We've all been warned about identity theft, which is what happens when criminals get hold of your personal information and use it to pretend that they're you. According to the Federal Trade Commission (FTC), in 2005 (the latest year for which statistics are available), over 8 million American adults realized that they were victims of identity theft.

The costs of identity theft are stunning. Aside from the loss of revenue experienced by businesses, the victims also suffer financial loss. According to the FTC report, "Ten percent of all victims reported out-of-pocket expenses of $1,200 or more. For the New Accounts & Other Frauds category, the top 10 percent of the victims incurred expenses of at least $3,000, and the top 5 percent incurred expenses of at least $5,000." In addition, the survey found that the top 5 percent of victims spend at least 130 hours trying to get their identities back. If over 8 million adults were affected in a single year, the cumulative total of identity theft victims is staggering.

The FTC survey, however, was limited in scope to those who reported misuse of an existing credit card, misuse of a non-credit card account (like a checking account), or misuse of personal information to open a new account or another type of fraud. In other words, these identity theft statistics are only the tip of the iceberg.

Many Types of Identity Theft

Although we hear a lot about the crime, most people don't realize that there are several different kinds of identity theft. They include:

1. Character identity theft. Often the hardest type of ID theft to recover from, character identity theft occurs when someone impersonates you and then violates the law. You'll probably never see this when you check your credit reports, but if someone commits a crime in your name, you may be unable to find work when a potential employer checks criminal databases - or you may wind up in jail.

2. Theft of your Social Security number. When someone steals your Social Security number, it's as though they have taken over part of your life. They could, for example, use it to get a job. If that happens, you may lose unemployment benefits (because the state thinks that you're working), or be charged with tax fraud (for not paying taxes on all of "your" income).

3. Medical identity theft. With the ever-increasing cost of health care in the United States, medical identity theft is becoming commonplace. When someone else uses your name to obtain health benefits or prescriptions, you can lose your health coverage because of the false information in your medical record. This can haunt you for years, since medical databases are notoriously slow to update.

4. Driver's license theft. Similar to character identity theft, driver's license theft occurs when someone steals your driver's license number and then racks up driving offenses. When a bench warrant is issued, you could be picked up and thrown into jail. In the meantime, your insurance rates could skyrocket, or your license could be suspended.

5. Credit identity theft. This is the type of ID theft that most people hear about. In credit fraud, the thief uses your information to obtain credit cards, services, housing, and other products, and then doesn't pay the bills. Your credit - and your life - is ruined.

There are several other types of fraud that are becoming more prevalent. These include business identity theft, child identity theft, college identity theft, and eBay identity theft.

What can you do to protect yourself? The first step is to be proactive and learn more about the various forms of identity theft. There are informative online sources that will provide you with all of the information you need - whether online or through a free e-book. The next step is to take advantage of services that help provide you with identity theft protection that will not only help prevent fraud, but that will work to recover your identity should you become a victim. It's a small price to pay for peace of mind.