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Identity theft

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Identity theft, also known as identity piracy or identity infringement, is a crime involving the unauthorized use of another person's personal identifying information. This information serves as a way to prove who a person is in society. It includes names, dates of birth, and social security numbers. It also covers driver's license numbers, bank account details, and credit card numbers. Other forms of data include PINs, electronic signatures, fingerprints, and passwords. Thieves use this data to commit fraud or gain unfair financial advantages. They may use it to obtain credit, goods, or various other benefits.

Figure 2 Example of a Successful Identity Theft Refund Fraud Attempt (28356288536)
Figure 2 Example of a Successful Identity Theft Refund Fraud Attempt (28356288536)

There are several specific ways that identity theft occurs. The most common type is financial identity theft. In this scenario, a person uses someone else's details to obtain loans, credit, or services. Another method is tax identity theft. A thief might use a person's authentic name and social security number to file a false tax return. They then direct the resulting refund into their own bank account. This can cause the real victim to have their legitimate return rejected as a duplicate.

Figure 2 Example of a Successful Identity Theft Refund Fraud Attempt (28356288536)
Figure 2 Example of a Successful Identity Theft Refund Fraud Attempt (28356288536)

Criminal identity theft and medical identity theft are also significant categories. Criminal identity theft occurs when a person poses as someone else to avoid being caught by the police. They might use stolen documents or fake IDs during an arrest. This can lead to criminal charges being placed under the victim's name. Medical identity theft involves using another person's identity to receive medical care or drugs. This often involves the theft of insurance information or insurance cards. This can result in inaccurate medical history being added to a victim's permanent records.

Figure 2- Risk of Identity Theft with Medicare Card under CMS’s Three Proposed Options (7802334168)
Figure 2- Risk of Identity Theft with Medicare Card under CMS’s Three Proposed Options (7802334168)

Researchers have identified even more complex variations of these crimes. Synthetic identity theft is a growing problem where identities are partially or completely fabricated. A thief might combine a real social security number with a fake name and birthdate. This creates a new file in credit bureau systems that is very difficult to track. Identity cloning is another method where a person assumes another's identity for daily life. This can be used to hide from creditors or to act as a "poser" on social media. Posers use the photos and stories of real people to create believable online personas.

History shows how the understanding of these crimes has evolved. The term "identity theft" was first coined in 1964. Since then, the United Kingdom and the United States have created legal definitions for it. In 2006, researcher Pam Dixon introduced the term "medical identity theft." Her report helped make the plight of medical victims public. Following her work, California passed laws regarding data breach notifications. Eventually, HIPAA was expanded to require notifications when medical breaches affect 500 or more people.

Figure 2- Risk of Identity Theft with Medicare Card under CMS’s Three Proposed Options (7802334168)
Figure 2- Risk of Identity Theft with Medicare Card under CMS’s Three Proposed Options (7802334168)

Modern technology has changed how these crimes are committed. Hackers now use malicious software to access information online. One such program was called Zeus, which is very easy for even inexperienced hackers to use. Zeus can steal credit card information and important documents. Some experts warn that such software could even threaten national security. Data stolen from hospitals is particularly valuable. It can be up to 10 times more valuable to cybercriminals than credit card information.

Figure 2 Example of a Successful Identity Theft Refund Fraud Attempt (28356288536)
Figure 2 Example of a Successful Identity Theft Refund Fraud Attempt (28356288536)

Children are also frequent targets of identity theft. This is because a child's social security number usually has no existing credit history. Thieves can use these numbers to buy houses or establish lines of credit. This fraud often goes undetected for many years. A study of 40,000 children found that 10.2% were victims. In 2008, approximately 630,000 people under age 19 were victims. These victims faced an average debt of about $12,799. Children in foster care are especially vulnerable due to frequent moves.

Figure 2- Risk of Identity Theft with Medicare Card under CMS’s Three Proposed Options (7802334168)
Figure 2- Risk of Identity Theft with Medicare Card under CMS’s Three Proposed Options (7802334168)

Detecting identity theft can be very difficult for victims. A report for the FTC noted that theft is not always detectable by the individual. Even large data breaches may not result in many detected incidents. One study noted the probability of becoming a victim after a breach is only around 2%. However, the full extent of the problem remains unknown. Victims of criminal identity theft may face long struggles to clear their records. They may need to provide DNA or fingerprints to prove their identity. Even after records are corrected, incorrect data may still appear in databases used by data aggregators.

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Figure 2 Example of a Successful Identity...
File:Figure 2- Risk of Identity Theft with Medicare Card under CMS’s Three Proposed Options (7802334168).jpg
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