Theft of Identity - How Does It Happen? Types?

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Theft of Identity - How Does It Happen? Types?

Postby Administrator » Thu Sep 29, 2005 6:42 pm

How does Identity Theft Occur?

Credit Fraud: Application Fraud/Identity Theft:

Application Fraud is the use of another person's social security number or personal identifiers in making application for credit or other benefits; it can also involve the use of a false or misleading identifier intended to deceive the lender and avoid file segregation standards used by the credit bureaus.

Thieves are after names, addresses, financial account numbers, Social Security numbers, dates and places of birth, tax records, canceled checks and credit-card statements. They use these stolen identities to obtain credit from banks and retailers, steal money from existing accounts, apply for loans, establish accounts with utility companies, rent apartments, file bankruptcy, obtain jobs or apply for Social Security benefits. Most identity-theft victims don't know thieves have made a mess of their good names and credit histories until banks deny them home loans or auto financing.

Credit Fraud seems like it takes on other forms too.

What other types of credit fraud are encountered?

Credit Fraud: Not Received Fraud:

Not Received Fraud: There are a variety of reasons why a consumer may not receive a card and it falls into the hands of a defrauder. Mail box thefts, postal service thefts, and pre-screen applications or active cards not received. Another scam is the re-direction or mis-direction of the card and billing statements to the defrauder's mail drop.

Credit Fraud: Counterfeit Credit Cards:

The counterfeit credit card fraud problem represents a mid-level fraud in terms of sophistication. Here, the defrauder creates cards and encodes them for use with account numbers and verification to enable the card.

Credit Fraud: Lost or Stolen Credit Cards:

Here, the credit device was received by the cardholder and is "accepted" under Truth-in-Lending principles [15 U.S.C. 1643] and by some means the defrauder obtains the card and makes unauthorized use of the card.


Skimming occurs when you present your credit or debit card for payment. The payment is made, and then the person making the transaction runs it through a small device that stores your card's information. It is likely to happen in an environment where your credit or debit card is not in your sight at all times (like at a restaurant where you pay at the table). In instances like these, you may want to consider using cash instead.

David A. Szwak

Postby David A. Szwak » Thu Nov 03, 2005 8:02 pm

How does identity theft happen?

Criminals steal personal information, such as Social Security numbers, driver's license numbers, credit card numbers, ATM cards, telephone calling cards and other key pieces of individuals' identities. They use this stolen information to impersonate their victims, spending as much money as they can in as short a time as possible before moving on to their next victim.

Identity thieves use a variety of ways to gain access to this personal information including:

• Stealing your mail
• Looking through your garbage - "dumpster diving"
• Stealing your wallet or purse
• Posing as your employer, bank or utility company needing to "update their records"
• Grabbing information off internet sites that are not secure
• Completing a "change of address form" at the post office
• Stealing the information from "the inside" - as in a grocery store clerk taking key information off of a check that you have written

Once the thief has access to this information, they may open a new credit card account in your name providing a "new" billing address. Given that the credit card bills will not go to your address, chances are, you will not be aware of the new account. When the thief does not pay the bills, the credit card company will report this to your credit file. The thief may also open up bank accounts in your name and write bad checks, apply for services in your name or request a "replacement" card to be sent to a new address.

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