Identity Theft: Definition & Protection

Instructor: Yuanxin (Amy) Yang Alcocer

Amy has a master's degree in secondary education and has taught math at a public charter high school.

Read this lesson to learn how damaging it can be to you to have your identity stolen. Also learn what you need to do when your identity is stolen along with ways to protect yourself.

Identity Theft

Identity theft is a crime! It is a crime where your identity is stolen from you. It means that someone else is using your identity to conduct his or her business. In most cases, it means someone else is making purchases in your name with your money. It can also mean that someone else is opening up accounts in your name or even filing taxes under your name. What does this mean for you? Well, when someone else is making purchases in your name using your money, they are essentially stealing money from you. You might have $2,000 in your bank one day. The next, you might be overdrawn, and you now owe the bank $1,000. Identity theft can lead to a poor credit score and can even lead to your bank accounts being frozen because of illegal activity. As you can see, this is not something you want to happen to you!

So, what kind of trouble can this cause you? Take a look at some things that identity thieves have done before:

  • Using a stolen Social Security number to get thousands of dollars of credit.
  • Stealing private bank account information and creating counterfeit checks from these bank accounts.
  • Obtaining names, addresses, and Social Security numbers from a website to apply for several car loans.

Fortunately, identity theft is now a crime. Congress added identity theft as a federal offense in 1998. Now, when someone commits identity theft and are found guilty of the offense, they can be sentenced to a maximum of 15 years in jail along with a fine, and forfeiture of any personal property that was used to commit the crime.

What to Do if Stolen

Even with this penalty, people are still committing this crime. So, what can you do if this happens to you? According to the United States Department of Justice, here is a list of things you can do if you become a victim of identity theft.

  • Contact the Federal Trade Commission either by phone at 1-877-438-4338 or through its website at
  • Contact the FBI.
  • Contact your local Postal Inspection Service office if you suspect that someone has submitted a change-of-address to redirect your mail to another address.
  • Contact the Social Security Administration if you suspect your Social Security number has been stolen.
  • Contact the Internal Revenue Service if you suspect someone is using your information in connection with tax violations.
  • Call the fraud departments of Equifax, Experian, and Trans Union - the three major credit reporting companies.
  • Contact all the businesses and people with whom you have an account to let them know that your identity has been stolen. You may need to cancel and open new accounts and place stop payment orders on any pending transactions.

The sooner you act, the less damage it will do to you. Unfortunately, once a criminal has committed identity theft and has damaged your name and credit history, it often takes a much longer time to clear and repair your name and credit.

Protect Yourself

The best thing you can do to prevent identity theft is to protect yourself. Here are some things you can do to protect yourself from becoming a victim of identity theft. But remember, thieves nowadays are getting trickier and trickier. Even if you did all these things, you may still become a victim. Remember to act quickly whenever you notice something suspicious.

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