According to the non-profit Identity Theft Resource Center, identity theft is sub-divided into four categories:
- Financial Identity Theft (using another's identity to obtain goods and services)
- Criminal Identity Theft (posing as another when apprehended for a crime)
- Identity Cloning (using another's information to assume his or her identity in daily life)
- Business/Commercial Identity Theft (using another's business name to obtain credit)
Identity theft may be used to facilitate crimes including illegal immigration, terrorism, and espionage. Identity theft may also be a means of blackmail. There are also cases of identity cloning to attack payment systems, including medical insurance.
Financial Identity Theft
A classic example of credit-dependent financial crime (bank fraud) occurs when a criminal obtains a loan from a financial institution by impersonating someone else. The criminal pretends to be the victim by presenting an accurate name, address, birth date, or other information that the lender requires as a means of establishing identity. Even if this information is checked against the data at a national credit-rating service, the lender will encounter no concerns, as all of the victim's information matches the records. The lender has no easy way to discover that the person is pretending to be the victim, especially if an original, government-issued id can't be verified (as is the case in online, mail, telephone, and fax-based transactions). This kind of crime is considered non-self-revealing, although authorities may be able to track down the criminal if the funds for the loan were mailed to them. The criminal keeps the money from the loan, the financial institution is never repaid, and the victim is wrongly blamed for defaulting on a loan s/he never authorized.
In most cases the financial identity theft will be reported to the national Consumer credit reporting agency or Credit bureaus(US) as a collection or bad loan under the impersonated person's record. This person may discover the incident by being denied a loan, by seeing the accounts or complaints when they view their own credit history, or by being contacted by creditors or collection agencies. The person's credit score, which affects one's ability to acquire new loans or credit lines, will be adversely affected until they are able to successfully dispute the complaints and have them removed from their record.
Other forms of examples of bank fraud associated with identity theft include "account takeovers," passing bad checks, and "busting out" a checking or credit account with bad check, counterfeit money order, or empty ATM envelope deposits. If withdrawals or checks are made against the impersonated person's real accounts, that person may need to convince the bank that the withdrawal was fraudulent or file a court case in order to retrieve lost funds. If checks are written against fraudulently opened checking accounts, then the person receiving the checks will suffer the financial loss, however they might try to retrieve money from the impersonated person by using a collection agency which would appear in the person's credit history until they can show that it was fraud.
Identity cloning and concealment
In this situation, a criminal acquires personal identifiers, and then impersonates someone for concealment from authorities. This may be done by a person who wants to avoid arrest for crimes, by a person who is working illegally in a foreign country, or by a person who is hiding from creditors or other individuals. Unlike credit-dependent financial crimes, these issues can be non self-revealing, continuing for an indeterminate amount of time without being detected. The criminal might attempt to obtained fraudulent documents or IDs consistent with the cloned identity to make the impersonation more convincing.
Criminal identity theft
When a criminal identifies himself to police as another individual it is sometimes referred to as "Criminal Identity Theft." In some cases the criminal will obtain a state issued ID using stolen documents or personal information belonging to another person, or they might simply use a fake ID. When the criminal is arrested for a crime, they present the ID to authorities, who place charges under the identity theft victim's name and release the criminal. When the criminal fails to appear for his court hearing, a warrant would be issued under the assumed name. The victim might learn of the incident if the state suspends their own drivers license, or through a background check performed for employment or other purposes, or in rare cases could be arrested when stopped for a minor traffic violation.
It can be difficult for a criminal identity theft victim to clear their record. The steps required to clear the victim's incorrect criminal record depend on what jurisdiction the crime occurred in and whether the true identity of the criminal can be determined. The victim might need to locate the original arresting officers, or be fingerprinted to prove their own identity, and may need to go to a court hearing to be cleared of the charges. Obtaining an expungement of court records may also be required. Authorities might permanently maintain the victim's name as an alias for the criminal's true identity in their criminal records databases. One problem that victims of criminal identity theft may encounter is that various data aggregators might still have the incorrect criminal records in their databases even after court and police records are corrected. Thus it is possible that a future background check will return the incorrect criminal records.
Techniques for obtaining personal information
In most cases, a criminal needs to obtain personally identifiable information or documents about an individual in order to impersonate them. They may do this by:
- Stealing mail or rummaging through rubbish (dumpster diving)
- Retrieving information from redundant equipment which has been disposed of carelessly, e.g. at public dump sites, given away without proper sanitizing etc
- Researching about the victim in government registers, internet search engines, or public records search services
- Stealing payment or identification cards, either by pickpocketing or surreptitiously by skimming through a compromised card reader
- Remotely reading information from an RFID chip on a smartcard, RFID-enabled credit card, or passport
- Eavesdropping on public transactions to obtain personal data (shoulder surfing)
- Stealing personal information in computer databases (Trojan horses, hacking)
- Advertising bogus job offers (either full-time or work from home based) to which the victims will reply with their full name, address, curriculum vitae, telephone numbers, and banking details
- Infiltration of organizations that store large amounts of personal information
- Impersonating a trusted organization in an electronic communication (phishing)
- Obtaining castings of fingers for falsifying fingerprint identification
- Browsing social network (MySpace, Facebook, Bebo etc) sites, online for personal details that have been posted by users
Individual identity protection
The acquisition of personal identifiers is made possible through serious breaches of privacy. For consumers, this is usually due to personal naiveté about who they provide their information to. In some cases the criminal obtains documents or personal identifiers through physical theft(e.g. vehicle break-ins and home invasions). Guardianship of personal identifiers by consumers is the most common intervention strategy recommended by the US Federal Trade Commission, Canadian Phone Busters and most sites that address identity theft. Personal guardianship issues include recommendations on what consumers may do to prevent their information getting into the wrong hands. The strongest protection against identity theft is not to identify at all - thereby ensuring that information cannot be reused to impersonate an individual elsewhere. As such, identify theft is often a question of too little privacy or too much identification. Many activities and organizations in a modern society require people to provide personal identifiers (Social Security number, national identification number, drivers license number, credit card number, etc), and in some cases the knowledge of personal identifiers is treated as proof of identity. This is sometimes done as a convenience or to enable transactions by telephone or the internet, however it can also make it more difficult for individuals to protect themselves from identity theft. In some cases an identity thief will attempt to impersonate a deceased individual. Frequently credit checks or other types of verification are not cross referenced with death certificates, so the crime may go unchecked for some time unless the deceased's family detects it and takes steps to prevent further fraud.Spread and impact
Surveys in the USA from 2003 to 2006 showed a decrease in the total number of victims but an increase in the total value of identity fraud to US$56.6 billion in 2006. The average fraud per person rose from $5,249 in 2003 to $6,383 in 2006.The 2003 survey from the Identity Theft Resource Center found that:
- Only 15% of victims find out about the theft through proactive action taken by a business
- The average time spent by victims resolving the problem is about 40 hours
- 73% of respondents indicated the crime involved the thief acquiring a credit card
- The emotional impact is similar to that of victims of violent crimes