Identity Theft vs. Identity Fraud: What’s the Difference?

Thousands fall victim to identity theft and identity fraud each year. However, few know the difference between the two. While they may seem similar, identity theft and identity fraud are two different crimes that have different effects on your finances and credit depending on their severity. Understanding these differences may help you better protect yourself and prepare you to fight back.

Identity Theft

Identity theft is the criminal act of stealing personal, private, or financial information with the intent of using it to assume another person’s identity. Most often, the stolen identity is used to make fraudulent purchases or to open credit card and bank accounts. Additionally, a fake identity can impact healthcare claims, taxes, and even criminal records. While many pieces of information can be stolen and used by identity thieves, there are a few important things that you should always keep safe and be careful of sharing:

  • Name
  • Social Security Number
  • Birth Date
  • Address
  • Passwords
  • Credit Card Numbers
  • Bank Accounts

How thieves obtain or steal your identity can happen in many different ways. In some cases, a stolen wallet is all it takes. With this, thieves usually have access to your ID, credit cards, bank cards, and more. A lost smartphone also provides criminals with a variety of personal information to use. Other methods include home burglary, computer hacking, and unsafe internet connections or online transactions. Protecting your personal information is the best way to protect yourself from identity theft. 

Identity Fraud

If identity theft is the act of stealing personal, private, or financial information, then identity fraud is the use of this stolen information. This crime affects both the individuals whose identity has been stolen and the businesses where the stolen identity has been used to make fraudulent transactions. Additionally, the fake identity used doesn’t necessarily have to be that of someone living, or even real. Thieves often assume the identity of the deceased or create fake identities of people who never existed to commit a crime. Some examples of identity fraud include:

  • Fake ID or passport
  • False credit card accounts
  • False bank accounts
  • False loan applications
  • Fraudulent withdrawals
  • Fraudulent transactions
  • Fake criminal record

Once it has occurred, identity fraud can have a lasting impact on your credit score. The accounts and charges that thieves fraudulently create may still appear on your credit report and be your responsibility until disputed. Checking your credit report regularly is a good way to protect yourself from identity fraud. Search for any accounts or debts that you do not recognize and contact the business or credit bureau immediately to inform them that your identity may have been compromised. The more vigilant you are, the more likely you will be able to protect yourself from identity fraud.

Understanding the difference between identity theft and fraud is crucial in protecting  against and resolving  the crime. Your credit score is important and needs to be protected. Although it may take work, keep your private information safe. Doing so may help prevent you from becoming a future victim of identity theft or fraud.


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.

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