Identity Fraud vs. Identity Theft

March 3, 2008

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The FTC’s annual “Consumer Report and Identity Theft Complaint Data” [PDF] report for 2007 was recently released.  One thing that makes this report somewhat unique is that it very clearly differentiates its stats between identity fraud and identity theft.

What’s the difference?

Identity Fraud

Identity fraud, from the FTC’s perspective, is when your existing credit and debit cards are used without your knowledge. For example, someone takes your credit card number and goes on a shopping spree on Amazon.  This is the most common type, and as long as it is promptly reported, usually there is limited liability.

Identity Theft

Identity theft is when personal information, particularly information like date of birth, Social Security Number, etc. is used to hijack your name and get new credit like new credit cards, loans, mortgages, etc.  This is more difficult because now creditors are coming after you, your credit score is negatively impacted, and even medical identity theft exists.

According to the FTC’s stats, the spread between identity fraud and identity theft is growing.  In 2005 and 2006, the FTC’s total complaints were 37% ID theft and 63% fraud.  However, in 2007, true identity theft actually declined and made up 32% vs. fraud’s 68%.

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