According to recent statistics from the Federal Trade Commission, identity theft is the fastest-growing crime in America. It may also be the hardest to prosecute. Countless people have said, “Who would want my identity?” or “If they want to be me, then let them.” That’s a dangerous attitude. If you believe that the only effect of identity theft is on your finances, you’re wrong. The impact of identity theft on the lives of its victims can be devastating.

Through my extensive research, I have come to the conclusion that identity theft consists of three categories; financial, medical and character or criminal. According to data from the Consumer Sentinel and Identity Theft Clearing House published in February 2005, financial losses from credit cards and bank fraud amount to less than half of the reported cases, which leaves us all vulnerable to countless other schemes.

Let’s begin with defining identity theft. The FTC definition is: “Identity theft occurs when someone possesses or uses your name, address, Social Security number (SSN), bank or credit card account number, or other identifying information without your knowledge with the intent to commit fraud or other crimes.” Three categories are at greatest risk: financial losses, medical files and procedures, and character attacks that most often take shape as criminal actions by another in our good name.

The first form of identity theft is stealing your financial credit. Simply put, it is the stealing of your identity for your money. Credit card fraud is the most common form, accounting for 28 percent of all cases, followed by bank fraud at 18 percent. The criminals will set up accounts in your name using alternative addresses, use your existing bank account at another branch (with the driver’s license they obtained in your name with their picture), borrow money on your home, buy a car or furniture in another town, drain your online stock brokerage accounts; the list is endless.

Second is medical identity theft. Most of us overlook the criminal aspect of this one. The theft occurs in numerous ways: Employees of hospitals copy your files for personal information; others use your Social Security number to have procedures done like surgery or even an AIDS/HIV test; or they check into a hospital emergency room under your name so you will be billed for the charges. Another goal may be to obtain an elderly person’s insurance, Medicare/Medicaid or prescription drug benefits. Imagine if you went to your pharmacist, and they told you your prescription had already been filled in a neighboring community and they could not fill it again.

Finally there is character identity theft, a category in which employment fraud tops the FTC list at 13 percent of total cases, followed closely by criminal acts being committed in your name. One day you might wake up to a knock on your door by the sheriff’s department arresting you for an outstanding warrant in your name for crimes committed in another state.

There are many stories even more frightening than the ones above. The point is, there are numerous forms of identity theft and more will arise from this multibillion-dollar criminal industry. If you have never experienced the long-term consequences of being a victim, you might not realize the need for proper insurance or protection.

Michael McCoy is the co-author of “Who Is You: The Coming Epidemic of Identity Theft.” He is a licensed insurance agent in Iowa and a national continuing education instructor and corporate speaker on the subject of identity theft.