When an existing credit card, debit card, checking account or other financial account is used without your permission it is “Credit Card Fraud” or “Bank Account Fraud”, not Financial Identity Theft.
When someone opens a new account as you, then it is Identity Theft.
Most people mistake Credit Card Fraud for Identity Theft. While financial fraud costs the banks and credit card companies billions of dollars, it isn’t a problem you need to lose sleep over. The banks and credit card companies replace your money, cancel the old account and give you a new account. It may be a short term pain, but it gets fixed fairly fast. The faster report it, the easier and cheaper the fix.
The real problem that can cook your goose is when a thief opens new accounts as you. They max out the credit lines and you find out about it when the collection companies start calling. “What Discover Card?” Now you have to prove it was not you who open the accounts. You have to prove you did not make all those purchases. Proving it was not you can take hundreds of hours and maybe thousands of dollars in attorney fees.
Freezing your credit is one of the best ways to protect yourself. It will prevent potential creditors, insurers, and others who do not have an existing account or business relationship with you from obtaining or accessing your credit file until you instruct the credit bureaus to unfreeze your credit report. It does not prevent companies with an existing account with you, or a collection agency acting on behalf of the existing account, from accessing your credit report. They are designed to prevent a credit bureau from releasing your credit report without your consent.
The cost and availability of placing a Credit Freeze varies by state. You can get more information from Financial Privacy Now: http://www.consumersunion.org/campaigns/learn_more/003484indiv.html
You need to place the freeze at each of the Credit Reporting Bureaus.
Fraud is when an existing account is used. Financial Identity Theft is when new accounts are opened fraudulently.