Identity theft and identity fraud are two terms often used interchangeably. However, it is important to keep in mind that although identity theft and identity fraud often go hand in hand, they have different meanings and implications. Understanding the main differences and similarities between these two terms is critical when it comes to defending against false allegations or protecting yourself against cybersecurity threats. In this informative article, we will provide valuable insights regarding these concepts and their consequences.

Understanding Identity Theft

Identity theft is a type of crime that occurs when someone obtains the personal or financial information of another person without their permission, typically for financial gain. The information acquired may be used to steal money, open credit accounts, make health insurance claims and other actions. Identity theft is one of the fastest growing crimes in the United States. According to the National Council on Identity Theft Protection, reports of identity theft have skyrocketed in recent years, jumping from 3.34 million in 2019 to 5.74 million in 2021. Some of the most common types of identity theft include financial identity theft, medical identity theft, synthetic identity theft and tax identity theft.

How is Identity Theft Committed?

In today’s digital age, identity theft is usually committed online. However, it should be noted that there are other ways in which a person’s identity may be stolen. Below, we will list some of the most common ways in which identity theft is committed:

• Phishing: Phishing is a common cybercrime in which a scammer sends fraudulent communications that appear to come from a trustworthy source in order to steal sensitive information. While email is the most common medium, phishing attacks can take several forms such as social media messages, text messages and more.
• Mail: Identity thieves may steal mail and packages from trash cans, porches, and next to front doors. Addresses or other identifying information on the packages may be stolen and used to commit fraud.
• Stolen Purses and Wallets: Physical theft of wallets, purses, passports, drivers licenses or credit cards provide thieves with immediate access to sensitive information.
• Data Breaches: Hackers are able to infiltrate databases of businesses, government agencies and personal accounts, gaining access to personal data which may be sold or used to commit fraud.
• Malware: Fraudsters may trick individuals into downloading harmful software that can be used to open access to someone’s computer, leaving it vulnerable to identity theft. 

Understanding Identity Fraud

Identity fraud is a distinct type of criminal activity that occurs when an individual or group uses stolen personal information to engage in fraudulent or otherwise illegal activity, impersonate someone else for financial gain, or other malicious purposes. While identity theft involves the unauthorized acquisition of personal information, identity fraud involves the subsequent misuse of that information. In other words, identity theft is often considered the first step in committing identity fraud.

Committing Identity Fraud

In cases of identity fraud, stolen personal data is used to engage in fraudulent activities, financial crimes or other malicious acts. Some of the most common forms of identity fraud and activities that are considered identity fraud include:

• Credit Card Identity Fraud: When a fraudster steals credit card information to make unauthorized purchases, duplicate cards or sell the information for profit, it is considered credit card identity fraud.
• Tax ID Theft: A criminal may steal personal tax information to file taxes on another person’s name and collect their tax refunds.
• Loan Fraud: Identity fraud can include taking out loans or lines of credit using the victim's identity. Fraudsters may apply for personal loans, mortgages, or auto loans in the victim's name, leaving the victim responsible for repaying the debt.
• Medical Identity Theft: When a person’s identity is stolen and used to fraudulently obtain medical services, prescriptions or insurance coverage, it shifts from being considered as identity theft to being categorized as identity fraud. 
• Social Security Fraud: Identity thieves may fraudulently claim Social Security benefits, such as retirement or disability benefits, using the victim's Social Security number.
• Utility Fraud: Fraudsters may open utility accounts such as electricity, water, or cable using the victim's identity, which can ultimately result in unpaid bills and damage to the victim's credit.
• Employment Fraud: Identity thieves may use stolen personal information to gain employment or work under the victim's name. These malicious actions can lead to issues with tax filings and employment for the victim.

Distinguishing Between Identity Theft and Identity Fraud

Having delved into the intricacies of both concepts, we hope this gave you a clear understanding regarding the differences between these two important terms. In essence, identity theft may be considered the initial act of stealing personal information, while identity fraud is the subsequent illegal activity that occurs once the stolen information is misused for financial gain or other malicious purposes. Moreover, it should be noted that identity theft means the theft of personal information, which is then used to impersonate you in some way, such as opening new accounts or filing tax returns under your name. Identity fraud, on the other hand, involves misuse of someone else’s account.

Bottom Line

Have you fallen victim to identity theft or identity fraud? Have you been falsely accused of committing identity theft or identity fraud? Attorney at Law is here to help. Reach out to one of our specialized attorneys today.