There are many different types of identity theft.  Financial identity theft is one of the most common ones where the identity thief gets hold of your bank account number, debit card or credit card and uses it to process fraudulent transactions.

However, what if they open up a new credit card account using your identity?  Or if they use your identity to purchase a house, get a procedure done at the hospital, open up a utilities account in your name, purchase an automobile in your name or get employment using your identity?

These as just some of the transactions where the bank or credit card company would not contact or inform you because they think that you are the one initiating these transactions not knowing that someone stole your identity.

The other thing that you have to consider is that your credit cards and bank account might have a time limit wherein you need to report the identity theft in order to get the full reversal of the amount that was stolen.  After that you might have to cover some of the loss yourself.  You should check with your credit card provider or bank for details.

When it comes to identity theft prevention, being proactive in keeping on top of your identity is the best solution.  In the end the burden of proof lies with you to make sure your account is in order.  As Benjamin Franklin said “an ounce of prevention is worth a pound of cure”.