The good news is that the costs to victims of identity theft—both in terms of out-of-pocket expense and in time resolving problems—are substantially smaller if the misuse is discovered quickly. And according to the FTC, a majority of victims first detected in the fraudulent activity by actively monitoring their accounts.

WHEN DOES IDENTITY THEFT OCCUR?
Identity theft occurs when someone appropriates another individual's personal information without that person's knowledge, to commit fraud or theft. An identity thief steals another person's name, Social Security number, credit card number, or some other piece of personal information for his or her own use.

 HOW DOES IDENTITY THEFT OCCUR?
Identity thieves may obtain personal information through a number of means, including:
--Stealing wallets that contain personal identification information, credit cards, ATM cards, etc...; Pretext Calling-posing as an account holder or someone authorized to have account holder information in order to obtain confidential account holder data;
--Stealing financial statements from the mail.
--Diverting mail from its intended recipients by submitting a change of address form.
--Rummaging through trash for personal data.
--Stealing personal information from workplace records.
--Intercepting personal information transmitted electronically;
--Shoulder surfing – looking over a person’s shoulder or listening in on a person’s conversation where sensitive personal information is shared.
--Fraudulently obtaining another's credit report
--Purchasing copies of job and charge-card applications
--Phishing, carding, or brand spoofing-this occurs when identity thieves send fraudulent  but official looking e-mails that ask for verification of personal and financial information. 

They sometimes say that an error has occurred in the consumer's account that needs correcting and provide an electronic link to an official looking website where the consumer can provide the requested information.  The information is then used to steal identities, drain financial accounts, purchase merchandise, and max out credit cards.

FORM OF IDENTITY THEFT
Identity theft can take many forms:
--Account takeovers (where a thief uses the victim’s existing account as his or her own)
--Opening new accounts
--Obtaining loans
--Buying merchandise in another person’s name
--Creating counterfeit checks using the victim's account number
--A driver's license or official ID card issued in the victim's name but with the thief's picture.

 WHAT SHOULD I DO IF I’VE BECOME
A VICTIM OF IDENTITY THEFT?
If you think you've become a victim of identity theft or fraud, act immediately to minimize the damage to your personal funds and financial accounts, as well as your reputation. Here's a list -- based in part on a checklist prepared by the California Public Interest Research Group (CalPIRG) and the Privacy Rights Clearinghouse -- of some actions that you should take right away:

Contact the Federal Trade Commission (FTC) to report the situation,
whether Online:  www.consumer.gov/idtheft/
By telephone toll-free at 1-877-ID THEFT (877-438-4338) or TDD at 202-326-2502, or
By mail to Consumer Response Center, FTC, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

You may also need to contact other agencies for other types of identity theft:

Your local office of the Postal Inspection Service if you suspect that an identity thief has submitted a change-of-address form with the Post Office to redirect your mail, or has used the mail to commit frauds involving your identity;

The Social Security Administration if you suspect that your Social Security number is being fraudulently used (call 800-269-0271 to report the fraud);

The Internal Revenue Service if you suspect the improper use of identification information in connection with tax violations (call 1-800-829-0433 to report the violations).

Call the fraud units of the three principal credit reporting companies:

Equifax:
To report fraud, call (800) 525-6285 or
write to P.O. Box 740250, Atlanta, GA 30374-0250.
To order a copy of your credit report ($8 in most states), write to P.O. Box 740241, Atlanta, GA 30374-0241, or call (800) 685-1111.
To dispute information in your report, call the phone number provided on your credit report.
To opt out of pre-approved offers of credit, call (888) 567-8688 or write to Equifax Options, P.O. Box 740123, Atlanta GA 30374-0123.

 Experian
To report fraud, call (888) EXPERIAN or (888) 397-3742, fax to (800) 301-7196, or write to P.O. Box 1017, Allen, TX 75013.
To order a copy of your credit report ($8 in most states): P.O. Box 2104, Allen TX 75013, or call (888) EXPERIAN.
To dispute information in your report, call the phone number provided on your credit report.
To opt out of pre-approved offers of credit and marketing lists, call (800) 353-0809 or (888) 5OPTOUT or write to P.O. Box 919, Allen, TX 75013.

 Trans Union
To report fraud, call (800) 680-7289 or write to P.O. Box 6790, Fullerton, CA 92634.
To order a copy of your credit report ($8 in most states), write to P.O. Box 390, Springfield, PA 19064 or call: (800) 888-4213.
To dispute information in your report, call the phone number provided on your credit report.
To opt out of pre-approved offers of credit and marketing lists, call (800) 680-7293 or (888) 5OPTOUT or write to P.O Box 97328, Jackson, MS 39238.

Contact all financial institutions where you have accounts that an identity thief has taken over or that have been created in your name but without your knowledge. You may need to cancel those accounts, place stop-payment orders on any outstanding checks that may not have cleared, and change your Automated Teller Machine (ATM) card, account, and Personal Identification Number (PIN).

 Credit Freezes
A credit freeze allows you to restrict access to your credit report. If you place a freeze on your report, potential creditors and certain other people or businesses can’t get access to it unless you lift the freeze temporarily or permanently. For more information about credit freezes, check with your state attorney general’s office or visit www.naag.org

 To learn more about how to protect yourself from identity theft, please contact the following government and non-profit organizations.

Government agencies
The Federal Trade Commission (FTC) (www.consumer.gov/idtheft/): The FTC enforces various federal consumer protection laws and seeks to eliminate any unfair practices that may threaten consumers. Visit the FTC's identity theft site for more information on how to protect yourself and recover from fraud.

The Federal Bureau of Investigation (FBI) (www.fbi.gov/): Founded in 1908, the FBI provides investigative and law enforcement assistance to protect individuals from violations of the law.

The U.S. Postal Inspection Service (USPS) (www.usps.com/postalinspectors/idthft_ncpw.htm): As the primary law enforcement arm of the United States Postal Service, the U.S. Postal Inspection Service has a long, proud history of fighting criminals who attack our nation's postal system and misuse it to defraud, endanger or otherwise threaten the American public.

United States Secret Service Financial Crimes Division (www.secretservice.gov/financial_crimes.shtml): The Secret Service investigates crimes associated with financial institutions. Today, this jurisdiction includes bank fraud, access device fraud involving credit and debit cards, telecommunications and computer crimes, fraudulent identification, fraudulent government and commercial securities and electronic funds transfer fraud.

Non-Profit Organizations
Identity Theft Resource Center (www.idtheftcenter.org)

Privacy Rights Clearinghouse (www.privacyrights.org)

The National Fraud Information Center (www.fraud.org/)