If an identity thief has your name, address, Social Security number and birth date, he can apply for credit using your information, evade the law using your name as an alias, file tax returns as you to get the refund and drain your bank accounts. If he gets your health insurance numbers, too, he can seek medical treatment under your name, and if he steals your credit or debit card number, he can go on a spending spree with the bill going to you. No matter which action identity thieves take, it affects the victims.
Effects on the Victim
Your credit score suffers if an identity thief uses your information to apply for credit or steals your credit or debit card information to make purchases. If an identity thief uses your information when stopped by a police officer who is issuing a ticket and then doesn't pay the ticket, you could be arrested when a warrant is issued. Or, if the identity thief provides your information after an arrest, your name will be on record as being arrested. You can get this cleared up, but it takes time. If you were a victim of tax return fraud, your refund will be delayed. If the thief gets medical treatment as you, your treatment and insurance records could be affected.
Child Identity Theft
Child identity theft, another common type, occurs for two main reasons: It usually takes longer to discover an identity crime when the victim is a child, and children have a clean credit record. Sometimes, a child doesn't find out she's been the victim of identity theft until years later when she tries to buy a car or apply for a student loan. In addition, family members who might have destroyed their own credit sometimes steal a child's identity, according to the Identity Theft Resource Center.
Effects on Commerce
One way identity thieves steal information is to hack into the computer system of a business to steal customer credit card information. Identity thieves can get thousands, maybe millions, of credit card numbers this way, according to an article published by USA Today. This costs businesses a tremendous amount of money from settlements, hiring someone to remove the malware the thieves used and time spent communicating what happened to customers. Businesses typically pass on their losses to consumers who end up paying more for goods and services.
Are Victims Responsible for Debts?
If an identity thief stole your credit or debit card number, you typically don't need to pay debts beyond $50 that you didn't incur. You simply need to replace your credit or debit card. But if your name and Social Security number were stolen so the thief could apply for credit or to take out a loan, it could take you years to untangle yourself from the debt created in your name. Once your credit score has been hurt, it could take some time to resolve the issue. If you are trying to buy a house or rent an apartment, for example, you might be turned down while waiting for your credit to return to normal.
- Privacy Rights Clearinghouse: Criminal Identity Theft -- What to Do if It Happens to You
- IRS: Tips for Taxpayers, Victims About Identity Theft and Tax Returns
- Identity Theft Resource Center: Identity Theft and Children
- USA Today: Identity Theft Growing, Costly to Victims
- United States Department of Justice: Identity Theft
- Federal Trade Commission: Statement of Rights for Identity Theft Victims