Identity theft and identity fraud are terms that are often used interchangeably. Depending on the expert, each crime may be interpreted differently. Get a better understanding of how identity theft works, as well as how to handle the crime.
Identity theft and identity fraud are often used interchangeably because both acts involve stolen personal information.
The truth is that experts define these terms differently. According to some, identity theft involves stealing someone's personal information and identity fraud involves actually using that information for criminal purposes.
Here at Allstate Identity Protection, identity fraud is synonymous with identity theft. Both terms refer to stealing and using a victim’s personal information without their permission.
But the more you know about identity theft and fraud, the better prepared you’ll be if it ever happens to you.
What is identity theft?
Identity theft (also known as identity fraud) is when someone steals your information, either online or offline, and then opens accounts or gets access to benefits that don't belong to them.
Identity theft can happen in many different ways, but the result is always the same: your personal information is used by someone who’s not supposed to have access to it.
How might thieves get your personal information to begin with? In some cases, they may steal it in-person, like when:
Someone steals a wallet with a driver's license and credit card
A dumpster diver steals sensitive documents
Someone takes a picture of your screen in public
Or they might steal it digitally, like when:
A thief buys information from the dark web after a data breach
An imposter contacts by email or text to give up information
A cyber attacker sending malware that extracts personal information
Thieves can commit a host of crimes with stolen information, like these examples of identity theft:
Opening new bank accounts or credit cards
Taking out loans
Filing a tax return to claim a refund
Getting medical services or prescription drugs
Making a fake driver’s license or passport
These criminals are typically seeking financial gain, whether it’s by getting your money directly or by opening accounts in your name — and leaving you to pay.
Three tips to prevent identity theft
While no security measure can guarantee that information will always be safe, these tips can significantly lower the risk of data being compromised.
Staying alert to scammers' new (and old) tricks. Criminals come up with all sorts of ploys and stories to trick you into giving them information, like pretending to be a family member in need or a government employee who needs your attention. That's why you need to know the signs of phishing: misspellings, urgent requests, and blurry images and logos. And, even if you don’t spot any of these warning signs, it's always best to avoid sharing your private information over the phone or online.
Getting creative with your passwords. Passwords are gold for scammers since they can do real damage to your identity and finances if they’re able to gain access to certain accounts. Swap out any passwords that contain personal details for long, complex, and totally random passwords. Bonus points if you use a password manager, like the one we offer, which encrypts and stores your login info.
Turning on additional security measures whenever possible. Strong passwords are an ideal way to keep your accounts secure but, if additional security measures are available, enable them for an extra layer of protection. For example, use a virtual private network (VPN) whenever you’re online and have two-factor authentication turned on for any digital accounts. Also, ensure your device's software is up to date since new updates may enhance existing security features and fix security flaws.
Looking for more tips? Read our article on how to avoid identity theft to get more advice on keeping your personal and financial information safe.
Resolving identity theft
We see thousands of cases of identity theft every year. Thanks to our restoration specialists, we saved our members more than $5 million in 2022.
Recovering from identity theft can be influenced by many factors, including how your stolen information was used and how long it took to uncover the fraudulent activity.
How to spot identity theft
Regularly monitoring these accounts and documents can help you catch any unusual activity that could signal fraud. The sooner you catch identity theft, the easier it may be to fix.
There's no one-size-fits-all approach for returning to pre-theft status but here's a good starting point:
Request a fraud alert or credit freeze from each credit bureau (Equifax, Experian, and TransUnion).
Request a copy of your credit report from each bureau as well and check for fraudulent accounts. If you find any, dispute them directly with the bureau.
Contact the companies where identity theft has happened (for example, your bank) requesting that they freeze or close any fraudulent accounts.
It’s important to act fast when dealing with identity theft. But also, remember to stay calm and give yourself grace during this challenging time.
If you're an Allstate Identity Protection member, we’re always on standby and ready to assist you with any identity-related problems.