Identity crisis: the new face of fraud

Sam Dunn sees how we can resist the 'phishers', 'skimmers' and bin raiders who steal our lives and then our money
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The Independent Online

Brazen theft of thousands of pounds from banks and credit card accounts is on the up, and this crime is being committed in your name.

Brazen theft of thousands of pounds from banks and credit card accounts is on the up, and this crime is being committed in your name.

We are oblivious to our "law breaking", of course; it's only when financial damage wrought in our name is uncovered that the truth dawns.

Identity theft and subsequent fraud - a crime that can destroy your credit rating, leave you out of pocket for months and disrupt your life - is growing at an alarming rate. Figures for 2004 from the Association for Payment Clearing Services (Apacs) will this week show a 20 per cent rise in card fraud - up to nearly £37m - resulting from identity theft. As many as one in 10 of us have now fallen victim, the consumer body Which? estimated last week.

The City of London fraud squad has found that more residential burglaries are now carried out with the sole purpose of stealing individuals' bank details or documents.

Identity fraud happens when thieves gather as many bits of information about you as possible - date of birth, proof of address, mother's maiden name, bank account number - and then fraudulently apply for credit cards, open bank accounts or manipulate and drain your existing accounts of cash. In other cases, your identity will be used to forge passports or national insurance numbers for use in serious international crime.

Diverse tricks come into play: "phishing", which dupes you into divulging bank details by email or telephone; spam email viruses, which access sensitive information on your computer; raiding bins for card receipts and discarded bills; intercepting mail, and "skimming" your plastic for credit or debit card details.

Everyone is vulnerable. A court last week heard how Ricky Gervais, star of the TV comedy The Office, had his bank account and passport details stolen in a bid to buy bullion.

Given all this, how much should we worry?

"It's not an epidemic but it could develop into one if we don't all do something about it," warns Neil Munroe, director of the Equifax credit reference agency and a member of the Credit Industry Fraud Avoidance System (Cifas).

The problem is exacerbated by the lack of a single body of authority to which victims can turn for help once a stolen identity comes to light.

"In the worst cases, the first that you know anything about it is when a bailiff turns up at the door," says Apacs spokeswoman Gemma Smith.

So it's left to you to deal with police, work with the aggrieved lender to prove your innocence and then contact the credit reference agencies to start the clean-up operation to restore your credit rating or get your money back. This will take time and prevent you, in the meantime, from being able to take out credit cards, apply for a mortgage or arrange a loan.

At the moment there are no plans to set up a dedicated national body, says Ms Smith, although the industry may be forced to consider it if the figures get much worse.

Ironically, chip and pin debit and credit cards are fuelling the problem as the new anti-fraud technology at the point-of-sale in shops has forced fraudsters to redouble their efforts elsewhere.

Although the victims' own financial losses will usually be reimbursed, identity fraud was estimated by the Government to have cost the UK some £1.3bn back in 2002; a figure that will have soared since then.

No specific regulation from the Financial Services Authority (FSA), the City watchdog, requires banks to adopt security measures such as identity checks for customers. However, since they end up footing the bill, many are working with industry bodies such as Apacs to crack down on the crime.

Privately, a number of banks are considering technology based on finger-printing, as well as plans to match your pin security number with a new password every time you make a financial transaction.

In the meantime, though, there are plenty of steps that individuals can take to protect their identity. Shred old bank statements, bills, loan applications and receipts before you discard them, and don't use obvious clues such as your mother's maiden name as a password.

If you change address, get the Royal Mail to redirect your post - it costs £6.55 for one month.

Regular checks on your credit file - the relevant agencies' web addresses are listed below - allow you to see any fraudulent applications. A postal request to an agency costs just £2.

For £11.75, consider the Cifas Protective Registration Service, which alerts you each time a card application is made in your name.

If you fall victim to identity fraud, you'll need a crime number from the police. Meanwhile, keep copies of all correspondence from lenders defrauded by crooks in your name; it will help as evidence of your innocence.


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