While all types of theft cause fear and distress, identity theft is in a league of its own. If a thief steals a $50 bill the impact is limited to the loss of that money. However, when a thief obtains personal details the potential for damage is magnified. The US Office of Justice found that 17.6 million Americans became victims of identity theft in 2014, with bank account and credit card information thefts the most common of these crimes.
1. Financial Cost
Financial damage is one of the most obvious effects of identity theft. The form the damage takes depends on the nature of the identity theft. A thief using a stolen debit card to withdraw cash from an ATM or buying goods from stores or websites with a stolen credit card are classic causes of financial loss.
Often the initial loss sets events in motion that cause further losses. If checks bounce the account owner incurs fees and higher interest charges. Further down the road the victim might have to pay legal fees. Identity theft can also affect credit ratings and make it more difficult to obtain loans on good terms.
Even though a proven victim of an identity theft can often recover most if not all of the financial costs incurred, reparations don’t come immediately.
It might be of some comfort to know that the Office of Justice survey showed that most people suffered losses of under $100. However, although this amount maybe insignificant to a wealthy person there are many students, unemployed and elderly people who for whom $100 is a sizable sum. The financial costs of identity theft are only meaningful in relative terms.