What is identity theft?

Identity theft refers to a criminal act where an individual unlawfully assumes another person's identity, often to gain financial benefits, access services, or commit fraud. This can include using someone else's personal information, such as their name, Social Security number, bank account details, or credit card information, without their knowledge or consent. The goal of the identity thief is to exploit the victim's personal information, leading to financial loss or damage to the victim's credit status.

Understanding this definition highlights the serious impact identity theft can have on the victims, as it often leads to considerable time and effort spent resolving the issues it causes—such as restoring one’s credit or dealing with legal matters. Awareness of identity theft is crucial in personal finance, as individuals must take steps to protect their information in an increasingly digital and interconnected world.