10 ways to protect your ID
Falling victim to identity fraud is traumatic. The consequences of a criminal taking out a personal loan or credit card in your name, or emptying your current account, can be not only extremely stressful but also time-consuming to unravel.
The crime is estimated to cost the economy around £1.2 billion a year, and the recession sparked a sharp rise in the number of cases being reported. The number of victims in the first three months of this year soared by 40% compared with the same period last year, says fraud prevention service CIFAS.
Identity thieves usually work by accessing details such as your name, address and bank account number to take out credit, with victims finding they are then refused banking services or mortgages. Often, it’s only when you are refused credit that you discover your identity has been stolen.
Now, fraudsters are increasingly using ‘takeover fraud’ where they secretly hijack and plunder their victim’s bank account.
But there are some simple low-cost steps that everyone can take to dramatically reduce the risk of identity fraud – spend a small amount of time now and you can save months of trying to reclaim your own name.
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1. Using your card
Always cover the keypad with your hand when you use a cashpoint to enter your PIN, and be wary of who might be trying to spy over your shoulder – don’t be distracted by anyone or anything.
To avoid card fraud of all types, the Association for Payment Clearing Services (APACS) recommends never letting your card out of your sight when making a transaction, and discarding your receipts from card transactions.
“These days your card shouldn’t be taken away when paying in a restaurant or a bar – and you should also avoid putting your card behind the bar to keep a tab, as you leave yourself vulnerable to fraud,” says Michelle Whiteman, spokesperson for APACS.
There are two different sets of rules governing refunds from fraud. The first, the Consumer Credit Act, which covers the theft of ‘credit’, states that the cardholder is only liable for the first £50 of any unauthorised spend. The Banking Code, on the other hand, would cover you for any theft of money from a bank account – but you may be liable for your loss if you have been negligent with your PIN or personal information.
2. If your wallet goes missing
The first priority when you find your wallet or purse is missing is to cancel your debit and credit cards in order to prevent a criminal stealing money from your account. To minimise this risk, never carry around more cards than you need.
“You could also sign up to CIFAS’s protective registration service to give you peace of mind,” says Whiteman. This is subject to a small charge and ensures that extra checks are carried out if anyone applies for credit using your name.
3. Dealing with paperwork
Criminal gangs have been known to employ homeless people to search through rubbish bins for financial records and identity documents. So never throw out statements or junk-mail loan and credit card applications without ripping them up or, even better, shredding them. Carelessly discarding personal details is the easiest way to become a victim of identity theft.
Electric shredders can be purchased for as little as £10 from retailers such as Argos and take the hassle out of destroying documents effectively.
Destroying evidence should also extend to direct mailings or any documentation that contains your name and address, including utility bills.
4. Check bank and credit card statements
Every time you receive a statement, scan it for any suspicious transactions before storing it in a secure place. This should be done immediately, and once you’re in the habit, will only take a few seconds. If you notice any discrepancies, notify your bank immediately so that it can deal with the issue.
5. Check your credit report regularly
Regularly checking your credit file is another way to spot fraud early. Major credit reference agencies Experian, Equifax and Callcredit allow consumers to download a copy of their file online for around £2.
They also offer credit checking services, which for £3 to £6 a month will alert you when someone applies for credit in your name.
6. Redirecting your post
Many people’s bills and letters go astray when they move home, making them a prime target for fraudsters. So always ensure all mail is redirected to you when you move home by using Royal Mail’s redirection service – ideally for a year – to cut down the chance of post being intercepted.
If you suspect your mail is being stolen, contact the Royal Mail customer enquiry line (0845 774 0740) to check whether a mail redirection order has been made in your name without your knowledge.
To minimise the chances of someone intercepting an application form and taking out credit in your name, register for free with the Mail Preference Service, which will put a stop to most of the junk mail you receive.
7. Computer safety
Windows PCs are vulnerable to viruses that can be easily picked up from rogue websites and emails. Some can ‘harvest’ your information and send it to fraudsters all over the world – so keeping your anti-virus system up-to-date is vital to protect your computer from hackers, viruses and malicious software.
In addition, check you are using a good firewall to control the programs that can access the web or be installed on your machine. A number of good solutions are available to download for free on the internet, including AVG or Avast!. These should regularly run scanning programs for spyware.
Also, check that your wireless internet connection is password-protected to ensure only authorised computers are able to log onto your network. Never keep passwords stored on your computer.
If you are accessing banking details from a computer that is used by other people – for example, when you are at work – make sure not to click on the ‘save password’ option or another user could access your account.
8. Social networking
Social networking sites such as Facebook are a fantastic tool for fraudsters, giving them access to the date of birth, previous education, employment and family details of many users at the click of a mouse. Some members place everything from mobile telephone numbers to curriculum vitae online.
If you’re setting up or updating a Facebook page, adjust privacy settings to allow only your ‘friends’ to view personal details. But if you join networks – such as the London group, which has two million members – be aware that everyone in the group will be able to view your profile unless you customise the settings.
A spokesperson for Sophos, an internet security firm, says: “As networks can contain hundreds of thousands of people – and you have no control over who else joins the network – you are revealing personal information to potential identity thieves if you leave this option at its default setting.”
9. PINs and passwords
Managing an array of PINs and passwords to access bank and savings accounts can be a struggle. Yet with the average Briton having four cards in their wallet, according to APACS, alongside a variety of other accounts requiring security information, this is a necessity.
However, it’s never a wise idea to choose ‘guessable’ PINs or passwords because they are easy to remember, such as your date of birth, favourite football teams, or childrens’ names. Ideally, your PIN should be an entirely random number that has nothing to connect itself to you.
Turning to passwords, make sure to choose one of a decent length, say 10 to sixteen characters, consisting of letters and numbers. The problem is, however, that a password packed with letters, numbers and symbols can be impossible to memorise.
One popular trick is to create a mnemonic device to trigger a password or PIN. Start with a memorable phrase made up of several words – for example, ‘Too many cooks spoil the broth’, which can become ‘TMCSTB’. This is relatively easy to remember, but hard to guess.
The same method could be used for PINs, by converting the letters to numbers.
10. Going abroad
If you’re going travelling or planning a long holiday, limit yourself to a few necessary credit cards and documents, and never leave personal documents unsecured in hotel rooms.
“Tell your bank before you go that you will be away, and make sure you have internet or telephone banking set up so that you can check your account regularly for any unfamiliar transactions while you are away,” says a spokesperson for Which?. “And keep your banks’ emergency numbers to hand, so you can contact them if your cards are stolen.”
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.
A report containing detailed information on a person’s credit history, a record of an individual’s (or company’s) past borrowing and repaying, including information about late payments and bankruptcy. It also includes all applications a person has made for financial products and whether they were rejected or accepted. Your credit report can be obtained by prospective lenders to determine your creditworthiness.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.