By Colin Whitehair
ID Fraud expert, HBOS
An ID fraud expert explains the ways fraudsters try to steal your identity and what you can do to combat them.
Colin Whitehair ID fraud expert
Identity theft is a silent crime - often discovered after the damage has been done to a hard-earned credit rating.
Shredder sales have soared and this is certainly the first line of defence to prevent personal data falling into the wrong hands.
But a shredder is not enough.
Increasingly, data is held electronically, bank and utility statements delivered online and stored on personal computers.
Electronic data is potentially as vulnerable as paper-based data. Take care to restrict access to your passwords and wireless PC networks.
Be careful to dispose of old computers and hard drives by wiping data and not just deleting documents.
Special software is available for this.
Banks report a massive growth in "phishing" sites, bogus websites made to look exactly like that of the official site but designed to get the unsuspecting customer to enter account and security details that can be used by the fraudsters.
Links to these sites are generally within e-mails so the advice is not to follow links in emails but to go direct to the official website itself to access information or offers.
Recently, much has been made of data held offshore where data security legislation may not be as rigorous as in the UK.
There has been a spate of losses of laptop computers that held sensitive data, such as payroll records - meat and drink to identity thieves.
It is best to be proactive about protecting your identity.
Monitoring your personal credit file for unauthorised changes or applications is worthwhile, especially if you have suffered loss of documents in a burglary.
This enables you to contact a lender and disclaim responsibility for any fraudulent accounts opened with your details before the account goes into default and you are pursued and your credit record affected.
Insurance is an option that should include monitoring and assistance to resolve potential liabilities and restore your credit record.
Often, being declined for credit yourself is the first alert to the possibility that something is wrong - if that has happened, your credit file is probably already damaged so you have some serious work to do.
The first thing is to discover the extent of the problem.
Request a copy of your credit file from one of the UK's credit reference agencies: Experian, Equifax and Call Credit.
Your statutory report costs £2 and is available online or via a written request.
It can be difficult to read so the credit reference agencies also offer a more expensive but easier to read version as well.
Identity theft could lead to theft from your bank account
When you receive it, check for new account openings or changes of address.
Contact any company claiming outstanding amounts immediately and advise them that you know nothing about the debt because you are a victim of identity theft.
Remember this will mean that they will become the 'victim', not you, and suffer a loss so they are unlikely to accept the situation without a lot of questioning.
Best advice is to note down the date, time, name of the person you spoke to and what you agreed.
Even if you are fortunate and they agree to write the debt off immediately, you also need to ensure that your credit file is restored to the position prior to the fraud, so make sure that the company agrees to advise the credit reference agencies appropriately.
Ask that everything is confirmed to you in writing.
If the company continues to hold you liable, at least until further investigation, (which is quite likely) write to them to deny liability stating the facts as you know them.
Do not be put off if they continue to hold you liable and keep persevering because unless you do, you will not get the debt written off.
In extreme cases, you may need to get legal advice or ask a solicitor to act for you.
HOW TO AVOID ID THEFT
Do not use your mother's maiden name or place of birth as a security password
Check your credit record annually
If you move, make sure you let your bank know
Shred or rip-up post before throwing it in the bin
Never use the same password for all your accounts
Do not carry address details in your wallet
Identity thieves usually make multiple new account applications, so several new accounts may have been opened in your name.
If there is more than one company involved, you will have to go through the same process with all of them.
Being a victim of identity theft can be a time-consuming and costly process, both financially and emotionally.
Remember that you are likely to have to deal with banks with whom you have no previous relationship - they were chosen by the fraudster not you.
They may be catalogue companies or mobile phone companies who are not governed by the Banking Code.
You will want to be sure that this does not reoccur, so the final step is to file a "protective registration" with CIFAS (www.cifas.org.uk) to help protect yourself against becoming a victim in future.
Check your credit file regularly and act fast if you spot unusual activity.