The terms identity theft and identity fraud are often used interchangeably
They are closely related, but they describe different conduct.
Identity theft generally begins when someone steals another person's identifying information. Identity fraud can follow when that stolen information is actually used to deceive others, obtain money, open accounts, or carry out other fraudulent activity.
For California consumers, that distinction matters because the theft of personal information can be only the beginning of a much larger financial problem.
Once stolen information is put to use, victims may find themselves confronting fraudulent accounts, debts they never incurred, damaged credit, and collection activity tied to someone else's conduct.
IDENTITY THEFT — WHEN YOUR PERSONAL INFORMATION IS STOLEN
The attached source describes identity theft as occurring when someone steals another person's identifying information for financial or other personal gain. The information involved may include highly sensitive personal details.
For example, the source describes a hacker stealing information such as a consumer's:
Full name
Social Security number
Date of birth
Those pieces of information can be valuable because they may allow someone else to impersonate the consumer.
But stealing the information is only one part of the problem.
IDENTITY FRAUD — WHEN STOLEN INFORMATION GETS PUT TO WORK
Identity fraud generally involves using stolen identifying information to carry out fraudulent or deceptive activity.
The source identifies examples such as opening accounts in another person's name or filing false tax returns.
This creates a useful distinction.
Identity theft concerns obtaining the identity information.
Identity fraud concerns using that information.
The two can occur as part of the same scheme, but they do not necessarily have to be committed by the same person.
THE THIEF AND THE FRAUDSTER MAY BE DIFFERENT PEOPLE
One of the source's examples demonstrates how identity theft and identity fraud can occur in sequence.
A hacker may steal a consumer's full name, Social Security number, and date of birth from an online database. That act constitutes the theft of the consumer's identifying information.
The hacker may then sell the stolen identity to another criminal.
That second person can use the information to obtain large loans in the victim's name, turning the stolen information into identity fraud. For the victim, this distinction may not be immediately obvious.
The consumer simply discovers that someone they do not know has created financial activity in their name.
ONE STOLEN IDENTITY CAN CREATE MULTIPLE FINANCIAL PROBLEMS
Once personal information has been compromised, a consumer may not know where or when it will be used.
Stolen information can potentially be passed from one person to another before fraudulent activity occurs.
When identity fraud follows, the victim may discover accounts or debts that appear legitimate on paper because the fraudster used the victim's identifying information when creating them.
That can force the consumer to establish that the financial activity was fraudulent rather than their own.
FRAUDULENT ACCOUNTS CAN BECOME CREDIT REPORT ERRORS
One of the most damaging consequences identified in the source involves fraudulent accounts and debts appearing on the identity theft victim's credit history. An identity thief may obtain a loan or open another account using stolen information.
When that account is not paid, the resulting negative information can become associated with the victim.
The consumer may then be dealing with two related problems — the original identity theft and inaccurate financial information connected to the resulting fraud.
That is why consumers who discover identity theft should pay close attention to their credit reports.
FRAUDULENT DEBTS CAN ATTRACT DEBT COLLECTORS
Identity fraud can also lead to collection activity.
A fraudulent account may eventually become delinquent and be transferred or sold for collection.
The debt collector may see an account containing the victim's name and identifying information and assume that the debt legitimately belongs to that consumer.
The victim knows otherwise.
The attached source specifically discusses the importance of clearing fraudulent accounts and debts associated with identity theft, including preventing debt collection activity involving those obligations. What Should I Know About Identi…
Consumers receiving collection communications concerning unfamiliar accounts should preserve those records.
KEEP EVIDENCE OF THE THEFT AND THE FRAUD
When identity theft progresses into identity fraud, documentation can become particularly important.
Consumers should consider preserving:
Credit reports showing fraudulent accounts
Loan or account documents they did not authorize
Collection notices involving unfamiliar debts
Bank or credit card statements showing unauthorized activity
Data breach notices
Correspondence concerning fraudulent accounts
Identity theft reports
Disputes concerning inaccurate credit information
Responses received after those disputes
The goal is to create a record showing both the misuse of the consumer's information and the financial consequences that followed.
IDENTITY THEFT CAN CREATE ECONOMIC AND NON-ECONOMIC LOSSES
The attached source also recognizes that identity theft and fraud may cause both economic and non-economic damages.
Economic losses can arise from the direct financial consequences of fraudulent activity.
The source also recognizes that victims may experience non-economic harm.
The availability and extent of any legal recovery depend on the circumstances of the particular case, the parties involved, and the applicable law.
Consumers should therefore preserve documentation concerning the consequences they experience rather than focusing only on the initial fraudulent transaction.
DATA SECURITY FAILURES MAY RAISE ADDITIONAL ISSUES
Sometimes identity theft begins because personal information is obtained from a company or other organization holding consumer data.
The source discusses potential legal action when a company's negligence in protecting information leads to identity theft and subsequent fraud. Whether a company is legally responsible for a particular incident depends on the specific facts and applicable law.
Consumers who believe their information was exposed through a company should preserve relevant breach notices, communications, and evidence connecting the compromised information to subsequent fraudulent activity.
R23 LAW'S EXPERT LEGAL SERVICES FOR IDENTITY THEFT AND IDENTITY FRAUD VICTIMS THROUGHOUT CALIFORNIA
R23 Law's California Consumer Protection Attorneys represent consumers dealing with identity theft, identity fraud, and the financial and credit problems that can follow the misuse of personal information.
An identity theft matter may begin with stolen information but expand into fraudulent accounts, inaccurate credit reporting, disputed debts, or collection activity.
R23 Law represents consumers dealing with matters involving:
Identity theft
Identity fraud
Fraudulent accounts and loans
Identity theft-related credit report errors
Fraudulent debts
Collection activity involving identity theft
Financial losses connected to stolen personal information
Other consumer protection problems resulting from identity fraud
THEFT TAKES THE IDENTITY — FRAUD PUTS IT TO USE
Identity theft and identity fraud are connected, but understanding the distinction makes the progression of the crime easier to recognize.
Someone may first steal personal information.
That information may then be sold or transferred.
Someone else may eventually use it to open an account, obtain a loan, file a fraudulent tax return, or engage in another deceptive transaction.
For consumers, the consequences can continue long after the information was originally stolen.
When fraudulent accounts, debts, or inaccurate credit information appear, preserve the evidence and document what happened.
Contact R23 Law Today
Identity theft can become substantially more damaging once stolen information is used to create fraudulent financial activity. Victims may be left dealing with accounts they never opened, debts they never incurred, and credit problems they did not cause.
R23 Law's California Consumer Protection Attorneys can evaluate identity theft and identity fraud matters and the resulting consumer protection issues.
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Email: info@R23Law.com
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