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Identity theft (or identity fraud, iJacking) occurs when someone wrongfully acquires or uses another person's personal data, typically for their own financial gain.  Sometimes it is referred to as "identity fraud" since the criminal impersonates rather than 'removes' the victims identity.
Most commonly, this term is used in relation to credit card fraud although mortgage fraud and other kinds of financial fraud are common. Less commonly, it is used to enable illegal immigration, terrorism or espionage. It may also be a means of blackmail if activities undertaken by the thief in the name of the victim would have serious consequences for the victim.
Techniques for obtaining information include :
stealing mail or rummaging through rubbish (dumpster diving in the USA)
eavesdropping on public transactions to obtain personal data (shoulder surfing)
stealing personal information in computer databases
infiltration of organizations that store large amounts of personal information
impersonating a trusted organisation in an electronic communication (phishing)
Spam (electronic): Some, if not all Spam requires you to respond to alleged contests, enter into "Good Deals".
Identity theft is not possible without serious breaches of privacy. If corporate or government organisations do not protect consumer privacy, client confidentiality and political privacy the execution of identity theft becomes much easier for criminals.