Credit Theft. How serious is it?

Identity Fraud on the internet has propelled credit theft into the limelight.

Using someone's credit ratings instead of your own is actually nothing new. It is almost mandated by some current financial situations. For example, a single mother on a fixed income, may at some point use her child's social security number to sign up for local utilities, rather than go without. A tough choice indeed. This is still considered credit theft however.

Here, we are referencing credit theft being committed with the sole purpose of realizing financial gain at another person's expense and detriment.

A recent Federal Trade Commission study has reported that of 635,000 complaints registered with the agency, 61% involved fraud and 39% were identity theft complaints. This study also revealed the following:

• Credit card fraud was the most common form of identity theft, accounting for 28% of thefts reported.
• Phone or utilities fraud was next, accounting for 19 % of identity thefts reported.
• Bank fraud followed, accounting for 18% of identity thefts reported.
• The FTC also presented some figures about identity theft committed over the Internet. Of 205,568 Internet-related complaints, 90 % of the victims reported they had suffered a financial loss. The average loss was $1,440.

As noted, a full 90% of the credit theft victims reported a financial loss, averaging approximately $1440! Not a small sum by any means, yet the financial loss was only the tip of the iceberg, signaling much larger hazards to come.

“The available resources in many instances will determine how an ID crime victim approaches his/her misfortune. Sadly, many victims cannot take the necessary actions to restore their good name, choosing instead to "leave it up to the authorities", the exact action the thief was hoping for.”

Victims of credit theft endure all sorts of embarrassments and get blacklisted in many ways, simply because it is so difficult and time consuming to restore their identity. And because no one is telling the creditors that they should not blacklist them! It is morally wrong to do so but what does morals have to do with profits?

Some victims never recover from the crime due to the expense of restoring their good name, choosing to live their lives as best as they can. A lifetime of "messed up" credit woes usually follow.

They endure phone calls from debt collectors all day long, bite their lip when turned down for loans and employment, and just pay the higher rates and fees insurance companies and others charge them. At the end of the year, they file their tax returns with their fingers crossed, praying their return doesn't get audited.

Unfortunately, at some point, someone invariable asks them, "What are you going to do about these outstanding debts?"

Credit theft could be a first sign of a "stolen Identity".

As we discussed elsewhere on our web site, it is impossible to 'Steal an Identity'. Put simply, by cloning an individual, you are not replacing them, you are just duplicating them. This applies to their identity as well.