Identity Fraud

Telltale signs you may be a victim of identity fraud

Identity fraud, how can you prevent it, and the best practice for treating it when the worst has happened

Money missing from your accounts? Mobile phone going dead? Unexpected refusal of credit cards or loans? Bills for purchases you don’t remember making? You may be a victim of identity fraud. Yikes is right – it’s about as bad as it sounds. It is even worse than plain old financial fraud, and here’s why.

Financial fraud, sometimes called checkout, or transaction fraud, usually has much more limited scope than identify fraud. It is, more often than not, an attack against a single account, such as a bank account, debit, or credit card. Once detected, such fraud can often be mitigated by simply issuing the consumer a new account number or card. No further impact or risk of loss would be expected once the account numbers have been re-issued.

In contrast, identity fraud has wide reaching implications for the victim. In this case, a criminal is effectively impersonating a legitimate consumer by using their name, address, and other personal information such as social security numbers, spouse or parental information, employment records, etc., to establish new financial and credit accounts, or to take over existing accounts. What makes this type of fraud so powerful (and so disastrous for the victim), is that the information being used to commit fraud often cannot be changed or protected by the consumer – it’s given at birth and is used in nearly every real-world financial interaction we have with other parties. Once detected, battling identify fraud can become a lifelong struggle, with few good options for a victim to recover their reputation and credit.

When it comes to protecting yourself from identity fraud, remember to always trust your instincts. Here are three tips for heading off identity fraud early:

  • Creditors don’t generally make mistakes that involve granting new and unsolicited lines of credit to random consumers, or sending bills and collection notices for an unknown credit account to the wrong person. If you receive an unexpected call, letter, bill or if a new credit offer is received, don’t just assume it’s an error – spend a few minutes and investigate it. It’s quite likely that someone has used your identity information to open credit in your name, and has gone on a shopping spree.

  • Don’t wait to receive an unexpected denial when applying for a new credit – always keep tabs on your credit report, and report any inaccurate or questionable information as soon as it’s identified. Depending on where you reside, you may be entitled to a free or reduced price copy of your credit report periodically. UK residents are entitled to a copy of their Statutory Credit Report for as little as 2 pounds, through services such as Experian, Call Credit, Clear Score, Noodle and Equifax.

  • Missing mail? It’s quite common for an identity fraudster to redirect the mailing of statements and other materials such as new cards. This is done in order to acquire new physical cards, as well as keep the legitimate consumer from uncovering the fraud until damage has well and truly been done. If you notice that you haven’t seen one or more statements from any of your creditors, give them a call as soon as possible to inquire.

    Crucial steps to take if you have been a victim of identity fraud

    If you experience financial fraud, with a limited number of unidentified transactions appearing on existing accounts, contact that creditor immediately. Often these issues can be remedied by changing your cards and/or account numbers.

    If you find unidentified or inaccurate entries on your credit report, contact the credit bureaus reporting such information, immediately. By law, your statutory rights include the right to dispute inaccurate information in your credit file, and have such errors corrected within 28 days.

    In either case, contact your local police force to inquire about filing a report on the fraudulent accounts and transactions.

    How to take action to prevent identity fraud

    Be wary of any communication that you receive that asks for personal information, whether that be an email, a phone call, SMS, or letter via post. If there is any doubt about the legitimacy of a request for information, stop the communication and call the agency back using a well known and publicly published phone number. Legitimate companies will post their telephone number on their website, include it on normal correspondence such as bills and account statements, and on the back of credit and debit cards.

    Make sure you shred or otherwise dispose of in a secure manner, all important but no longer needed documents, such as account statements, checks, and plastic payment cards (debit or credit).

    Immediately report the loss of identity documents such as ID Cards, Passports, as well as financial instruments such as checks, and payment (credit and debit) cards, to the appropriate entity.

    Maintain credit monitoring services, that will alert you to new attempts to access your credit file, or new credit accounts opened in your name.

    Protect your home PC and mobile device. Make sure you keep it up to date with the latest software updates, and security software. Protect your online accounts. Always set strong passwords, and never reuse the same password on more than one site.

    And there you have it. With this knowledge and these tips, you will be better equipped to brave the online banking and ecommerce world. You can never be too careful when it comes to your identity.

    Want to read more posts like this? See our full blog here.