You've heard of identity fraud. You're pretty sure you know what identity theft is. And you know someone whose credit card was stolen. But aren't they all the same, three sides of the same coin?
In a way, yes, they are. But the differences between identity theft, credit card theft, and identity fraud can help you understand what each is, spot the risks to you, and act accordingly.
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What is identity theft?
This is perhaps the simplest definition. Identity theft is essentially self-describing: it means that a person's details are stolen. This person can be an adult, a child, or even a deceased person. Identity theft relies on enough stolen data that someone can convincingly impersonate the victim.
Today, identity theft is primarily considered an online crime, but there are many offline methods of stealing an identity. For example, an identity thief might go through her trash for discarded bank statements and other financial information. They could steal your message to get information about you. Thieves can also steal what they need from your wallet or purse. Driver's license, credit card, membership card of a public body are enough to know enough about you to take out a loan in your name.
Stealing someone's identity in person takes more effort than sitting behind a computer. Increasingly, identity theft is becoming an online crime, with phishing emails and instant messages tricking people into innocently handing over their login details to banks and credit card websites, making them believe that the websites are legitimate. Phishing is a key feature of online identity theft, although it can be executed just as quickly over the phone.
An identity thief needs your name, date of birth, and address to get started. This information can be enriched by activity on social networks. For example, a scammer may check her Facebook account for talking points about what she did to appear completely convincing in getting a loan in her name.
Do you think your identity has been stolen? Contact your bank, credit card company and, if necessary, the police.
What is identity theft?
Once identity theft is successful, identity fraud can occur. It is the practice by which identity theft tricks a bank or credit card company into handing over money and information about the victim.
It is essentially a fraud carried out under the identity of another person.
Identity fraudsters can use your information to open a new bank account, apply for new credit cards and loans, obtain state benefits, order products, sign up for a cell phone contract, take over your bank accounts, credit and real estate, and even confiscate legitimate duplicates of your official documents. This includes things like passports and driver's licenses.
(Image credit: Shutterstock)
What is credit card theft?
If a criminal doesn't have the time or resources to steal your entire identity, they may prefer to use your credit card instead. Debit cards are also included in this type of theft.
There are three main types of card theft: physical theft, cloning, and theft. If your wallet is stolen, a physical theft has occurred. A card can be cloned after a physical theft, or the data is simply extracted from it and stored in a database. Here you wait for a new fake card to be downloaded which can then be used as a real credit card.
Skimming is a crucial risk of credit card payment. Skimmer technology is a compact method of copying data stored on your credit card. The data can then be used to purchase goods or services charged to your account. Unfortunately, it's not just restaurant and cafe employees who can wear skimmers, but ATMs and gas station pay-at-the-pump systems are prone to interference. Usually this means installing a skimmer.
Credit card theft naturally leads to credit card fraud. Here, goods can be obtained using the map and delivered to a remote location, such as an industrial zone unit. Alternatively, the money can be transferred (via a fake "payment") to an account managed by the criminal.
The differences between identity fraud, identity theft and credit card theft
You now know and understand what identity fraud is, as well as identity theft and credit card theft. The differences should be pretty clear, but if not, here's a summary:
- Identity theft is fraudulent activity (borrowing, extending credit, even acting in an official capacity) using someone else's stolen identity.
- Identity theft is the act of stealing an identity. It can be done offline or online. Identity can also be bought or sold online; some are stolen on order.
- Credit card theft includes credit cards and debit cards. It consists of stealing (or duplicating) a card for personal use or transferring the balance to another account with a false payment.
All of these things are bad, but you can reduce your exposure to these:
- Get rid of old bank statements and correspondence
- Keep important documents securely under lock and key
- Reduce activity on social networks and friends
- Set a different password for each account using a password manager
- Enable two-factor authentication when available
- Set a secure PIN or fingerprint authentication on your phone
- Subscribe to SMS balance alerts from your bank and credit card provider
- Sign up for monthly credit reports to verify credit applications on your behalf
(Image credit: Pixabay)
Identity fraud, identity theft and credit card theft: three sides of the same coin
The theft and subsequent fraud explained here are all related. Not having a credit card will not prevent identity fraud. Disconnecting from the network will not prevent identity theft. These are aspects of modern life enhanced by our reliance on instant connectivity for simultaneous benefits and threats.
Be aware of the differences between identity fraud, credit card and identity theft. But remember that the problems are interrelated and behavior that keeps your data private will help you tremendously.