The fraudsters after your identity
By
Simon Wilson Nov 30, 2005
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Identity theft and fraud is on the rise, costing the UK economy £1.3bn a year. Are you at risk? Simon Wilson reports.
What is identity fraud?
Fraud committed by a criminal who has stolen someone else’s identity. By stealing documents such as your passport, driving licence or bank statements - or online ID, such as usernames, passwords and personal security questions - thieves can now take cash from your accounts, commit benefit fraud, or take out new credit cards or loans, all in your name. Online frauds that sucker victims into revealing crucial private data, known as ‘phishing’ scams, are becoming more common. But for most people, the greater danger still lies in more old-fashioned methods: burglars who steal documents and chequebooks; fraudsters who intercept your post; and even thieves who dredge through bin bags.
How big is the problem?
In the UK, more than 70,000 people were victims last year, according to figures from the Credit Industry Fraud Avoidance Service (CIFAS). Given the large number of cases, the sums involved are hardly huge - the Association for Payment Clearing Services puts the total taken by identity fraudsters last year at £37m, but this is a 66% jump on the previous year. However, they calculate the overall cost to the economy - including the time and money spent by banks in combatting the crime - is a massive £1.3bn.
Will it get worse?
According to the police, yes. Detective Superintendant Ken Farrow of the City of London Fraud Squad points out that burglars are already breaking into homes specifically to steal passports and bank details. “There’s little market for second-hand DVD players and televisions these days,” he says. “Thieves can do so much better with personal details, so we fear this is just the beginning of a major new problem.” Moreover, the switch to chip-and-pin technology for authorising credit and debit-card payments - meant to stop thieves from using stolen or counterfeit cards - is causing an increase in identity fraud, as criminals turn to IDtheft instead.
Am I at risk?
Almost certainly. Neil Munroe of credit agency Equifax says that you are vulnerable to ID theft if you lose your purse or wallet; if you keep your cards with other ID; if you use the same PIN or passwords for different accounts; if you use internet banking or membership-based websites; if you bin receipts, statements and utility bills without shredding them; or even if you regularly eat out at restaurants. Under the British Banking Code, you are protected against financial losses due to illegal purchases and credit if your identity is stolen. But the time and distress involved can be enormous.
How can I avoid becoming a victim?
Caution is the key. Always read bank and credit-card statements carefully and check against receipts. If you have any worries, tell the bank concerned straightaway; scammers often test the water with a small transaction first before attempting a larger theft. Check your credit report often for any credit requests not made by you. Shred statements, bills and even direct mail; these all contain vital personal information. Register with the Mailing Preference Service (0845-703 4599, www.mpsonline.org.uk) to stop junk mail and get mail redirected when you move home. Leave all unnecessary credit cards and ID at home when you go out, but do not leave key documents together in one place easily accessible to a burglar. Use different PINs and passwords for different accounts, and never disclose your full PIN or password in an e-mail or over the phone, even if you think you are talking to a bank employee.
I think I may a be a victim - what do I do?
Report the suspected crime to the police and ask for a crime reference number, which you will need to recover any losses. Also, spend £11.75 on the protective registration service offered by fraud prevention service CIFAS (0870-010 2091, www.cifas.org.uk). They will place a notice on your credit file warning banks and lenders that there’s an increased risk of identity fraud. Companies will then seek extra verification from anyone applying for credit in your name. Impersonation of the dead is the fastest-growing type of identity theft, so take this into account when dealing with a relative’s death and estate: immediately notify the relevant Government departments, such as the Department of Work and Pensions and the Inland Revenue, and return important documents by registered delivery.
Last week’s briefing mentioned the Aberdeen New India Investment Trust as a way to invest in India. The fund used to be focussed on Latin American equities and much internet information suggests it still holds some. We are assured by Aberdeen that these assets have now been sold and the fund is entirely invested in India.
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