What is Identity Theft? Everything You Need To Know About the Nefarious Cyber Crime

Over a third of all Americans will encounter some type of identity theft in their lives. 

Despite our best efforts to protect ourselves, nefarious players can find ways to steal our information and wreak havoc on our lives. 

Here’s what you need to understand about identity theft. 

What is Identity Theft?

The term “identity theft” has a wide range of implications. 

The movies portray it as a complex scheme to take over your entire life – family, husband, job, the works. 

Although it’s not as sinister in real life, it’s still a massive problem that can destroy your finances. 

Identity theft occurs when someone steals your personally identifiable information and uses it to commit fraud. 

What is Personally Identifiable Information?

Personally Identifiable Information, or PII, is any information that can be used to identify you. The most common forms are social security numbers, birthdates, and addresses. 

It can also include information we use to secure ourselves online, like our mother’s maiden name or pin numbers. 

What Do Fraudsters Do With PII?

With our entire lives online, nefarious players can wreak havoc on your finances if they have enough PII. 

They can open lines of credit in your name, tank your credit score, and wipe out your bank accounts. 

Who Are the Thieves?

There’s a common misconception that strangers are the sole perpetrators of identity theft crimes. When we think of identity theft, we think about hooded criminals in foreign countries hacking our accounts. 

But that’s not always the case. 

Identity theft can hit close to home. 

Parents open accounts in their children’s name. Adult children steal their parent’s social security checks. Spouses steal their own partners’ credit, racking up debt. 

People victimized by their families don’t often understand how serious the crime is. Identity theft is a problem, even when perpetrated by someone you know. 

How Does Identity Theft Impact Your Life?

Identity theft causes a host of problems. Sometimes, it drains your bank account, leaving you unable to pay your bills. People with overdraft protection enabled can find themselves in the red, owing the bank thousands of dollars in overdraft fees. 

Thieves who use your information to take out lines of credit can slowly destroy your credit ranking. They can open multiple credit cards in your name, rack up debt, and leave you completely unaware until you notice your score drop. 

Although most financial institutions will work with their customers, getting your money back can be a long and stressful process. 

My Identity Theft Stories

I’ve had my identity stolen three times. 

Luckily, I didn’t have to deal with the added trauma of the perpetrator being someone I know. 

Two of the three times were pretty simple. Someone had gotten some of my information and opened a credit card in my name. 

One was a Paypal credit card, and they were having a field day driving through the Western US, taking cash advances at every ATM along the way. I don’t remember what type of card the other was, but they tried to do some shopping at Walmart and got rejected. All I had to do in these situations was call the card companies and dispute the charges. The bank canceled the cards immediately, and didn’t hold me responsible for any of those charges.

I believe a gas station skimmer caused both instances. I swiped to pay for gas, and someone got a good chunk of my information. 

My Worst Experience with Identity Theft

My first experience with identity theft wasn’t as straightforward. I had just stepped off the plane into London, ready for my first-ever international excursion. I was going to stay with a friend there for a few days, then head off on my own to Paris and Rome.

 But first, I wanted to get a nice coffee drink at the airport café. I had saved up for this trip and had tons of money in my bank account to pay for whatever my heart desired. 

So imagine my surprise when my bank card was declined at the café due to a lack of funds.

That couldn’t be right! 

I got the international number for my bank and called right away. My account was overdrawn. Someone stole all the money I had stashed away in my checking account and then some. I had to deal with identity theft on the first day of my first real vacation!

Luckily, Bank of America was incredibly understanding about the identity theft and my situation. They locked my account and even offered a loan for my two-week vacation (I didn’t need it because I had another checking account at a different bank that was untouched). 

They put alerts on all my accounts, took away the overdraft fee, and said we could sort the rest out when I returned from my vacation.

I enjoyed my trip and called Bank of America when I got home. They refunded all the stolen money in a few days and helped me add additional security to my account.

Protecting Yourself Against Identity Theft

There are numerous ways to protect yourself from identity theft.  

Cautiously guard your personal information, lock your credit, and use cash as often as possible. Use a credit monitoring agency that sends alerts if your information appears somewhere it shouldn’t. Change your passwords frequently. 

Unfortunately, it’s not all up to us. Private companies worldwide hoard our PII, and they’re constantly at risk for data breaches. Despite your best efforts, someone might steal your identity. 

What To Do if Your Identity is Stolen

If your identity is stolen, don’t panic. Most banks will work with you to make you whole, especially if you catch it quickly enough. 

Call the affected company and explain what happened. They will walk you through how to proceed. Then, follow our guide for what to do when you’re a victim of identity theft

Identity Theft Happens, but Doesn’t Have To Destroy You

In our online, constantly connected world, identity theft is a fact of life. However, that doesn’t mean we have to throw our hands up and accept it. 

Use due diligence to protect yourself; if it happens, keep a cool head. You can get through this. 

Author: Melanie Allen

Title: Journalist

Expertise: Pursuing Your Passions, Travel, Wellness, Hobbies, Finance, Gaming, Happiness

Melanie Allen is an American journalist and happiness expert. She has bylines on MSN, the AP News Wire, Wealth of Geeks, Media Decision, and numerous media outlets across the nation and is a certified happiness life coach. She covers a wide range of topics centered around self-actualization and the quest for a fulfilling life.