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Identity Theft vs. Credit Card Fraud: What's the Difference?

Technology has changed the world in a lot of strange and interesting ways. And while some crimes are easier to spot -- it's a lot harder, for instance, for a con man to pass as a pilot or a doctor now that electronic records exist  -- newer kinds of crime have emerged in their place. Crimes like identity theft can be really scary, and not knowing what you're up against only adds to that fear. So, let's take a look at what identity theft really is, and what sets it apart from credit card fraud.

Credit Card Fraud

Credit Card Fraud is a very straight-forward crime. A criminal either steals your credit card, or (more often) your card information, and they start buying things with your card, in stores or online. The (semi) good news about credit card fraud is that in recent years it's become an incredibly common crime. How is that good news? Well, banks have gotten more responsive about fixing it. Over a quarter of American consumers have been struck by credit card fraud, and three-quarters of those victims were "very satisfied" with the way their bank handled it. Many banks have started issuing new cards whenever there's a new data breach at a big national chain, in order to cut off the damage before it can even occur. Credit card fraud costs time and frustration (and can still cost you money) but these days, it's not as bad as other things that could happen to you -- like identity theft.

Identity Theft

Identity theft can technically include credit card fraud, but when people say "identity theft," they're usually talking about something vastly more far-reaching. Identity theft involves garnering personal information -- often starting with information that's readily available on the Internet with little to no effort -- and using it to pretend to be someone else. Since we use social security numbers as an identifier so freely these days, it's easy to get that, and once they have your SSN, they can discern things like the general area where you were born. They can also authorize the release of a lot of other information, just by using a name and a social security number. They can collect enough information to open bank accounts, credit cards, and loans. 

They can also file fraudulent tax returns in your name and collect exorbitant refunds while also landing you in trouble with the tax collector. In fact, the IRS identified and stopped over 35,000 known cases of that kind of identity theft this year alone. (Who knows how many they missed?) People can even use your personal information and sometimes even your insurance to receive medical care under your name. This can go on for years, and sometimes you don't even know it's happening until a collection agency shows up. Untangling the thief's records from yours and clearing your name can take a long time, and involve hassles with credit bureaus, debt collectors, and more. It's more pervasive -- and much harder to fix -- than mere credit card fraud.

What can you do?

There are a few steps to take that can help. Guard your social security number. Be careful giving out your personal information. Change your online passwords regularly and don't use the same password for everything. Check your credit report every year. You can also use a service like IdentityForce, Identity Guard, or LifeLock to protect your identity. Services like LifeLock monitor transaction information, credit card signups, and uses of your social security number, and more, notifying you and employing specialists to help recover your information and restore your good name.