The Difference Between Identity Theft and Identity Fraud

A recent post on iovation.com pointed out the differences between identity theft and identity fraud.

Xenia Antunes/Flckr

“Identity theft is when someone’s personal identity information has been stolen; identity fraud is when that stolen information is used to commit financial fraud or some other kind of crime” wrote Max Anhoury.

“Identity fraud has been growing dramatically, by 22% each of the past two years” wrote Josh Smith of Wallet Pop.

“Based on the incidents reported to Travelers, the number one cause of identity fraud is old-fashioned burglary in which a wallet, purse, other personal identification, or computer are stolen. Theft of personal property was responsible for 78% of the cases of identity fraud with online issues or data breaches only accounting for 14%.”

These figures indicate that “peoples’ fears may have been, at least in part, misplaced. Individuals would benefit from an increased awareness and vigilance in all aspects of their life, not just online” states Anhoury.

“Identity theft is when a criminal steals your personal information. Identity Fraud is when a criminal uses that ill-gotten personal information in order to commit a crime or fraud all in the name of the identity theft victim.” said Joe Reynolds, Identity Fraud Product Manager at Travelers In an email he stated, “Although consumers should be concerned about identity theft, they should be even more concerned about the potential for identity fraud as the direct impact on consumers is much greater once their name is used in the course of committing a crime.”

Nevertheless, Anhoury wans that online businesses “need to be on high alert” and gives the following reasons why online sites “will likely remain the No. 1 target of identity fraud”

It’s safer to commit online identity fraud: Taking advantage of the Internet’s anonymity keeps criminals at a safe distance from their victims and the businesses they are trying to steal from. In other words, why would a fraudster risk getting caught red-handed when he could commit fraud in the comfort of his own home?

It’s more efficient: As you would imagine, today’s Internet-savvy criminals work extremely fast. Within minutes, one stolen identity can be used to apply for multiple credit cards or a stolen card can be used to charge thousands of dollars worth of goods at multiple online sites. By the time the theft is reported, the damage can be wide-reaching.

It’s easier to work in fraud rings: For ages, criminals have used whatever tools were at their disposal to organize and run their operations. Today, criminals around the globe are leveraging the Internet to work together, share information, and trade, sell and purchase stolen personal and financial information like never before.

It’s not limited by geography: Criminals that obtain stolen credit or personal information are no longer limited by their geography. With the Internet all but eliminating distance, crime can now occur anywhere, at anytime, making online businesses everywhere equally vulnerable.

So how can you avoid being caught?

Here are The Travelers Insurance’s Top 10 tips to prevent identity fraud

When Shopping Traditionally.

1.Review your wallet or purse contents before you go shopping.
2. Create a list of all your credit card and bank account information and store in a secure place.
3. Protect your Passwords and PINS.
4. Review your credit report now – and after the New Year.
5. Never provide confidential information over the phone to an unsolicited caller claiming that they represent a financial institution or creditor.
6. Never put outgoing checks or bill payments in your home mailbox, as they are easy to steal.

Online Shopping

7. Log off completely when finished with online transactions.
8. Increase up your own computer’s security.
9. Avoid e-mailing personal and financial information.
10. Delete, without replying to, any suspicious e-mail requests.