What is identity theft and identity fraud?

Identity theft is the act of stealing someone's personal information and identity fraud is the use of an individual's identifying information to commit crimes.

Woman on the phone.

What is identity theft?

Identity theft occurs when someone uses information about you, such as your Social Security Number, address or birthdate to open new financial accounts, make purchases or get a tax refund. Children's personal information is particularly appealing to criminals as their information can be used to build a clean credit profile.

Today's digital society enables criminals to commit identity theft on an individual level and a broad scale. But that's not the only way a person's identity can be stolen. Some potential techniques are:

  • Stolen purses, wallets. Your purse and wallet contain crucial personal information, information that thieves can use to pretend to be you when opening new financial accounts.
  • Mail. Mail and packages can be stolen from your trash cans and porches. The information can be used to open new credit card accounts in your name.
  • Solicitations or surveys. Holiday giving solicitations and surveys are simple ways identity thieves can get your information.
  • Online shopping. It's common to shop online these days. Your favorite shopping site can be hacked and your personal information stolen.
  • Phishing. Emails are sent to potential victims with creative headlines. The criminals hope to trick you into taking an action, like clicking on a link that might give them access to your personal information.
  • Malware. Criminals attempt to get a person to download software through a website in order to place software on their computer. The software, usually offered for free, includes malicious software, or malware, that give open access to the victim's computer.

How is identity fraud different?

Identity fraud means the fraudulent use of an individual's identifying information to commit crimes, unlawfully establish credit accounts, secure loans or enter into contracts. Identity fraud occurs when a criminal uses personal information, such as a Social Security Number or credit card account number to steal financial resources.

Identity fraud does not occur when a credit card is simply stolen — it may be consumer fraud, but is not identity fraud. Identity fraud occurs when someone steals personal information, opens credit card accounts in your name without permission and charges merchandise to those accounts.

Identity fraud is a federal crime in the United States. According to the Federal Trade Commission, identity fraud is the most common form of consumer fraud.

If you find you're a victim of identity theft or fraud, contact the police and your financial institution immediately. Also consider Identity Restoration (IDR) coverage such as that offered through State Farm® to help your recover. For more information about identity fraud, visit the Federal Trade Commission website.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

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