Identity Theft

How Identity Theft Occurs

While there is no record of the first case of identity theft, the Oxford English Dictionary notes that the phrase was first coined in 1964. Identity theft can happen in different ways. Thieves can use an individual's name to rent housing, set up phone lines, or obtain a credit card. Unless individuals diligently monitor their credit reports, they might not know about the theft until a debt collector contacts them, or they receive bills for charges they did not make.

Identity theft has become a lucrative business and causes financial burdens for its victims. Some victims might have to pay hundreds of dollars and spend days recovering their credit and life from the theft. As a result of identity theft, some victims can also be denied housing or job opportunities, education loans, and other services.

Identity thieves have several ways to obtain an individual's information. The FTC lists the following methods: dumpster diving, skimming, changing a person's address, old-fashioned stealing, pretexting, and phishing. With dumpster [Page 494]diving, identity thieves search through a person's garbage for bills and other documents containing personal information. Thieves can also extract information from credit or debit card numbers by skimming, which is the use of a special storage device to process their victims' cards. Thieves can change a victim's address to redirect his or her billing statements to a different location by filing a change of address form. They also use old-fashioned methods of stealing, including misappropriating wallets, purses, bank and credit card statements, pre-approved credit offers, new checks, or tax information. They can also steal personal records or bribe those with access to them. Pretexting takes place when thieves make false pretenses to acquire personal information from financial agencies, telephone companies, and other institutions.

Phishing

Theives who “phish” for personal identity data pretend to be representatives of financial institutions or businesses, sending their victims spam or pop-up messages via the Internet in order to get victims to give them personal information. Of all the methods employed by identity thieves, phishing, also known as “Web spoofing” or “carding,” is the newest and is likely to be the most prevalent in the future given the large amount of Internet use and the wide range of business activities conducted online. Looking at client-side defense against Web-based identity theft, Neil Chou and his colleagues from the Computer Science Department at Stanford University predict that phishing will continue to be a problem in the years to come.

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