By Neil Munroe
External Affairs Director of Equifax
Neil Munroe of Equifax
Identity Fraud is now one of Britain's fastest growing crimes and costs the economy £1.3bn a year. CIFAS, the UK's Fraud Prevention Service, estimates there will be about 130,000 reported cases of identity theft this year, up from 101,000 in 2003. Neil Munroe of Equifax, a credit reference agency, offers his tips to beat the fraudsters.
Why is Identity Fraud growing?
Identity Fraud is growing at an alarming rate in the UK and it is predicted to get much worse.
With the introduction of Chip and PIN to combat credit card fraud, fraudsters are turning to new scams and Identity Fraud is proving particularly lucrative.
Your Identity is as valuable as cash.
Personal information such as your date of birth, address, mother's maiden name and passwords are now as valuable as money.
And, worryingly, this is enough information for a fraudster to open bank accounts, apply for credit cards, loans and much more.
How do fraudsters obtain the information?
Some fraudsters are just opportunists. If you have just moved house then the new tenant might receive some of your mail and try their luck at opening an account in your name.
But other fraudsters are more sophisticated. Some criminal gangs pay homeless people to go through rubbish bins for receipts, bank statements or filled in application forms.
Other gangs will ring you at home, purporting to be your bank or other financial organisation to request personal details.
The growth of online banking and online payment methods for goods has caused an increase in online fraud. Rather than phoning you to ask for your details you receive an email that looks like it's from your bank. This method is known as "phishing" as fraudsters fish for passwords, PIN numbers and personal information.
To beat the fraudsters, the key is not to give out your personal details to anyone who calls or emails you.
Are you at risk of Identity Fraud?
If the answer is yes to any of the following questions, you could be vulnerable.
- Have you ever lost your purse or wallet?
- Do you keep all your credit cards, store cards and driving licence together in your purse or wallet?
- Do you use online chat rooms or belong to members web sites?
- Are all your pin numbers and passwords the same so that they are easier to remember?
- Do you use Internet banking?
- Do you regularly eat out at restaurants?
- Do you throw away receipts, bank statements and utility bills without shredding them?
What if you are a victim?
If you become a victim of identity fraud you must check all of your statements and credit agreements for fraudulent transactions and inform all creditors of your situation.
Being a victim can affect your credit rating drastically but many people do not find out they've been "cloned" until a new application for credit is refused.
How to prevent becoming a victim
Prevention is always better than cure, as it can take up to 300 hours of frustrating phone calls to deal with banks, credit card companies and other lenders if you have been such to identity fraud.
And one of the key prevention activities is to get a copy of your credit file. This way you can spot any suspicious agreements or transactions more quickly, and take immediate action to minimise the impact.
Our tips to prevent Identity Fraud
- Check your credit report frequently with all three credit reference agencies. This is the most effective way of identifying fraudsters using your ID.
- Shred statements, bills and even direct mail. These all contain vital personal information.
- When you move home redirect your mail to your new address.
- When you receive your new PIN for your card do not write it down or keep it with your card. Try to remember it and do not disclose it to anyone.
- When you go out leave all unnecessary credit cards and identification at home.
- Always check bank statements and credit card statements against receipts carefully. If you find any unfamiliar transactions contact your bank or credit card company immediately. Fraudsters often do a small transaction first to see if it is noticed.
- Beware of disclosing information to strangers or on the Internet.
- If you think you have been a victim of Identity Theft you should consider subscribing to the CIFAS Protective Registration service. A notice will be placed on your credit file indicating that documents have been stolen and that you may therefore be at risk of identity fraud. To register telephone 0870 010 2091.
The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.