Is there more than one kind of identity theft?
Dave, I know that identity theft is a problem, but someone told me the other day that there are five major kinds of Identity theft. Then they got busy with something, and it left me confused. Isn't identity theft just identity theft?
I have deferred responding to this question to my friend Jonathan Kraft, who helps people learn to protect themselves and their information. He has probably forgotten more about identity theft than most people will ever know.
While it is true that the Federal Trade Commission reports identity theft as a general category, there are different kinds of ways your identity can be stolen, which has led some organizations in the United States to really make an effort to educate consumers on all the ways your information can be stolen and misused.
(Just as a note of giving credit where credit is due, the "5 kinds of identity theft" concept appear to have originally come from Jeffrey Omtvedt and John Gardner, both nationally recognized experts on the subject.)
Technically, if you want to really classify it out, there are 6 major kinds of identity impersonation. They fall under the general category of what's commonly referred to as identity theft (primarily thanks to the catchy and funny, although not necessarily helpful, Citibank commercials of a few years ago).
The six major kinds of identity theft are credit/financial, motor vehicle, character/criminal, medical, social security, and deceased/unborn identity theft.
Many victims of so-called "identity theft" are actually just victims of credit fraud, which is the annoying but often more easily solved problem of someone else using a credit account you already have open with a bank or credit card company to purchase something. In most cases, the credit card company or bank is going to take care of the charges when you dispute them. (This isn't always true, but in most cases, with zero-liability cards, the charges will be refunded.) What's more scary in the financial arena than credit fraud is when someone uses your information to open a line of credit you don't know about. Laws now in effect make you responsible for the debt if you don't report it within 60 days, even if you didn't know the line(s) of credit exist(ed).
In the case of motor vehicle identity theft, someone uses your driver's license (or a copy of your license) with their picture on it. They get pulled over for speeding, missing a light, DUI, etc., and guess whose DMV record that becomes part of? Now I don't know about you, but I've never been to the DMV without waiting in line, and I certainly wouldn't be excited to have the conversation with the DMV that the me standing in front of them wasn't the me that their computer said I was.
If we're talking about Medical Identity Theft (Reader's Digest did a cover story on it in 2006), what we're really talking about is your medical records. Someone goes to the hospital and is treated using your driver's license, social security number, or health insurance information. Whatever they are being treated for has the opportunity to become part of your medical records, and you have the opportunity to pay for whatever bills they incur in your name. Sounds like fun, right?
When it comes to social security identity theft, what we're addressing is people who come into the United States who want to work, but in order to do so, they need a social security number. Regardless of how you feel about the immigration issue, in most cases, the social security number being used actually belongs to another person. If it's your social security number being used, the IRS may come after you to pay taxes for a job you have never worked at, possibly in a state you have never visited. On the retirement side o social security, how does the government accurately know how much you can claim in social security benefits if multiple people are working using your social security number? You can sort that mess out on your own too, but it's kind of like going to the DMV and takes most people a fair amount of time and frustration.
And finally, there is deceased/unborn identity theft. Unborn identity theft is when someone makes up a social security number and uses it for any form of fraud, and a brand new person born into this country is assigned a social security number which already has negative items associated with it (a criminal record or bad credit score, for example). Deceased identity theft is when someone watches the obituaries and purchases the information of a recently deceased person, using that information to make purchases and commit criminal activity, knowing that no one will actually be there to pay the bills or be prosecuted (although sometimes creditors will go after family members or friends of the deceased to pay the bills).
So this all sounds pretty scary, if it were to happen to you. With 8 million victims just last year, it could easily be you. And that's not a scare tactic, but just a fact. So, what should you do about it? The number one thing is what you have just done in reading this post. Get educated on the issues for yourself. The aforementioned commercials are great because they brought the issue to light back in 2004, but the solution they presented only protects a very small part of your identity. So, based on the information and knowledge you collect, develop a plan which, like having a planned fire exit from a building, will help you when (and for most of us it will be when, not if) you become a victim yourself.
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