How to protect yourself from ID fraud The problem

Identity fraud is one of the fastest-growing crimes in the UK and costs the country over a billion pounds every year.

A Which? survey in 2005 found that a quarter of UK adults have had their identity stolen or know somebody who's been a victim of ID fraud.

A number of studies have also found that millions of British homes are throwing out confidential information in their rubbish which could allow fraudsters to steal their identity.

It’s also estimated that since 1999 incidents of identity fraud had increased by 500 per cent.

There are a number of ways criminals can steal your identity. These include:

Account takeover

Criminals gather information about a person. One way fraudsters have done this is to raid rubbish bins in search of documents thrown out by householders.

The fraud prevention service Cifas said that one North London authority discovered that homeless people were being paid upwards of £5 by fraudsters for each document they found in the rubbish. 

Once these ID criminals have enough information, they then call that person’s credit provider and change the home address details. They can then order new cards.

Phishing

Criminals send emails that appear to come from your bank to get you to enter passwords and account details on a fake version of your bank’s website. 

The number of these ‘phishing’ emails being sent out has increased dramatically in the last couple of years.

Application fraud

Documents are faked or stolen in order to open an account in someone else's name.

One version of this is ‘Current Address Fraud’. This occurs when the victim lives at the same address as the ‘current address’ given on the fraudulent application. 

The fraudster will have access to, or can intercept, the victim's post such as in flats with communal letter boxes or at student residence halls.

Another version is ‘Previous Address Fraud’.

The fraudster steals another person's identity and falsely claims that the victim has recently changed address. 

Because of the short time at the fake 'new' address, any credit reference agency checks are performed against the 'previous' address - where the victim still lives. The fraudster can then apply for new cards and accounts in the name of the victim.

Pharming

This relies on a computer virus that redirects you to a fake website when you attempt to access your online bank account.

What to do if you're a victim

If someone has used your identity to open an account or buy goods, immediately contact the company with which the fraudsters have taken out credit.

Once you have reported the problem to the credit lenders, an automatic 'victim of impersonation' marker will be added to your credit file. You won't be charged, but it will mean that any new credit you apply for won't be approved immediately.

At the same time, contact your local police station and get a crime reference number. Don't ignore the problem. It can affect your credit record and you may have difficulty obtaining credit in the future.