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What Do Thieves Do With Stolen Identities?

Cyber-crime has become a rampant problem in the U.S. today — much more so than many Americans may think.

According to the Internet Crime Complaint Center (a partnership between the FBI and the National White Collar Crime Center), cyber-crime complaints totaled over 300,000 in 2010 — averaging about 25,000 complaints per month.

Why criminals target your personal identity is clear — it's a quick path to your cash. In many ways, it's easier than robbing a bank, given the relatively lax security efforts consumers use to thwart cyber-thieves.

But what do criminals do with your personal data? There is no shortage of ways a criminal can use your identity once he gets his hands on your personal information. Let's count the ways:

Credit Card Fraud
If an identity thief gets a hold of your credit card information, he can:

  • Open a credit card for his use — but in your name. The criminal gets the goods and services from those card purchases, while you end up with a delinquency notice on your credit report.
  • Use your address to throw you off his trail. A common tactic among credit card thieves is to use your card information to change the billable address on the card. That way, you may not be aware that the crook is ringing up big purchases on your card until it's way too late. Sure, you may catch on in 30 days or so, but a card thief can rack up a lot of financial damage in 30 days.

Phone and Utility Fraud
If an identity thief gets access to your phone number or electric bill, he can:

  • Open a new cell phone account in your name and stick you with some big bills.
  • Open up a new utility account for their home, not yours. Thieves often use information from your phone or electric bill to open up satellite television or cable service, or even get heating and air conditioning services on your dime.

Bank Fraud
If an identity thief gets your bank account number, he can:

  • Order new checks from your account number — and spend you into fiscal calamity.
  • Open a new bank account using your information.
  • Order a new debit card, and start making large withdrawals right away.
  • Wire money out of your account — and money wires are notoriously harder to track for authorities.
  • Apply for an auto or personal loan out in your name.

Social Security and Government Document Fraud
If a criminal gets your Social Security number, he can:

  • Get a new driver's license, and open a whole new path to financial fraud.
  • Collect any government benefits coming to you.
  • Rent a home — and skip on the rent — all in your name.
  • Give police your personal information upon an arrest. Once he skips the court date, guess who the police come looking for? Don't believe it? Read this horrendous true story: A 17-Year ID Theft Saga Finally Ends

Once a thief gets a hold of your personal information, that thief has just opened a wide-open road to financial fraud that can take years — maybe decades — to recover from.

That's why it is imperative that you take every step possible to protect your personal identity. If you ignore the threat, be forewarned — as any law enforcement professional will tell you — it won't ignore you.