Identity Theft vs. Credit Card Fraud

Copyright © 2009 National Public Radio®. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

RENEE MONTAGNE, host:

We just heard that it's becoming harder in recent years to fraudulently use someone else's credit card and the serious nature of identity theft. To talk about the difference between the two, we've brought in Evan Hendricks. He's the editor of Privacy Times, a Washington-based newsletter that covers the information world. And tell us, in fact, what exactly is the difference between the two, credit card theft and identity theft.

Mr. EVAN HENDRICKS (Privacy Times): Well, credit card theft is you grab someone's credit card, you steal their wallet, you use their credit card to buy things. Identity theft is more complex, because you're taking people's identifiers, particularly their name and their Social Security number, and applying for credit in their name. So it's more behind the scenes. It gives you a longer time to start to get credit in someone else's name and then start buying things fraudulently.

MONTAGNE: Well, is identity theft also then on the decline or not?

Mr. HENDRICKS: No. Identity theft is roaring strong for a couple reasons. One, the bad guys have figured out that it's a low-risk, high-payoff crime, and secondly, the financial services industry refuses to change certain fundamental things, and the first of those is the overreliance on the Social Security number as an identifier. That allows for the disclosure of someone's credit report when the thief applies for credit in your name.

MONTAGNE: And does that make everything more complex, many more layers of possibilities?

Mr. HENDRICKS: Yes. Because once someone gets credit in your name, then your credit reports gets polluted by all the unpaid bills, and the irony here is the reason they're getting a better handle on credit card fraud is that the credit card number is not your Social Security number. It's a unique number, and so it makes it easier to laser in on unfamiliar patterns and practices, where the Social Security number is too easily exploited by the thieves, and that's what facilitates the disclosure of your credit report.

MONTAGNE: And, of course, you always know when your credit card's been stolen, sooner rather than later usually, because it's gone. But what about identity theft?

Mr. HENDRICKS: Well, identity theft, people usually find out--either they get a call from a collector or they're applying for an auto loan or refinancing their mortgage and, all of a sudden, people are looking at them differently because you've got all these unpaid bills, so people usually find out with a state of shock that they're a victim of identity theft. That's why we tell people to check your credit report regularly because that's where you'll find the early signs of identity theft. The sooner you find it, the easier it is to clean up the mess.

MONTAGNE: Thanks very much for joining us.

Mr. HENDRICKS: Sure, Renee.

MONTAGNE: Evan Hendricks is the author of "Credit Scores & Credit Reports."

This is MORNING EDITION from NPR News. I'm Renee Montagne.

Copyright ©2009 National Public Radio®. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to National Public Radio. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.