No sooner has identity theft become the latest buzz phrase to keep us awake at night than the men in suits have moved in with a tailor-made proposition: identity theft insurance.
Any impersonators out there?
The loss of names, addresses, national insurance numbers and bank details has struck fear into millions of people that they could be defrauded.
Although identity thieves would need to crack passwords in order to access bank accounts, the missing information could be used to impersonate someone in order to buy goods or take out a loan.
In a society where data is held electronically, and bank and utility statements are delivered online and stored on personal computers, identity theft is an ever-present risk. And one which has not escaped the notice of insurers.
In February 2006 British Telecom launched insurance called BT Identity Protection for £60 a year that includes the following:
- up to £50,000 cover
- monitoring the individual's credit report and alerting any changes
registering documents like passport with BT, so details are secured on file in event they are stolen
- a personal caseworker to guide the victim "through the resolution channels" if defrauded
- providing personalised letters for the victim to send to the relevant companies
Although this product is still available to buy, a BT spokesman said this was not a product being pushed anymore because it was offered in the past in association with broadband.
"Online banking is growing so it was a natural thing to offer," he said. "If people are concerned about this, there's something we can offer but it's not something we're independently promoting."
Credit rating rescue
Another firm called Pure has been cold-calling customers by telephone, offering identity insurance. For £72 a year, cover includes a similar service to BT.
Director Justin Carty said it provides prevention measures, advice and if things go wrong, "holding the person's hand until their identity is recovered".
Correcting a bad credit rating can take hundreds of hours and having an administrator helping in the paperwork is of huge value, he says.
But others are not so sure it is. Identity theft insurance is "poor value", says Teresa Fritz of consumer watchdog Which?
Any monetary loss is already covered in the Banking Code (paragraph 12-12), she says, and means that unless banks can prove an individual acted negligently or fraudulently, they must pay up although technically can charge for the first £50.
"It's a pain if it happens to you, I wouldn't want to diminish that, and there's a lot of paperwork," she says.
"But sadly the insurance doesn't really help you that much. You get someone on the end of the phone telling you what you've to do.
"But you still have to do it - get your credit agency files and do the legwork. There's no way round avoiding the nitty-gritty."
Malcolm Tarling from the Association of British Insurers says this kind of insurance is not mainstream.
"You don't want to take out insurance for something you're already covered for. People should sit down and look at the risks they face and what protection is out there."
And buying a shredder, he says, is the best way to prevent details getting in the wrong hands.
Here is a selection of your comments..
My home insurance now gives identity theft cover free as a part of the basic cover. There is no need to waste money on specilist cover, all you are doing is giving your details to more people.
Simon Garland, Bournemouth Dorset
Oh wonderful - so we register with BT only to find that they either lose the records or sell them on? Call me cynical, however the idea of safeguarding my personal data with a multinational corporation - who knows who has access to your details?
Surely if someone can fake a person's identity, then they can defraud the insurers with said identity?