Identity theft occurs when a criminal uses someone else's personal information like name, SSN, or credit card numbers without permission to commit fraud. Thieves can steal information directly by taking wallets, mail, or online data, or indirectly through dumpster diving or changing addresses. Victims should contact credit bureaus, close fraudulent accounts, file a police report, and get more information from the FTC website or brochures. Steps to reduce risk include using passwords, securing personal data, being wary of sharing information, and properly disposing of documents with financial information.