What is identity theft?

You may have seen news headlines or come across reports that mention identity theft—sometimes called ID theft. While the term may, in its simplest form, be defined as “stealing your identity,” this type of scam is actually multilayered and continuously evolving. Identity theft involves taking someone’s personal information and using it in various ways. 

While you can’t control whether or when your identity might be stolen, there are some benefits in understanding how identity theft works and why someone may want to steal your identity. You might learn how to better protect yourself and your information, along with what steps to take to help resolve issues if your identity is stolen. Here’s what to know about identity theft and how you can protect your identity.

Key takeaways

• Identity theft happens when scammers steal someone’s personal information to commit fraud.
• Criminals may steal a wallet, make fraudulent calls or install malware on devices to access someone’s personally identifying information.
• If your identity is stolen, you could contact your financial institutions, notify the three major credit bureaus and file reports with local law enforcement and the Federal Trade Commission (FTC).
• Monitoring credit reports, strengthening passwords and securing personal information—like Social Security cards and birth certificates—are steps that could help prevent identity theft.

In the realm of identity theft, identity has a special meaning. It refers to any information that personally identifies someone. This might include a person’s name, Social Security number (SSN), credit card or bank account information. It could also involve their driver’s license, address, date of birth, and any other documents or data that identify them.

Identity theft, then, occurs when someone takes another individual’s personal information without their permission. They use this personal information to carry out criminal activities.

While the exact reasons for identity theft may vary, scammers are often financially driven. They typically use personal information for their own monetary gain. For instance, they may: 

• Commit credit card fraud by opening a new card in your name
• Start new utility accounts with your information
• Sell the personal information to others for a fee
• Access your checking or savings accounts to take money out of them
• File a tax return in your name or steal your tax refund 
• Receive medical treatment by using your health insurance
• Make personal purchases such as new phones or other merchandise

The result could be a financial loss in the short term for you—though you may be able to sort this out with organizations and authorities to recover the losses. In addition, your credit report could be affected until you’re able to carry out the appropriate steps to repair the damage. Generally, identity theft also causes stress for those it impacts, and it can require a large amount of time to sort out the repercussions.  

Your personal information might appear in different places, like on a credit card, your driver’s license, your email and within online accounts. Given this, identity thieves might look for spots where they can find or access personal data. 

Here are some common ways that identity theft occurs: 

• Phishing: If an identity thief runs a phishing attack, they’ll reach out with a message, such as an email, text or phone call. It may appear to be from a legitimate place, but the scammer will ask you to provide personal information. You might be directed to a fake website where you fill in information or be asked to share personal information over the phone. 
• Stolen wallet or phone: A scammer might grab your belongings from your car, shopping cart or other place. The scammer will then look for personal information. Your wallet might be searched for items like your driver’s license and credit or bank cards. If your phone can be unlocked, the scammer might search through your text messages, apps, email and other places for personal information.
• Listening over Wi-Fi: If you connect to Wi-Fi in an area that has a public network, such as a restaurant or store, a scammer might tune in to your connection. If you enter personal information, like a password, account number or SSN, the scammer might be able to use the data.
• Dumpster diving: Someone’s personal information may appear in their account statements, paperwork or letters that end up in the trash. Scammers will sort through garbage cans to look for personal information they can use.  
• Malware: Scammers may use harmful software such as a virus, a worm, or spyware that infects computers or mobile devices. With malware scammers extract personal information from the device. Malware can be delivered by going to a malicious website or downloading a malicious attachment from an email.
• Skimmers: With this method, a scammer might place a skimming device over the card slot of a point-of-sale terminal such as a gas pump or an ATM. When someone inserts their card, the skimmer reads the personal information from the card. 
• Data breaches: A scammer might gain access to the data stored by an organization. The scammer will then search for personal information like first and last names, along with credit card numbers or other identifying details. 

Unauthorized charges on debit or credit card statements, unusual activity on credit reports and sudden, unexplained drops in credit scores may be signs of identity theft. If you suspect your identity has been stolen, it’s important to act quickly to try to prevent further damage.

If you think you’ve been a victim of identity theft, there are several steps you can take. The faster you act, the sooner you may be able to resolve any issues related to the theft. Here are some swift moves you can make:

• Contact your creditors. You can call your credit card companies and financial institutions to let them know you think you’ve been a victim. Capital One customers can also get in touch through the Support Center to get help right away. 
• Contact local and federal authorities. You might also report the incident to local officials and the federal government. You could visit IdentityTheft.gov to file a report with the FTC and receive an identity theft recovery plan.
• Contact credit reporting agencies. You can also ask the three main credit bureaus—Equifax®, Experian® and TransUnion®—for help. They can assist you in placing an alert on your file or freezing your credit report.  
• Focus on safety. For your online accounts, you can change passwords and make sure the new ones are strong. Make a note of when the theft occurred, what was stolen and what action you took. Keep a record of the conversations you have with authorities and agencies, along with any mail or documents you might receive.

Being aware of identity theft is a first step toward identifying a potential scheme. While it’s sometimes impossible to prevent identity theft, there are actions you can take to help keep your personal information safe. Here are a few ideas:

• Keep personal information close. Avoid leaving your purse or phone in the car when you head into a store or restaurant. Also, steer clear of entering personal information such as passwords and account numbers when using public Wi-Fi. Additionally, be sure to shred any documents containing personal information before throwing them away.
• Hang up or hit delete. If you receive texts or emails that look suspicious, you can report them to the appropriate company or authority. Take your mobile security seriously, and don’t click on links within messages or reply directly.
• Check your devices for spyware. Running antivirus software programs on your computer or phone can detect any malicious software that may be monitoring your activity without your authorization.
• Review security features offered by financial institutions. According to the FTC, financial institutions are typically required to have identity theft prevention measures in place. Capital One offers security features—like instant purchase notifications, card lock and paperless statements—to help protect people’s personal information. 
• Check your credit report. At least once a year, make sure the information in your credit report is accurate. You can do this by reviewing the accounts and activity to ensure you’ve authored each. You can check your credit score for free anytime with CreditWise from Capital One. You can also go to Annualcreditreport.com and get a free copy of your credit report every 12 months from Experian, TransUnion and Equifax.

While identity theft can seem complex, understanding how it works may enable you to spot it before becoming a victim. If identity theft does occur, there are resources to help straighten things out as soon as possible. Staying informed can ultimately be one of the best ways to keep your personal information safe and sound. 

Want to learn more about safeguarding personal information? Check out these tips on how to protect yourself from identity theft.