Identity theft is exactly what it sounds like – the acquisition or theft of enough of your personal data for someone else to assume your identity. And identity fraud is the use of this information for financial gain (at your expense!), or to create a front for a number of illegal activities. It is commonly used to:

Hide a criminal’s identity – to assist with illegal immigration, money laundering or drug running

Hide from previous convictions – by disqualified drivers, paedophiles, bankrupt individuals, wanted criminals, bigamists

Commit financial fraud – credit card, loan and mortgage fraud, welfare benefit fraud

Identity fraudsters will target your driving license, passport and bank details, but will also go after your birth certificate, national insurance card and other documents containing proof of your name and address, which can later be used to set up accounts and carry out transactions in your name.

Identity Fraud: ID Theft

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Identity thieves need to get their hands on your personal information to carry out their fraud. And unfortunately too many of us make it too easy for them to get it! Typically this information might be taken as part of a burglary, through slack security on your Internet connection or, most alarmingly, straight out of the bin bags on your own front doorstep! Here are some of the most common methods:

Burglary, mugging or car theft – a burglar is now more likely to target your bank statements than your wide-screen TV, as they are easier to carry and are worth just as much to the right people.

Bin raiding or dumpster diving – why should a burglar bother breaking into your home for your valuable personal information, when too many of us just leave it out on the street once a week on bin day?

Shoulder surfing – again, the burglar doesn’t need to break into your home when he can just peer over your shoulder and take the information free of charge when you pay for goods over the phone, fill in application forms in public or drop your receipts on the floor.

Card fraud – card swiping technology is now widely available for fraudsters to steal your details from a rigged ATM machine or from behind the counter of a bar or restaurant.

Phishing – the practice of sending out thousands of random emails purporting to come from banks, financial institutions and even eBay, asking for your account details and passwords - and then emptying your account if you are foolish enough to respond.

419 Fraud – named after the relevant section of the Nigerian penal code – the practice of sending out unsolicited letters & emails purporting to come from a prince, high ranking official or lawyer, offering huge financial rewards in exchange for your help in transferring their money into the UK. The fraudsters are either after your bank details or an 'advance fee', which you will obviously never see again.

Identity Fraud: ID Fraud

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Most of us are aware of the existence of identity theft, but perhaps we are not all aware of the extent of the problem. Recent research by information agency Experian suggests that 18% of the US population have been victims of some form of identity theft, with those under 30 most likely to have their identities stolen. And it is now a serious and growing problem here in the UK, with over 100,000 cases of false identity or impersonation fraud committed in 2004 alone.

Once the fraudsters have your identity they will use it to:

Borrow money in your name – by applying for credit cards, loans, finance, mortgages and welfare benefits – none of which they will repay, because the trail (and the debt) will lead back to you!

Buy goods in your name, over the Internet or by mail order, which they will then sell on for hard cash. Again the bill for these goods will arrive at your doorstep.

Travel incognito in your name around the world without raising the suspicion that their own names might otherwise cause.

Identity theft causes a number of problems:

Financial loss – the theft of your existing savings as well as new debts being built up in your name

Damage to your credit history – black marks being put against your credit record and reducing your ability to obtain any further credit of your own

Emotional trauma

Damage to the economy – caused by increased illegal immigration, drug couriers, money laundering and financial fraud against the UK benefits system.

Whilst the recent advent of 'chip & pin' technology has radically cut down on the level of bank card fraud in the UK – it is also expected to result in an increase in other forms of identity fraud as the criminals switch their focus to easier and more lucrative targets.

Identity Fraud: Prevention

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How can you protect yourself? Whilst we have no control over the security measures implemented by the various government departments and companies holding our personal information, we can all take precautions to ensure that our own records don’t fall into the wrong hands:

Computers – install a virus checker and firewall onto your home computer; never give out your login details to unsolicited emails purporting to come from your bank or other secure sites; never use an Internet café for banking or secure online transactions - the current generation of Trojans and spyware viruses are quite capable of recording your every keystroke from an infected pc.

Mail & redirected mail – Protect your mail, ensure that you notify all your banks, insurers, mortgage lenders and pension funds whenever you move home and arrange for all remaining post to be redirected to your new address for at least a year after you move.

Household rubbish – buy a shredder for all your old bank statements, financial documents, utility bills, receipts and other correspondence containing your personal details. You wouldn’t leave the keys to your house on the roadside – why leave your bank account details and access to your lifetime savings out on that same road?

Cash machines – whilst your bank cards are now more secure with the chip & pin technology, you still need to be alert to people peering over your shoulder to get your pin and subsequently stealing your card. Never store your PIN numbers about your person.

Trusted suppliers – don’t give out your credit card or payment details over the phone or Internet unless you know exactly who you are dealing with.

Unusual activities – check your bank statements for any unusual payments going through your account and ask for a regular copy of your credit report from the credit reference agencies, to check that no-one is applying for credit in your name.

Above all, protect your personal documents in the same way as if they were cash – keep them secure and don’t give away personal information without being completely sure who you are dealing with.

Identity Fraud: Insurance

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We can all do more to reduce the risk of our becoming victims of identity fraud. But we can never completely eliminate the chance of it happening to us. This was highlighted in the last year when a British journalist bought confidential customer records from a dishonest bank employee in India, whilst in Dec 2004 Philip Green, millionaire owner of BHS, was the victim of an elaborate fraud involving the criminals re-registering one of his business addresses and taking out further debt in the company name.

Practising the measures highlighted in this article can severely reduce the risk of us becoming victims ourselves. But if we want complete protection, we need to take out an insurance policy.

CPP, a leading international consumer assistance business with over 20 years experience of consumer protection, offers two unique Identity Protection insurance products aimed at resolving and preventing identity theft.
Identity Protection Plan Alert offers up to £50,000 insurance cover to help cover the costs of restoring your name should you be a victim of identity theft. It regularly monitors your credit report, alerts you if credit is taken out in your name, and if the worst happens, offers comprehensive resolution services including a personal case worker to help resolve your case. All this valuable security costs an annual fee of £59.99, or just £4.99 a month if you pay by Direct Debit.

Identity Fraud: Victim Support

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There are a number of indicators to alert you that you may have been targeted by identity fraudsters:

You may receive bills, invoices or statements relating to accounts that you are not aware that you have opened.

You may not be receiving regular mail deliveries, or you may be missing important documents that you have been expecting.

You may notice unknown transactions going through your bank account.

You might have been robbed, burgled or mugged and the thieves may have made off with your personal information or documentation.

If you do become a victim, act quickly to lessen the damage:

Inform the card issuer of any affected bank cards ASAP, by phone and in writing.

Contact any organisations writing to you or appearing on your bank statement without your knowledge.

Get a copy of your credit file from one of the credit reference agencies to assess the extent of the problem.

Contact the police and report this as an identity theft.

NHTCU – http://www.nhtcu.org/ – the National High-tech Crime Unit - part of the National Crime Squad, working to combat national and transnational serious and organised hi-tech crime both in the UK and abroad.

CIFAS - http://www.cifas.org.uk/ - a not for profit association set up by the major banks and lending organisations to prevention financial crime. CIFAS provides a range of fraud prevention services, including a fraud avoidance system used by the majority of the UK’s financial services companies.

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