There are many things or personal possessions that can be owned. Sometimes these items have been purchased, received as gifts or passed down from generation to generation.

Those things may have a monetary value, they may have a sentimental value. They may be things like pictures or heirlooms that would be worth little to anyone other than the people who know their history.

The down side of owning things of value is that they may be susceptible to theft. Sometimes theft can be broadly defined as items lost to a fire, flood, earthquake, etc. In addition, there is an element in society made up of individuals who steal from others and can rob law abiding individuals of their prized possessions.

One of the most critical things that can be stolen from you is something you can't actually hold in your hand. It's your identity. Identity theft has become a very serious problem and in order to prevent it, you need to understand it.

What Is Identity Theft?

Identity theft is when one person pretends to be someone else, most often for the purpose of committing some type of fraud. This could mean accessing your banks accounts or even committing crimes in your name.

Also, to properly define identity theft, it is critical to define the negative impact experienced by the individual whose identity has been stolen. One of the negative repercussions of identity theft is financial loss. Often an identity theft crime will affect a person's bottom line as thieves access credit cards, bank accounts, etc.

Plus, if it isn't stopped quickly, this damage can have a serious impact on your good name. Credit reports, employment history, criminal records, etc. are all potential problems. Even though you are innocent, the problems are on your record. It can take years to clear your name.

How Identity Theft Works

Additionally, when asked to define identity theft, it may be beneficial to discuss how identity theft occurs. Often identity theft takes place when critical pieces of information are obtained from the individual who is being stalked by an identity theft thief.

These pieces of critical information are generally identification numbers or data that only the owner of that information is privy to. Some of those numbers could be social security numbers, personal identification numbers (PINs), passwords, a mother's maiden name, date of birth, etc.

If these numbers are obtained by an identity thief, they can use them to pose as you to banks, credit companies or other services. This personal information should never be given out glibly.

Often a company is very clear that they will never ask for these sensitive numbers unless the customer has initiated the call. In addition, often a company will only ask for the last four numbers of a person's 9 digit social security number.

Your trash is another source of this information for identity thieves. Don't ever throw out papers with personal information on it - make sure you shred it thoroughly first.