Identity Theft and Credit Fraud: How Identity Theft Strikes
Identity theft: What is it?
Identity theft occurs when an individual has their personal information stolen and the thief uses this information for financial gain and credit fraud.
What sorts of things does the identity thief do?
Examples of identity theft include accessing your bank accounts and credit cards, obtaining new credit cards and taking out loans in your name, obtaining identity documents (such as a driver's license) in your name, and committing crimes in your name.
How does credit fraud and identity theft happen?
Just take a moment to think about how easy it can be for someone to gain all of the information he needs to commit these identity theft and credit fraud crimes. Lots of personal information can be gleaned by going through your rubbish or post (where you may have tossed an old bank or credit card statement, for example), stealing from lost or stolen purses and wallets, or even through Internet and telephone scams.
The worst part of identity theft and credit fraud is that it can happen without you even knowing about it, meaning that identity theft often goes unnoticed by victims until months have gone by and thousands of pounds in damages have been done.
What are the repercussions of identity theft and credit fraud?
The thief may open a new credit card in your name, then use the cards and not pay the bills, resulting in the debt and missed payments showing on your
credit file. He could also take out a loan and buy a car in your name, or write bad cheques on a bank account opened in your name. He may pose as you and get your mail redirected so that you don't realize there are problems until it is too late. All of this identity theft and credit fraud can cost you thousands and the long term impact on your
credit report can be devastating if, for example, you are denied approval for a mortgage because of your poor
credit rating.
How do you fight back?
Unfortunately, nowadays identity theft and credit fraud are becoming bigger and bigger problems. It is impossible to completely prevent it from happening to you, but you can take steps to greatly reduce the chances that it will.
What can you do to fight back? First, it's important to learn about how credit fraud and identity theft can happen to you, then take the time to regularly monitor your
credit report for unauthorized account use.
Protect yourself by taking these additional steps:
Keep close watch of your personal data. Never give out personal information on the phone, by mail, or the internet if you do not fully understand why it is being requested. Keep close watch of personal information in your home, too, especially if you have a flat mate, bring in outside help, or have service work done in your home.
Change passwords and PINs to something other than your mother's maiden name, your birth date or phone number; choose something that will be harder for a thief to obtain. Memorize your passwords or PINs instead of carrying them with you to help prevent identity theft.
Protect your post. Shred all of your financial documents before you throw them into the rubbish or recycle bin to prevent credit fraud. This includes receipts, bank statements, credit offers and applications - anything that has personal information on it that can be stolen.
Deposit outgoing post elsewhere - at your local post office or in post office collection boxes, and keep your postbox cleaned out daily. If you are going away, contact the Royal Mail about their Keepsafe service to avoid credit fraud.
Carry only the cards you use. Leave official documents like your passport and birth certificate at home or in a secure spot, like a safety deposit box. If you lose a card, contact the card company immediately to prevent identity theft.
Watch for unusual behaviour. When you give a cashier your card for a purchase, watch him/her carefully to ensure that there is no credit fraud going on (such as double-swiping your card).
Monitor new cards. If you apply for a new credit card and it doesn't arrive in a reasonable period, contact the issuer. When you receive a new card, sign it in permanent ink and activate it immediately to prevent identity theft.
Monitor your billing cycles. If you don't get a credit card statement on time, call the creditor immediately in case your address has been changed by a thief.
Verify exactly who at your work has access to your personal information. Ask where and how the records are kept secure and confirm that they are only accessible to those who have a legitimate reason to avoid identity theft and credit fraud.
Watch your
credit report closely. This is the best way to protect yourself against surprises. If you do not frequently check your
credit report, you may not even be aware that you have been a victim of identity theft and credit fraud. When you check your report, ensure that all details are accurate and that nothing looks unusual.
What about credit card protection policies?
Many credit card companies offer so-called "zero responsibility," meaning that consumers responsibility is limited to £50 in most cases of credit fraud. This does not mean that you shouldn't have to worry about credit fraud, though, since identity theft can do such widespread damage that goes far beyond your credit cards.
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