Identity Theft and Fraud Explained

Identity theft is a growing problem in the United Kingdom. The process of identity theft involves someone stealing personal information about an individual, which may include financial data, biographical details and passwords. Identity fraud is what happens when someone uses that information to commit fraudulent activity.

The reasons for the growth in identity theft and fraud are complex, but here we will look at some of the statistics behind the increase; how fraudsters use your data; why social media is a key element and how you can reduce the risk of becoming a victim.

The Statistics Behind Identity Theft

In a twelve-month period from 2015 to 2016 the Office of National Statistics recorded a staggering 2.47 million bank and credit account frauds in the UK. This was part of a total of 5.8 million incidents of cyber-crime recorded over the same period.

Cifas, a non-profit organisation that aims to help prevent fraud, records instances of fraudulent crimes among its members and recently released its annual Fraudscape report. It showed a 49% increase in identity fraud – with 169,592 cases in 2015. Overall fraud was up 15.9% according to their report which also included crimes like insurance fraud and asset conversion.

A survey¹ commissioned by Equifax of over 2000 people in the UK found that 55% of people were either fairly or very worried about being the victim of identity theft. It’s clear that the growth of identity theft has resonated to a degree, but as the Cifas reports shows there is still a lot of work to be done in terms of education and prevention.

How Identity Theft Helps Fraudsters

There are various ways criminals can use identity theft to steal money, once they have got hold of your information it is case of trying to extract as much as possible before the crime is uncovered. This is why it’s important to be vigilant and to be aware of any unusual activity on your bank or credit accounts.

Identity fraud is when a criminal uses your personal data to open a new account or take out a new financial product. For example, a stolen passport and discarded utility bills could be used as proof of identity and address and be used to open a new bank account.

Facility takeover fraud is when an existing account is hijacked – this might be because a fraudster got hold of a pin code or password that gave them access to one of your accounts. There are various ways this can happen – through phishing, email scams, discarded letters or computer viruses that hack stored information.

The Role of Social Media in Identity Theft

Social media has been a boon to criminals looking to commit identity theft, as it encourages users to openly share private information about themselves for everyone to see. It might seem innocent at the time, but revealing your age, birthdate, choice of bank, address or even your mother’s maiden name can be used to compromise your accounts. If you think of the type of security questions you get asked when setting up a new account, even revealing the name of a pet or your favourite colour could be useful to criminals.

This video about identity theft, produced by Cifas in partnership with Equifax, shows just how easy it can be for someone to get hold of biographical data, which could then be used to hijack or fraudulently set up an account or take out a financial product.

How to Reduce the Risk of Identity Theft

The first step to reducing the risk of identity theft is to ensure that you don’t give criminals easy access to your information. This means shredding documents that you are throwing away – bank statements, utility bills, credit card statements – anything that could be used as proof of identity or that has information about your accounts.

If you lose a payment card or important documentation like a passport – make sure you alert the appropriate authorities as soon as possible. You should also regularly check your accounts for any unusual activity and report it to your bank or card issuer.

If you use social media, make sure your privacy settings prevent people you don’t know from accessing too much information. If you use open networks like Twitter, do not give away sensitive details like your address or phone number. A cautious approach is best, especially if someone contacts you asking for information.

If you are the victim of identity fraud, there is a chance that you will be protected by your bank or credit card company, who may help reimburse any losses. In serious cases it can take months or years to undo the damage caused by fraudulent activity. It could have implications for your credit history, which in turn may affect your ability to borrow.

If you are interested in keeping a keener eye on your personal information, your Equifax Credit Report & Score, which includes WebDetect, is free for the first 30 days then £14.95 monthly, and provides you with daily alerts if we find your personal data on websites used by fraudsters.

1. *YouGov survey, total sample size 2060 adults. Fieldwork was undertaken between 6th - 7th June 2016. The survey was conducted online.