Identity fraud is related to impersonating someone, stealiung his identity or pretending to be one, whose identity has been stolen or is being exploited by the hacker, thief or the blackmailer. In most of the cases, the identity fraud is committed with regards to some one’s personal identity, thus the culprit may palce the complete burden on the shoulders of the person, whose identity, he is exploiting. On the other hand, an identity fraud can inflict the financial losses, as if the credit card, identity card or other valuable documents can be used by the reprobates. Identity fraud is sub-divided into four categories, i.e. financial identity fraud that is using another's identity to obtain goods and services, criminal identity fraud, i.e. impersonating some body or posing as another when apprehended for a crime, identity cloning i.e. using another's information to assume his or her identity in daily life and the business/commercial identity fraud, i.e. using another's business name to obtain credit etc. Identity fraud may be used to facilitate crimes including illegal immigration, terrorism, and espionage. On the other ahnd, when a criminal identifies himself to police as another individual it is sometimes referred to as "Criminal Identity Fraud." When the criminal is arrested for a crime, they present the ID to authorities, who place charges under the identity fraud victim's name and release the criminal. It can be difficult for a criminal identity fraud victim to clear their record. Authorities might permanently maintain the victim's name as an alias for the criminal's true identity in their criminal records databases.

The culprits use various techniques for obtaining personal information of the innocent victims, i.e. dumpster diving; stealing mail or rummaging through rubbish containing personal information, shoulder surfing; eavesdropping on public transactions to obtain personal data, Trojan horses, hacking; stealing personal information in computer databases or infiltration of organizations that store large amounts of personal information etc. In some cases the criminal obtains documents or personal identifiers through physical fraud as well. In a few cases, credit reporting agencies gather and disclose personal and credit information to a wide business client base. The culprits use the identity frauids for the misuse of the credit card, identity document forgery and bank fraud etc.

A few of the reasons, which encourage a culprit for the identity fraud are,poor stewardship of personal data by organizations, resulting in unauthorized access to sensitive data, poor corporate diligence standards which can result in data breaches, failure to shred confidential information before throwing it into dustbins, failure to ensure adequate network security, the theft of laptop computers or portable media being carried off-site containing vast amounts of personal information, the use of strong encryption on these devices can reduce the chance of data being misused should a criminal obtain them, the brokerage of personal information to other businesses without ensuring that the purchaser maintains adequate security controls and failure of governments, when registering sole proprietorships, partnerships, and corporations, to determine if the officers listed in the articles of incorporation are who they say they are. All these features potentially allow criminals access to personal information through credit-rating and data mining services etc. To saveoneself, therefore from theidentity frauds, the best suitable option is of pritecting the valuable identity documents, hence barring the all the opportunities of a vantage ground on theexploiter.