Identity theft is the deliberate use of someone else’s identity, usually as a method to gain a financial advantage or obtain credit and other benefits in the other person’s name, and perhaps to the other person’s disadvantage or loss.
The person whose identity has been assumed may suffer adverse consequences, especially if they are held responsible for the perpetrator’s actions. Identity theft occurs when someone uses another’s personally identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes. The term identity theft was coined in 1964. Since that time, the definition of identity theft has been statutorily prescribed throughout both the U.K. and the United States as the theft of personally identifying information, generally including a person’s name, date of birth, social security number, driver’s license number, bank account or credit card numbers, PIN numbers, electronic signatures, fingerprints, passwords, or any other information that can be used to access a person’s financial resources.
Identity theft involves obtaining somebody else’s identifying information and using it for a criminal purpose. Most often that purpose is to commit financial fraud, such as by obtaining loans or credits in the name of the person whose identity has been stolen. Stolen identifying information might also be used for other reasons, such as to obtain identification cards or for purposes of employment by somebody not legally authorized to work in the United States.
According to a United States Department of Justice study, in 2012 the direct and indirect cost of identity theft was estimated to be responsible for financial losses of $24.7 billion, approximately twice the $14 billion total cost of other property crimes. By 2014, loses to identity theft decreased to $15.4 billion, mostly due to a reduction in the number of high-value losses (the top 10% of cases). By 2016, the estimated cost of identity theft increased to $16 billion.
In 2012, In identity theft affected approximately 16.6 million people, approximately 7% of the U.S. population aged 16 or older. In 2014, identity theft affected approximately 17.6 million people, again approximately 7% of the U.S. adult population. In 2014 it was estimated that approximately one third of Americans affected by a data breach ended up becoming a victim of financial fraud in 2013, an increase from one ninth in 2010. When an existing credit card is exposed and then used for fraud, the average estimated loss is $1,251. When a Social Security number is exposed and then used to open new accounts, the average estimated loss increases to $2,330. In 2015, a private study performed by Javelin suggested that incidents of identity theft remained steady from 2014, and that the losses associated with each instance of identity theft had decreased slightly.
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