Identity Fraud 101

Read on for a quick overview of identity fraud, and some of the things you can do to both fight and prevent it.

Identity fraud is something one of my close family members have experienced first hand, so I write this article having learnt a thing or two about the reality and consequences of criminals getting hold of personal data.

As more of our lives are played out online – and as we have come to rely on technology like credit cards, online personal banking and online payment systems – the higher the risk of identity theft has become.

According to CIFAS (The UK’s Fraud Prevention Service), identity fraud costs the UK £3.3 billion a year.

As shown in the chart below, there have been over 100,000 reported cases every year since 2009.

CIFAS stats

Source: CIFAS

What is Identity Fraud?

Identity fraud is basically when criminals take over someone’s identity, often for the purpose of making purchases and running up debts in someone else’s name.

Criminals have to somehow get the information first, and in particular they are looking for personal details such as:

  • Full name
  • Date of birth
  • Address
  • National insurance number
  • Passwords & PINs
  • Sort codes / Account Numbers
  • Photo ID, Passports & Driving Licenses

Always be very careful when using any of the above information, as fraudsters can use combinations of the above information – simply put – to do bad things.

There are various ways people are commonly hit by identity theft online, such as from clicking malicious links in emails or via social media, or from virus or malware infections on computers or mobile phones.

In addition to this there are also various phone based scams, where people from call centers all over the world will call in and try to collect personal information, or get users to install rogue software on their computers.

Who is at Risk?

As I mentioned earlier one of my close family members were hit by identity fraud – anyone can become a victim – however some groups of people are more vulnerable than others.

For example if you live in a flat with a communal entrance, you are actually twice as likely to have your personal information stolen.

Anything from moving house, to using an unencrypted WiFi connection in a coffee shop, can increase your risk.

The following infographic from Credit Expert shows some of the main groups of people that are most commonly affected by identity fraud.

Identity Fraud infographic

What to do if you have been affected?

You can find some useful information on what to do next on the Action Fraud website, which is the UK’s national fraud and internet reporting centre.

Visit website: www.actionfraud.police.uk

The next step you may want to consider is to inform a credit reference agency, for example Experian.

What are some of the things a credit reference agency can do to help set things straight?

Some of the steps that could be taken include:

  • Adding security features to obstruct further fraud
  • Issue a Notice of Correction on the credit report – a note to explain to potential lenders you have been the victim of crime
  • Register for the CIFAS Protective Registration Service

Source

You should also consider speaking to lenders to explain what has occurred, providing evidence as is possible/necessary.

How can I prevent identity theft?

As goes the old saying, prevention is very much better than the cure.

Here are just a few tips on how to prevent identity theft. Always be sure to visit more specialised resources (such as Action Fraud and CIFAS as listed above), the following tips are just a small selection, and there are many precautions you need to take to stay safe.

  • Shred any sensitive financial documents that you no longer need – don’t just throw the straight in the bin
  • If you move house, redirect your mail to your new address (more info)
  • Report incidents straight away
  • Register to vote at your current address

Staying safe online and internet security

As with identity theft, there are lots of useful resources to help with staying safe online (this guide from Experian is very useful).

Some basic tips include:

  • Consider against using your personal details if you are on an un-trusted or insecure wireless connection
  • Never click on suspicious links in an email – go to the site directly from your browser
  • Don’t open attachments such as PDFs from unusual emails you receive
  • Avoid giving away unnecessary information on social media such as when you are going on holiday or your credit card/banking details
  • If you get an email supposedly from your bank or Paypal saying your account was closed or anything similar, call them on their phone number rather than clicking any links

One of the most useful tips is to use common sense! You wouldn’t shout your credit card details across a room full of strangers at the pub, so would you do the same thing on the internet (eg by sharing a picture of your credit card on Instagram)?

Stay safe, and we hope you have found our article useful.

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Master of the budgets. Provider of the tips. Author and owner of Dumbfunded.co.uk.