How does identity theft happen?

Preventing identity theft begins with the question, “How does identity theft happen?” Understanding how identity theft works can help consumers protect themselves from scams and other fraudulent scenarios. Of course, with rapidly developing technology and increasingly imaginative criminals, the causes of identity theft continue to evolve. Below, we’ve outlined common identity theft causes, but consider it a jumping-off point rather than an exhaustive catalogue.

Lost or Stolen Personal Documents

Although consumers store more and more information online (and large-scale data breaches can quickly affect thousands), studies indicate that a stolen wallet or purse remains one of the top explanations for how identity theft happens.  A typical person’s wallet contains an abundance of sensitive personal details, such as credit cards, driver’s license, and sometimes even Social Security number, which identity thieves can use to charge purchases, open new lines of credit, obtain housing, and apply for loans. 

Of course a wallet is just one of the physical resources an identity thief can leverage. Consider these as well:

Digital devices: Smartphones, laptops, tablets, and wearables all put email, banking, and more right at the user’s—and would-be identity thief’s—fingertips. Neglecting regular software updates and not using a passcode leave you especially vulnerable.

Mail: Do you use a secure, locked mailbox? You should, considering that both incoming and outgoing mail can include bank statements, checks, tax documents, and pre-approved credit offers.

Trash: Identity thieves aren’t above dumpster diving, so shred sensitive documents, such as financial statements and health insurance claims, before throwing them out. Even prescription medicine leaflets are a liability.

Get tips to prevent identity theft from ever happening.

Insecure Online Data

The digital era has brought many conveniences, from making purchases without leaving home to viewing accounts and paying bills with the click of a mouse. While our increasingly paperless lives may lessen the risk of off-line causes of identity theft—such as stolen mail or trash—they also render us vulnerable in new ways. Here are a few examples:

Unsafe connections: If you’re using the internet without a firewall and antivirus software, you could fall prey to hackers who might steal your personal information.

Insecure websites: When shopping online, only trust reputed businesses with a secure (https) domain.

Password security: Creating easy-to-guess passwords, applying the same password across multiple websites, and storing all passwords in one place leaves you vulnerable.

Phishing: Phishing scams occur when a criminal poses as a legitimate entity, such as an auction site, IT administrator, or bank, and requests a target’s information via email or a fake website.

Doxing: Doxing happens when a cyber criminal obtains a victim’s personal information and then threatens to publish it online unless the victim performs certain desired actions. 

Discover more about how protect yourself from identity theft online.

Company-Wide Data Breaches

Among the leading causes of identity theft, data breaches stand out as they can rapidly impact a massive group of people. Consider the 2013 Target incident, where hackers gained access to the credit card information of millions of shoppers at the major national retailer.  At the most fundamental level, a data breach occurs when secure information gets released—whether through a malicious act or by accident—to an unsafe environment. Aside from credit card numbers, a data breach may leak victims’ email addresses, passwords, Social Security numbers, and even those same personal identifiers of victims’ family members.

Disclaimer: The information posted to this site was accurate at the time it was initially published. We do not guarantee the accuracy or completeness of the information provided. The information contained in is provided for educational purposes only and does not constitute legal or financial advice. You should consult your own attorney or financial adviser regarding your particular situation.

Advertiser Disclosure: TransUnion Interactive may have a financial relationship with one or more of the institutions whose advertisements are being displayed on this site. In the event you enter into a product or service relationship with any such institution through the links provided on the site, TransUnion Interactive may be compensated by such institution. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TransUnion Interactive does not include all credit card companies or all available credit card offers.

Get smarter about your credit - Sign up for TransUnion email & get:

Monthly Tips

Get advice on key topics: credit cards, personal loans & more

Our Newsletter

Find out about the latest trends in credit and identity protection

Featured Offers

Be in the know about new deals from our partners

Unsubscribe at any time

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thanks! We'll get back to you soon.

We're sorry, your request failed. Please try again in a little while.