Identity Theft

What is Identity Theft?

Identity theft is a crime in which someone wrongfully obtains and uses another person’s personal information such as their name, Social Security numbers, credit card number or other financial information — without their permission, typically for financial gain.

This stolen information is often used to commit various forms of fraud including opening new accounts, making unauthorised purchases or accessing existing accounts under the victim’s identity.

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How Identity Theft Occurs?

1. Phishing and social engineering
   • Deceptive Tactics: Fraudsters trick individuals into revealing personal information through fake emails, messages, or websites that appear legitimate.
2. Data breaches
   • Compromised Information: Large-scale data breaches at companies and organisations can expose personal information, which is then sold or used by fraudsters.
3. Skimming
   • Card Information Theft: Devices installed on ATMs, gas pumps, or POS terminals to capture card information during legitimate transactions.
4. Mail theft
   • Stealing Personal Documents: Fraudsters steal mail containing sensitive information such as bank statements, credit card offers, or tax documents.
5. Public Wi-Fi and hacking
   • Intercepting Data: Using unsecured public Wi-Fi networks or hacking into systems to steal personal information.

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What are the Impacts of Identity Theft on Businesses?

1. Financial losses
   • Direct financial losses from fraudulent transactions, chargebacks, and reimbursement to affected customers, along with costs of implementing fraud prevention and mitigation measures.
2. Reputation damage
   • Loss of customer trust and negative publicity can severely damage a company’s brand image, making it difficult to attract and retain customers.
3. Operational disruption
   • Resources diverted to investigation and response efforts, increased customer support burden, and potential system downtime for security upgrades.
4. Legal and regulatory consequences
   • Compliance costs, potential fines, litigation risks, and increased scrutiny from regulatory bodies due to non-compliance or data breaches.
5. Loss of competitive advantage
   • Slowed innovation and market position erosion due to resources diverted to address security issues, impacting the company’s competitive progress.