malware scan to ensure your system isn’t carrying spyware, Trojans, and other privacy-invading malicious software.