In simplest terms, it is the use of personal identifying information for an unlawful purpose.  This could include someone opening a new credit card or bank account in your name, taking over an existing account, filing taxes in your name or obtaining medical services in your name.

Some traditional ways that identity theft occur include mail theft, dumpster diving, shoulder surfing, theft of wallet/purse or burglary.  Some of the newer ways it occurs include phishing scams and skimming. 

Phishing scams are usually in the form of an email claiming to be from a business or organization that you might deal with – bank, IRS, eBay, etc.  The email usually tells you that you need to update, validate or verify account information or that there has been a problem with the account