What Is Identity Theft?

Identity theft occurs when someone obtains your personal information (your Social Security Number, credit card numbers, or bank account information, for example) and then poses as you to take over your credit accounts, open new ones, take out a loan, rent an apartment, access bank accounts, or commit many other crimes at your expense.

Most damaging of all, you often don't know you are a victim of this crime until months later, when you are unexpectedly turned down for a loan or get a call from a collection agency about an account you never opened. You might even get a call from the police about a crime you didn't commit.

Because credit card companies must limit consumer responsibility to $50 in most cases of fraud, and because many new cards include "zero responsibility" protection, some people think there is no reason to worry about credit fraud. But in its most advanced form -- identity theft -- credit fraud can cause wide-ranging long-term problems.

Identity thieves can use your personal information to take over your savings or checking accounts or open new ones. And these damages do not have limits. They may even use your good credit to get a job, take out a car loan, or rent an apartment.