What is Identity Theft?


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Identity theft is technically defined by the United States Government as being the fraudulent use of an individual's personal information—such as Social Security number or date of birth—to commit financial fraud.

Quite simply identity theft occurs when identity thieves use the personal and financial information of their victims and then place fraudulent charges on their accounts. When this happens it is quite a hassle to restore your finances to normal, not to mention clear up any confusion on your credit report or with your lenders. There is a formal process that you must go through to report any charges on your credit as fraudulent and then you must locate and close down all the fake accounts that may have been opened in the names of the identity thieves. This of course can take hundreds of hours of your time and nobody can do it for you, as it is your identity that needs to be confirmed and restored and nobody else’s.

Yet another necessary inconvenience is the necessity of replacing of your credit cards and possibly even the opening and closing of new accounts. It usually takes about two years to clear up all of the damage done to you. Experts say it is a minimum of 600 hours to clean up everything, including your credit report.

The good news is that you are not held liable for any massive losses incurred through identity theft. If you are the victim of identity theft most credit card companies hold you liable for fifty dollars worth of the fake charges that are put on your card. So if an identity thief charges up twelve hundred dollars worth of goods you only have to worry about paying fifty dollars of it.

Although you will not be held financially responsible for unauthorized charges, identity theft costs you in other ways. Credit card companies experience losses of over fifty billion dollars a year because of identity theft due to credit card fraud. You pay for this in the form of higher interest rates, more hidden charges and more fees in general.

Are the credit card companies doing anything to fight credit card fraud? As far as you are personally concerned you now often have to phone a special number before your card can be activated once you get a new one in the mail.

Furthermore almost all of the major credit card companies have developed new technology to help detect fraud. One type of software for instance looks at your spending habits and if it detects something out of the ordinary such as a large expenditure or an expenditure made from out of town, then it may temporarily freeze your card until you call and explain that you are the one that authorized the large purchase. This is why sometimes it might be a good idea to call your credit card company and inform them that you are about to make a large purchase or that you are about to use it in a foreign country. This can prevent embarrassing “blocks” on your cards that blindside you when you least expect it.

Keep in mind that if you are the victim of fraud that you must report it in a timely manner. This is why it is so crucial to review your credit card statement when it arrives. If you do not report fraud within sixty days of the billing statement containing the questionable charges, you may be fully liable for unauthorized charges. This is why it is so important to read your credit card statements the day you receive them and report any questionable charges to your card issuer immediately.

The federal Fair Credit Reporting Act (FCRA) gives you the right to get a free credit report if you are the victim of identify theft and to place a fraud alert in your file if you detect that your credit report contains erroneous information as a result of fraud

Depending on what state or province you live in North America you may quite a few laws on your side that protect your rights from creditors and credit agencies if you are the victim of identity theft. It is a good idea to contact your state or local consumer protection agency or your state attorney general for more information. You can find these agencies in the government pages of the phone book.

Learn the history of Identity Theft at Identity Theft Credit Fraud or get help if you are a victim at Take Your Identity Back .


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