What Is Identity Theft?

"It is not just limited to credit; the theft could hit so many different avenues," says Lori Lamb, a credit correction and education supervisor with Springboard Non-Profit Consumer Credit Management. She has worked in the credit industry for 12 years. Identity theft can include credit card theft, mail fraud and even means to buy cars and property illegally.

According to Social Security.gov, identity theft occurs when someone opens an account without your permission to commit fraud or other crimes. The Federal government passed laws prohibiting identity theft, and anyone who intentionally uses a Social Security number to establish a new identity is breaking the law.

If identity theft happens to an individual, immediate steps need to be taken. Placing fraud alerts on a credit report is crucial. Fraud alerts help the consumer by not allowing the thief to open any new accounts in your name. Contact the toll free fraud number of any of the three consumer reporting agencies and close accounts that were opened. Only one of the three companies needs to be notified. The company that is contacted is required to contact the other two, and they will place an alert on their reports as well. Request to have an extended alert be placed on your report. This alert stays on your report for seven years and prevents identity theft from happening again. This also entitles the company to remove your name from marketing lists for pre-screened credit offers for five years. After contacting the agencies, follow up in writing and document everything that is said and done in case you need it for future reference.

Once the fraud alert is placed, request a free copy of your report to look over and see what damage has been done. Look for inquiries from companies you haven't contacted, accounts you didn't open, and debts on your report that you didn't charge. If there is fraudulent or misinformation, have it removed immediately and get a piece of paper stating that misinformation will be removed. Next, file a police report in the area that it occurred so that the person who stole your identity can be caught. Get a copy of the police report to show creditors who need proof of the crime.

In order to prevent identity theft, every one should monitor their credit on a regular basis.

"Take advantage of the free credit report, and always keep minimal things on you, in your purse or wallet," says Lamb.

If a person's identity is stolen, call the Federal Trade Commission and file a claim with the organization. By calling this organization, you can provide information that can help future victims and stop thieves from doing it again. Identity theft victims should continually monitor their credit for the first year to make sure the charges are taken off, and that new fraudulent activity hasn't occurred.