Identity theft 101: what is existing account fraud?

July 21, 3:34 PMIdentity Theft ExaminerJoe Campana

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The most recognized type of identity theft is “existing account” fraud. This type of identity fraud occurs when an identity thief misuses an existing credit, debit, bank, credit union, trading, retirement or other account of a victim. When the misused account involves a financial account, the crime is financial fraud punishable under various laws. Other types of accounts that can be misused include telephone and email accounts.

Existing account fraud is easy for journalists to understand and to describe in a few words and easy forconsumers to understand. Consequently, it is frequently reported. The excessive reporting on existing account fraud is unfortunate because existing account fraud is what most people know to be identity theft, even though it may be the least harmful and the easiest to correct. Consequently, some consumers believe that if you do not have financial accounts, you are safe from becoming a victim of identity theft.

You can become a victim of identity theft even when you do not have to have a financial account or good credit. This is why child identity theft is a growing crime.

Credit card companies appear to be cooperative in fixing fraudulent charges and replacing misused credit cards. Some victims report that banks are not easy to work with when bank accounts are compromised. Victims report that banks are reluctant to close their accounts and to restore stolen funds without extensive prior investigation allowed for under banking laws. This delay in taking action intensifies the emotions of victims and has left victims with unusable or frozen accounts for several days.

Some identity theft experts do not consider existing financial account fraud to be identity theft. For example, you unknowingly drop your credit card fueling at a gas pump. After you leave, a person arrives at the pump, picks up your credit card from the pavement and swipes your card to pay for a tank full. Afterwards, they leave the card on the payment or turn it in to the attendant. Is this identity theft?

Today, we consider account numbers to be personal identifiers, as reflected in most identity theft laws, thus making this type of fraud identity theft by statutory definition. Identity theft laws generally require the use of a first name (or initial) and last name to be used in combination with a personal identifier. However, let’s say in the previous example, that the teenager didn’t take note of the name on your credit card, they just swiped the card and left it behind on the payment. Did they just use your card, or did they steal your identity?