What is identity theft? The short answer is that identity theft is a crime. Also known as identity fraud, identity theft involves someone obtaining and using your personal data, such as your name, address, telephone number, phone card or credit card number, mother's maiden name, and Social Security number, without your knowledge to commit a criminal act.
Most often your personal information is illegally used to commit some form of financial fraud or deception, typically for economic gain. Whether they buy something on your credit, obtain money from your bank account, or obtain new credit in your name, identity thief usually intends to obtain goods and services in your name, and ultimately leave bill with you. Since this is being done without your knowledge, it is quite possible that you could end up owing thousands or even tens of thousands of dollars before crime is even discovered.
Unlike your fingerprints, which are unique to you and can not be given to someone else to use, your personal data, particularly your Social Security number, your bank account or credit card number, your driver's license number, and other valuable identification data can be used, if they fall into wrong hands, to personally profit at your expense.
In United States and Canada, for example, many thousands of people have reported that unauthorized persons have withdrawn funds out of bank accounts, or, worst cases, taken over their identity altogether, running up vast debts and committing crimes while using victim's name and identification. In many of these cases, a victim's losses may include not only out-of-pocket financial losses, but substantial additional financial costs associated with trying to restore his reputation in community and correcting erroneous information for which criminal is responsible.
Businesses are not immune from identity theft. Upon applying for credit, a small business may discover it has a history of nonpayment of bills--debts run up by an identity thief. Thus, a business in need of a loan may get a double surprise of being denied credit and learning that it will not be able to obtain funds until it clears up accumulated debts incurred by somebody else.