Preventing identity fraud

Identity fraud is one of the fastest growing crimes in the UK. According to Home Office statistics an estimated 100,000 people are affected by the offence every year, leading to annual losses of more than £1.7 billion. A series of high-profile data breaches have fuelled concerns over the scale of the threat, bringing the issue firmly into the public domain.

What is identity fraud?

Identity fraud, also known as identity theft, occurs when a person's personal information is used by someone else without their knowledge to fraudulently obtain credit, goods or other benefits and services. With just a few personal details, fraudsters may make purchases in your name and even gain access to your bank accounts and remove funds.

How can your identity be stolen?

There are several methods a fraudster may use to appropriate someone's identity. These can range from crude tactics such as bin raiding to more complex methods which exploit the latest technical innovations. Some of the most common techniques are listed below:

Internet sites - With the growth of online shopping, we are regularly asked to share personal information to gain access to websites and purchase goods. However, confidential information shared on unsecured internet sites, such as your mother's maiden name, may be accessed by a fraudster. Details can then be combined with other personal details, which are often readily accessible through social networking sites, to steal your identity.

Phishing - The term used to refer to identify theft via email. Fraudsters will attempt to acquire sensitive information such as usernames, passwords and credit card details, by masquerading as a trustworthy source in an electronic communication.

Theft of Wallet or Purse - The average purse or wallet contains bank cards, credit cards and valuable identity documents, including driving licences and membership cards.

Unsolicited Contact - Phone calls claiming to be from banks asking you to update your personal information should be treated with caution. Similarly, fraudsters posing as market researchers may ask for personal information over the phone.

Bin raiding - Even in today's more vigilant society, a surprising number of people throw away documentation that is of considerable value to fraudsters. As a result, criminals will often rifle through household rubbish looking for bank and credit card statements, and even old utility bills and envelopes, in an attempt to steal your identity.

Card skimming - When making a purchase, a fraudster may covertly 'skim' or copy your card details in order to extract money from your account.

Corporate Identity Theft - By accessing publicly available company records, criminals may impersonate a firm and obtain goods and services on credit from suppliers.

Impersonation of the Deceased - Unscrupulous fraudsters may operate under the identity of a deceased individual, using information gleaned from public records, such as date of birth and address, to carry out criminal activities.

Protecting your identity

By managing your personal information carefully and remaining alert to the potential warning signs, you can substantially reduce the likelihood of becoming a victim of identity fraud. Consider the following tips:

Study your bank statements

Always read your bank and credit card statements carefully and query any items you do not recognise. Study all of your transactions, no matter how small, as fraudsters often begin by withdrawing limited amounts to check your account is live.

If you receive unexpected bills or statements that are addressed to you, but you know they don't belong to you, contact the company immediately and inform them there may be a problem. Likewise, if you receive a telephone call or letter saying you have been approved or denied credit for accounts you are unaware of, this may indicate suspect activity.

Shared documents that contain personal details

Avoid becoming a victim of bin raiding, by shredding all documentation containing your name or other personal details, including junk mail and envelopes, so they cannot be retrieved by a fraudster. Consider investing in a cross-paper shredder and store all important documents and financial records in a lockable unit or domestic safe.

Always inform institutions of any change in address

Avoid sensitive information falling into the wrong hands by instructing the relevant organisations of your change of address when you move house. Inform your bank, utility providers and store card companies of your new address and make a note of the anticipated arrival date of your bank statements to check that your mail is not being stolen. The Royal Mail can arrange for your post to be redirected to your new address for either one, three, six or twelve months. It is also recommended that you make arrangements for your post whilst you are on holiday.

Protect yourself online

Prevent fraudsters from acquiring personal information about you by ensuring that your computer is installed with software that provides a firewall. This creates a barrier between the internet and your computer. As the internet is a public network, without a firewall any connected computer to it can find and link to any other connected computer, putting you at risk of identity fraud. You should also use anti-virus and anti-spyware programmes to help secure your computer, and be sure to update them regularly.

When making purchases online do not disclose bank or credit card details before checking the site is secure. A padlock symbol should be displayed on the site and the address should begin https:// as opposed to http://. These signs indicate that the site encrypts financial details when they are transmitted, so the information cannot be captured by third parties.

It is good practice to keep a record of transactions that you make online as this will allow you to compare them against your bank statements.

Request a copy of your credit file on a regular basis

Check your credit file regularly, or subscribe to a service that does this on your behalf, may help detect fraudulent activity carried out in your name. A copy of your credit report can be obtained from one of the UK's credit reference agencies.

And finally, remember to keep your personal identification number (PIN) and passwords secure!

It may sound obvious, but do not disclose your PIN to anyone else - you'd be surprised how many people do! Refrain from writing it down and destroy any documentation containing details of this confidential code. Your bank will never ask you for your PIN, nor will it ask for your full password. Whilst you may change your PIN to something more memorable, avoid using the same PIN for more than one account.

If you fall victim to fraud

Following all of the above recommendations can dramatically reduce the risk of identity fraud. However, it is always important to be prepared in the event that you are targeted by fraudsters. If you think you have been a victim of identity fraud, contact your bank or the financial organisation concerned as soon as possible to help limit the extent of the fraud, and ensure that you keep a record of all communication. Notify all other creditors with whom you have an account, even if they haven't been affected, to ensure that they are aware of the increased risk. You should also consider subscribing to the CIFAS Protective Registration service. A notice will then be placed on your credit file indicating that your name and address may be used to perpetrate identity fraud. Follow the link: www.cifas.org.uk/pr

Under the Banking Code you should not suffer any financial loss because your bank or building society will reimburse any money taken from your account.

How we can help

Our experienced team are able to offer advice to help minimise the risk of fraud, protecting both you and your business. Please contact us for further advice and assistance.

For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.

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