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What is Identity Theft?

Here's a scenario you don't want to see. A debt collector contacted you about an account opened in your name, but you didn't open the account. What should you do?

Identity theft is America's fastest-growing crime. The identities of millions of Americans are stolen every year, depriving them of billions of dollars and ruining their credit in the process. According to Javelin Strategies, identity theft increased by 11% from 2008 to 2009 – creating a personal financial nightmare for 11 million Americans

There are as many different types of identity theft as there are flavors of Baskin-Robbins ice cream, including credit card fraud, Internet fraud, mail theft, and more. It may seem overwhelming, but protecting yourself against any type of credit fraud is essential to maintaining

a clean credit report, financial account, driving record and even criminal history.

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The best protection against identity theft is prevention and awareness. By using a little common sense and following these basic tips, you'll be one step ahead of identity thieves:

  • Monitor your mail (and email). Mailboxes left unattended for more than one day are attractive to criminals. Any unwanted documents received in the mail that contain personal information should be shredded before they are discarded. Outgoing mail should never be placed in your mailbox. Instead, use U.S. Postal Service collection boxes. As for email, don't answer any email that appears questionable or from anyone wanting critical personal financial data, like your Social Security number. That's a recipe for disaster.
  • Challenge unauthorized bills. Don't pay for any fraudulent bills that result from identity theft. This means that you will have to contest credit card charges with your credit card company. Follow your credit card company's directions for disputing charges.
  • Take direct action. Self-detection is key to discovering fraud promptly. Monitor your credit at least weekly (preferably daily) through online account access and request a credit report each year to spot fraudulent accounts. Free annual reports are available at www.annualcreditreport.com.
  • Hire a credit monitoring service – A good, professional credit monitoring service can serve as your eyes and ears – both online and off – and let you know if your personal financial data has been compromised. Most reputable ones cost $30 or less per month.
  • Report fraud immediately. If your identity is being used illegally, contact all three major credit bureaus – Equifax, Experian, and TransUnion – to place a fraud alert on your credit reports. File an official "identity theft report" with your local police, a state or federal agency or the police department in the town where the theft occurred.


  • You aren't responsible for more than $50 if an unauthorized person uses your credit card, under federal law.
  • Photocopy the information inside your wallet in case it is ever stolen.

One last tip: Inspect your credit card statements each month before paying them, and check them more frequently online. That act alone should help ensure you'll catch a fraudulent charge immediately.

Identity theft is serious business. Avoid getting caught off guard from one of the worst financial nightmares of your life. For a full list of tips on safekeeping your identity, Credit.com has compiled a checklist here.