I just posted on switching to Debix, and it reminded me there’s something I keep forgetting to cover.

When reading the news, both mainstream and industry, I’m appalled at the abuse of the term “identity theft”. And don’t get me started on vendor marketing materials.

Identity theft is a serious crime with potentially severe repercussions for the victim. It’s when a bad guy uses your personal information, often including Social Security Number, to use your identity for nefarious purposes. It’s most often financial, taking out new credit (which never gets paid), but can include fake ID cards (and thus driving/criminal records), passports, and more. Yes folks, there are bad guys with stolen IDs who get caught by the cops, use the fake ID, get bail, and run for it- leaving you with a nice bench warrant out in your name (really rare, but it happens).

A former co-worker once applied for a new mortgage and the bank asked him about the one in default. Oops. That’s identity theft.

(BTW- this is a problem far more endemic in the US than most other nations. They don’t rely on a single, not-secret-secret-number (SSN) to manage credit, making ID theft more difficult).

Credit card fraud is serious, but not nearly as serious. That’s when someone steals your credit card number and uses it to make fraudulent purchases. Nearly every credit card in the world (but not debit cards- for those you need to check with your bank) includes fraud protection. You, the consumer, are not liable for the fraud if you identify and report the erroneous charges. You don’t bear the costs of getting a new card if you need one. Merchants and banks (but not the credit card companies, of course) bear the costs of credit card fraud, not you.

That’s why I don’t care that my wife shops at TJX- we know to monitor our bills and if something happens we won’t be liable.

Both are crimes, but in protecting yourself it’s important to understand the difference. As a business I worry quite a bit about credit card fraud since I could bear the cost (if I accepted credit cards). As a consumer I worry more about ID theft.