Credit reports - credit fraud

Identity fraud is a growing threat to all of us, and can begin with something as simple as an unshredded letter in a bin. Unscrupulous individuals first steal documents such as credit card statements or official papers like passports, and then use them to obtain money or goods in the stolen name. This is often in the form of credit agreements those responsible have no intention of paying back.

Government statistics suggest that identity fraud has affected a frightening six million Britons, and costs the economy £1.7 billion per year. On average victims suffer potential losses of up to £2000 on a credit card, to £7000 on a current account. However, the disruption the entire experience causes can’t be quantified.

Figures also suggest that this fraud can go on for over a year before it’s discovered, an average of 539 days, meaning that immeasurable damage is being done to your credit history whilst you may be blissfully unaware. Once the crime is discovered, it can take up to 300 hours of work to rectify the problem, during which time it can be impossible to obtain credit because of the criminal’s activity and its devastating effect on your credit report.

The theft itself

Whilst the victims of many other crimes are likely to know the perpetrator, 97% of ID fraud victims find themselves targeted by complete strangers. By committing the slightly distasteful act of rummaging through your rubbish, fraudsters search for documents such as bank statements, credit card bills, or even personal documents like passports and birth certificates.

Postal services can also be used by thieves to get hold of the information necessary for ID fraud. By either intercepting post or placing a postal redirect on an address, a criminal can eventually secure sufficient details to begin defrauding. Another variation on this is jackal fraud (named after the false identities used in Frederick Forsythe’s The Day of the Jackal), which involves a fraudster using a birth certificate to impersonate someone who is in actual fact dead.

Vulnerable groups

London has been named as one of the most at-risk areas for identity fraud: all of the areas classified as being at high risk are within the bounds of the M25. Those with a London postcode are a staggering four times as likely to fall victim to ID theft as those elsewhere in the UK.

Also at risk are those in privately rented accommodation, or those who live in premium city locations. Young single people and young families are also classified as at risk.

The frightening numbers

Research conducted recently revealed that 97% of households have thrown away documents containing vital details of their full name, address and gender, which may sound like innocuous details but are vital building blocks to a fraudster. A further 30% have thrown away entire account statements, and 46% have thrown away documents containing their bank account number and sort code. But most alarmingly, a careless 48% of us have thrown away enough details for their identity to be stolen outright.

Detecting and avoiding ID fraud

Once a fraudulent application for credit has been made in your name, you may find clues that something untoward is happening, such as receiving letters from unfamiliar lenders or noticing unexpected activity on your credit report. It’s important to investigate these things immediately to limit the damage a fraudster can do.

The quickest and easiest way to be watchful for ID fraud, is to regularly check your credit report. It’s your personal record of all credit accounts you have had, and is therefore a highly visible place in which fraudulent activity can be detected.

Moving home is upheaval enough in itself, but it also makes us vulnerable to this type of fraud. Almost a quarter of home-movers do not redirect their post, and therefore put themselves at a much higher risk of identity theft. A further 10% admit to accidentally leaving personal documents behind , and 70% of new residents receive post that would make stealing an identity possible. It seems that we need to wise up as we pack up.

When you’re moving, or even just spring-cleaning, it’s vital that documents containing valuable personal information are disposed of properly. Anything you’re not keeping, shred (using a home shredder, which are widely available) or burn. If you’re letting your property be sure not to leave any important document on-site. It may be cynical, but the best person to rely on for the security of your documents is you.

Finally, if you suspect your mail is being tampered with, contact the Post Office to request they investigate. If your mail is delivered to a shared area such as a communal lobby, collect it promptly.

Putting a stop to it

If you suspect that you may have been the victim if identity fraud, contact the police right away, telling them you believe your name and details have been used fraudulently. They should give you a crime number, by which you can track the ensuing investigation.

Experian also have a specialist Victims of Fraud service, which can help you to iron out the details of your problem, use your credit report to prevent the fraudster stealing anything further, and limit the inconvenience the crime causes.

The more rapid the reaction, the easier the crime is to limit and stop. Report lost bank stationery and documents to the organisations who issued them, and to the police, cancelling all cards, cheque books or passbooks and replacing them. Contact any lender who has received a bogus application from you to set the record straight, and most importantly, keep records of all this correspondence.

The old adage “prevention is better than cure” is certainly applicable in this case. When you notice fraudulent activity, much of the damage may well already have been done. The sooner you take steps to protect yourself, the safer your credit history becomes.

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