The real risks of identity theft
The internet can help criminals steal and abuse the identities of their victims but it’s not a necessary ingredient. It is possible for someone to steal your identity even if you are extremely careful with how you share your personal details online. Ultimately, identity theft is simply when a criminal has gathered enough information about you to commit fraud in your name. You don’t even have to be alive to be a victim, although obviously you’ll care more if you are!
Most identity fraud occurs online, according to fraud prevention service Cifas, which claims that 80 per cent of cases are internet-based. According to the Office for National Statistics, most fraud, by far, involves offenses relating to cheques, plastic card and bank accounts. It reports that this is most likely because there has been “an increase in the volume of reported identity frauds in account applications (for example, applying to open a plastic card account using a false identity).”
To put things in perspective, according to the official figures for England and Wales, you are nearly as likely to be burgled and it is more likely that someone will steal your car instead of your identity. Identity theft is a more subtle crime, though, so you need to be alert to the signs and act fast if you believe that someone has stolen your identity.
How does ID theft work?
With these explanations and caveats in place, let’s see how identity theft actually works.
An identity thief usually aims to obtain enough personal information about his victim to convince a bank to open an account in the victim’s name and hand control of that account over to the criminal. In itself this doesn’t seem like a problem for the victim but it’s the first step in a sequence of criminal activities that will, at some stage, involve the victim directly.
In one recent example a businessman lost his passport (or had it stolen) and a criminal used it to set up bank accounts in Germany. These were used to defraud the German tax office by failing to pay VAT due on transactions carried out by the criminal. The German government then pursued the victim for £130,000, assuming that he had received the payments into the accounts and owed the resulting tax. He also had to pay solicitors £34,000 to fight a separate court order relating to other, possibly related, criminal activities. If he’d ignored this order his house would have been at risk.
The problem is that although the victim is not responsible for fraud, it can take effort and sometimes considerable expense to convince the appropriate authorities that it wasn’t really you who was involved in money laundering, buying expensive goods online, signing up to expensive mobile phone contracts or claiming state benefits.
How do you know that your ID’s been stolen?
If a bailiff turns up at your door and you genuinely have no idea why, that could be an unpleasant first sign that someone has used your identity to commit a crime such as signing Hire Purchase agreements or other types of loan in your name. The same goes for phone calls from collection agencies. You might even receive credit or debit cards in your name that you did not apply for. This is a sign that someone is abusing your identity. It will be obvious when these things happen but there are other clues that require some vigilance. For example, check your bank and credit card bills to detect any items listed that you do not expect to see.
You may discover that you can no longer sign in to some of your regular sites because your password no longer works. You’ll only notice that when you try (and fail) to log in. If you lose access to your PayPal or email account then things have taken a very serious turn.
You might even check your credit history. Experian provides a way to receive a free credit report and score. If you’ve been refused credit you might want to check your history to find out why. If you see outstanding loans that you know nothing about you can be confident that someone has stolen your identity.
Basic steps for protection
Closely guard valuable documents like your passport and driving license. Bank statements and even utility bills are used to verify identities when setting up new bank accounts so treat these as being highly sensitive documents and consider investing in a document shredder and lockable filing cabinet. Keep what you need safe and destroy the rest thoroughly.
Email is the digital equivalent of a postcard – anyone (or any computer) involved in handling it, from sender to receiver, can read it by default. If you must send sensitive data by email consider encrypting files in a password-protected Zip file or share secure links using services like Dropbox.
Use strong, unique passwords on all websites on which you have an account. Some trust in password management applications, while others prefer un-hackable ‘paper and pen’ to record important passwords. If you choose this route you will definitely need a safe place to store your password notepad.
ID protection software, such as BullGuard Identity Theft Protection can monitor the internet for your personal details, warning you if they turn up for sale, so you can deal with the problem quickly before it’s too late.
Finally, if you believe that your identity has been stolen, don’t ignore the situation. Inform any organisation involved, such as your bank or the Passport Office, as soon as possible. Burying your head in the sand will increase the amount of inconvenience and potentially expense you experience as a victim of identity fraud. You want to address things before the bailiff knocks on your door.
Image by Raymond Gilford