Identity fraud: Are you protected?

Credit cards

About 140,000 British consumers fall victim to identity fraud each year, costing the economy an estimated £1.7 billion. And all the evidence indicates that this figure is rising. We examine how you can protect yourself from the identity fraudsters.

A recent survey by life assistance firm CPP shows that one quarter of identity fraud victims in Britain took no further action to protect themselves, and 1 in 5 victims admitted they either don't understand how they can secure their personal data or are too lazy to take action.

“Everyone has an identity so everyone is at risk,” says Danny Harrison, an identity theft expert with CPP.

“Given that identity theft can take months to resolve and can ruin your credit rating, it's worrying that many victims have not put simple measures in place to stop it happening.”

If you wish to protect yourself from this increasingly common form of fraud, you need to familiarise yourself with the dangers and take the necessary steps to prevent it.

Identity fraudsters are devious and use a number of methods to compromise your personal identity. By far the most common is 'bin raiding', where potential fraudsters will search your rubbish for household bills or bank statements in a bid to gather private information about you.

You may also receive phone calls or online requests looking for your personal details from people pretending to be from your bank or a marketing company. Some criminals will even go to the Public Records Office to gather information about you.

If someone gets hold of your name and address they can buy replica identity documents such as utility bills or bank statements online. These near perfect forgeries and can be used as identifying documents to take out new lines of credit in your name. The websites that provide these forgeries are hosted offshore so there is nothing that can be done about shutting them down. So do not give out your details unless absolutely necessary.

Common types of fraud

Lower end identity fraud like catalogue fraud and mobile phone fraud is by far the most common as it is the easiest for criminals.

“The more the criminals want to defraud, the harder it gets so things like bank account fraud or mortgage fraud are not as common but yield much higher amounts,” says Danny Harrison.

However, it does happen and if someone gets enough information about you they can drain your account of funds or even set up another bank account in your name.

The average person who has been a victim of identity fraud in Britain has lost in the region of £6,000. However, Danny Harrison feels that fraudsters are becoming more confident so this figure could go up, and pointed to one case where a woman in the United States had $500,000 taken out under her name.

Protecting yourself

So what can you do to protect yourself? Firstly, be aware of and look out for the tell-tale signs that your identity has been stolen. Look out for things like:

  • Accounts on your credit report that don't belong to you.
  • Welcome letters from credit card companies or loan companies that you have never heard of.
  • Calls from debt collection agencies looking for money you haven't borrowed.
  • Failure of expected mail such as bank statements to arrive.
  • Unexpected refused credit.
  • Unexpected entries on your bank accounts.

If you bank online, you should check your accounts at least every few days to make sure there are no unexpected transactions.

However, prevention is the best option. Here are some of the steps you can take to prevent your identity being compromised:

  • Make sure your post is secure and know when to expect bills and statements.
  • Keep your personal information safe.
  • Never write down PIN numbers, passwords or usernames.
  • Shred all documents containing personal information before you throw them out,
  • Make sure you tell your bank, credit card company, lenders and utility providers when You move house, or have your mail redirected.
  • Keep all important documents that you keep in your home safe. Many burglars now raid houses solely to access your personal information.
  • If you bank or make other transactions online, make sure you have the latest security software installed on your PC.

And Danny Harrison gives this advice: “If someone asks for your personal details on the telephone or on the street, ask yourself why they would need them. Your bank, for example will have all of this information already so should never ask you for it again. This, of course, applies to online enquiries as well.”

Advice for victims

If you find you have fallen victim to identity fraud you should immediately open dialogue with the institution connected with the fraud and inform them that you were not involved in the transaction. To help you identify exactly where the fraud occurred, get a copy of your credit report and write to all institutions to have transactions under your name stopped.

To prevent against further fraud you could also apply for protective registration with CIFAS, the UK fraud prevention service. This puts an extra layer of security on any transactions you might make, such as taking out lines of credit.

Unfortunately, victims of identity fraud can suffer far more trauma and stress than simply losing money, and it can take months to recover. Your credit rating may be ruined, you may be liable for legal fees and you will have to close all of your accounts and open new ones if you truly want to protect yourself against further fraud.

Following the tips and advice above should go a long way towards protecting you from identity fraud. However, it is also possible to buy identity fraud protection from companies such as CPP. For about £60 a year you will get £50,000 insurance cover against identity fraud, free credit reports and access to the advice of an identity fraud expert, among other benefits.

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