Money
Managing your money
Protect your identity
Is someone being you? The first you may know about it is when you get a bill or an account for something you have not bought or arranged. The Government says identity theft is the UK's fasting-growing crime. And it costs the banks £1.7 billion a year
Identity thieves work by finding out enough about you to persuade a shop or a bank that they are you. Then they take out a credit card, rent a mobile, borrow money or buy things on credit. Eventually you will get the bill – or even a visit from a bailiff. ID theft and the crimes that follow it are alarming and can be very time-consuming to put right. So it is important to take all the steps you can to prevent it happening.
Prevention
One reason for the growth in ID theft is recycling. Every week we leave paper on the street overnight in a special box or bag. To an ID thief that is gold dust. To establish identity you are often asked for a utility bill, a letter from the bank, or an official document. If you throw them away someone else can use them to prove they are you. So step one is to buy a shredder. Put the paper 'confetti' in a bag and the recyclers will still take it.
Shred every document bearing your name and address. That includes circulars, notices and advertising brochures as well as any letters and statements from a bank or the council. If in doubt, shred it. You can stop junk mail arriving by registering with the Mailing Preference Service. You can also stop telephone sales calls through the Telephone Preference Service. Both are free. Details below.
Not only documents are used to steal identity. Thieves may phone you pretending to be from the bank or the water company to trick you into giving them your date of birth, account numbers or passwords. If someone calls you asking for such information never give it. Ask where they are calling from, find the number for that organisation and call it yourself. Only then can you safely give any information.
If you use a credit or debit card protect your PIN. Never write it down. You can change your PIN at any cash machine to one you can remember – a combination of two birthdates, a birth year of a relative mixed up (so it doesn’t start or end with '19'), or perhaps four digits from old house numbers. It is sensible to have a different PIN for each card. When you enter it, always shield it from sight with your other hand or something you are holding. Never let your card out of your sight. If a machine is not brought to you, go to the till to pay in person.
A technique growing in popularity among ID thieves is getting mail redirected. They use information already obtained to pretend to be you and then change your address with your bank or credit card provider. They might even tell the Post Office to redirect all your mail to an address they have access to.
If post fails to arrive – especially a bank or credit card statement – find out why. If you want to check if your mail is being redirected, contact Royal Mail. If you change your address, make sure everyone knows and get all your mail forwarded to your new address for at least six months. That will cost you £24.90.
If you use your card to buy things online, check that the web page you put your details into has an address which begins 'https' - not 'http' - and that there is a padlock at the top or bottom of the page. That shows it is a secure connection.
Credit record
If someone does take out a card, a loan, a bank account or a mobile phone contract in your name it will be noted on your credit record – the computer file which lists every credit deal you have and how well you keep up payments. The files are kept by three credit reference agencies and you are entitled to see your record from each for a fee of £2. All three agencies try to sell you access to your records at a higher price and the £2 offer can be hard to find.
One useful service is an alert by email or text message if any new credit is taken out in your name. If you didn't arrange it then you know your record has been compromised and you can check what has happened. It costs a few pounds a month but is free if you take out a credit card with Capital One.
If it happens
Although stealing money through ID theft is a crime there is no point in reporting it to the police. Since 2007 the first place you have to go to report identity fraud involving credit or debit cards, online banking or cheques is your bank or credit card company. It will decide whether to inform the police. That applies to England, Wales and Northern Ireland. In Scotland you can still go direct to the police but you should also contact your bank or credit card provider to let them know.
If your ID is stolen to commit a crime, the bank or card provider will bear the loss if you have been careful with your card and PIN.
In theory. But banks and credit card providers can be very suspicious about claims of ID theft and it can take more than a year to sort out what has happened and get money refunded. Experian, one of the three credit reference agencies, has a Victims of Fraud service which will help you free. You will also get free access to Experian’s credit-monitoring service CreditExpert.
If there are delays in sorting out your theft, complain to the financial company. If that does not get the problem resolved quickly, complain to the free Financial Ombudsman Service, which can award compensation. But it can also take a while. If you fear that your identity may have been stolen you can register your address with a firm called CIFAS. If there is any application for credit at that address you will be contacted to check.
That means that any application for credit or a bank account you make will also be delayed. CIFAS registration costs £14.10 a year.
Some banks and credit card providers try to sell you ID theft insurance. If money is lost due to ID theft the bank or credit card provider bears the cost, so this insurance covers legal fees which are generally unnecessary and some of the other ID services which you can get free anyway. So read the small print and think hard about paying for insurance against it.
Further information
Get your credit report
www.experian.co.uk, 0844 481 8000 identityfraud@uk.experian.com
www.callcredit.co.uk, 0113 244 1555;
www.equifax.co.uk, 0870 010 0583
Protect your address from fraud
www.cifas.org.uk, 0870 010 2091
Complain about a financial services company
www.financial-ombudsman.org.uk, 020 7964 0500
Stop junk mail and cold calls
www.mpsonline.org.uk, 020 7291 3310
www.tpsonline.org.uk, 020 7291 3320
Redirected mail
www.royalmail.com, 0845 7740 740
* Written by Paul Lewis. Paul's opinions are his own and for general information only. Always seek independent financial advice.
* This article first appeared in the August 2008 edition of Saga Magazine.
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