One of the most common misunderstandings about identity theft is that it is limited to fraudulent use of existing credit card accounts or bank accounts (commonly referred to as existing account fraud). Consequently, many believe that if you don't have a financial account, you can't be a victim of identity theft.

I have been told often by consumers that they don't have a credit card or bank account, so they cannot become a victim of identity theft. Others have said that they have only one bank account and one credit card, and because they monitor them closely, they cannot become a victim of identity theft. These are dangerous misconceptions.Under law, account fraud that is promptly disputed with financial institutions relieves the victim of financial responsibility for the fraud if the dispute is valid. This fact leads to another misconception, which is that consumers have no liability because the financial institutions bear the full risk. Because financial institutions are not perceived as being financially harmed by fraud, identity theft is perceived as a victimless crime. Thieves, when interviewed, often state that they did not believe that their identity fraud crimes would hurt anyone.

What are some of the reasons for these misconceptions? Existing account fraud is categorized as a type of identity theft, and it is the most frequently reported type of identity theft by individuals as well as by the media. Existing account fraud is easy for news sources to explain, and it is easy for most consumers to relate to. 

Many amusing identity theft TV commercials have aired in recent years about credit card protection services. These catchy commercials have contributed to the frequency of consumers connecting identity theft to existing-account fraud. Because consumers have been highly exposed to the connection of account fraud to identity theft, many have come to associate identity theft with existing account fraud, and to nothing else.

The fact is that any child, adult or even a deceased person can be victimized by many other types of identity fraud such as new-account fraud, medical identity theft and character fraud. Victims of these types of identity theft¾even the family or estate of someone deceased¾may be exposed to financial liability in addition myriad other consequences.

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