Financial identity theft is what happens after there is an identity theft. When the thief has accessed your personal information, this is then used to gain undue advantage and possession of an existing account. The goal of the thief or thieves is to get payment using credit which will be taken in your name or when they use your details to siphon out money.
Usually in this case of theft the thief uses a credit card which is in the name of the victim or could get a credit card in the name of the victim using the details of the victim. When the thief does not pay the bills, the debt is then reported to the credit report of the victim.
www.AnnualCreditReport.comand sites like it are created so as to help individuals protect themselves or atleast be aware of the identity theft or credit fraud. This they do by sending Free Credit Report Annual statements.
This however is not the only kind of identity theft. Sometimes, the thief uses a credit card account which is existing and uses it for making charges. The identity thief will contact the person that has issued the card and usually they change the address of the billing so that the victim will not realize that their identity has been stolen.
Identity thieves sometimes prey on helpless and unsuspecting people and trick them into making them give out information. This they do by posing as employees of the bank or a government department.
Sometimes identity thieves use computers where they store details of the information that is there on the credit card strip or the ATM card strip. This information gives them access to the information stored in the card.
Therefore it is best to opt for an Annual Credit Report Freeand be safe rather than sorry.