What is Identity Theft

Identity theft happens when someone uses your personal information, such as credit card number, Social Insurance Number, name, or date of birth to obtain goods and services. Because identity thieves open accounts in your name and then don’t pay back the debts, your credit rating drops. It’s important that you catch identity theft as soon as possible (the best way is to check your credit report or sign up with a credit monitoring service), and that you notify the credit bureaus, financial institutions, and the police authorities to try and clear your name.

Resolving identity theft can take a lot of time and money. While you as the victim are not responsible for paying off the debts that identity thieves incur, there are still other expenses that you must cover, such as phone bills, mailing costs, and other incidentals. The latest survey from McMaster eBusiness Research Center purports that Canadians who were victims of identity theft collectively spent $150 million and 20 million hours of time in the last year trying to straighten out the mess caused by the fraud. 

Identity theft can happen in a number of ways:

• Online. Hackers can steal your personal information from unsecure websites or wireless networks that are not encrypted. You may also receive phishing e-mails from identity thieves posing as trusted financial institutions.
   
• In stores. A huge chunk of identity theft happens during retail transactions. Clerks and wait staff have easy access to your credit card information, and can copy it for later use. This is known as card-skimming.
   
• Stolen wallets. As soon as you discover your wallet is stolen, file a police report and contact your bank and credit card companies.
   
• Mailbox and trash raiding.  Identity thieves can find a goldmine of personal information in your mailbox. Credit card and bank statements, pre-approval offers, medical bills and statements…these all can be used against you in the wrong hands. If you think your mail has been tampered with, contact the mail service immediately and keep a close eye on your credit report for any fraudulent activity.
   
• Relatives and roommates.  At least 7% of identity theft is caused by a family member or acquaintance of the victims. Parents steal their children’s identities or roommates impersonate roommates to apply for new credit cards or utilities.  Many of these cases go unreported, so exact figures are unknown.