Identity theft - Everything you need to know
Have you received a letter notifying you that your personal data has been leaked or stolen?
Have you noticed unusual bank transactions on your account(s), or items being delivered to your home address that you did not purchase?
Sadly, if any of these events occur, you may discover that you are a victim of, or potentially a victim of, identity fraud. In this article we look at what identity theft is and the steps that you can take to secure your personal data.
Identity theft
“Identity fraud” or “identity theft” can be deeply distressing and worrying. You may not become aware that you are a victim of identity theft until you suffer a financial loss or are unable to access a service. Discovering that you are a victim of identity fraud can leave you feeling vulnerable and worried about how to, or if you can, prevent the situation happening again. You may never discover exactly how the identity theft took place or who is responsible. It can be costly and time consuming trying to rectify the situation.
What is identity theft?
“Identity theft” involves a third party using your personal or financial information to create another “you” to then purchase goods or services, or to open bank accounts or obtain credit facilities in your name. Often you may not be aware of the theft until you receive a debt collector’s letter or are refused a loan.
Your identity might be stolen through a number of ways such as the taking of your personal possessions (for example. stealing a rucksack from a vehicle), or through more sophisticated methods such as hacking, phishing or a personal data breach that is beyond your control. We frequently read in the news about the new ways cybercriminals fraudulently obtain, or trick us in to disclosing, our personal data. One example is the receipt of a help message from an unknown mobile number purporting to be from a family member who has lost their device and is in desperate need of funds.
Cybercrime is on the rise and, unfortunately, instances of identity theft can impact your future chances of obtaining credit, renting a property, your first mortgage, or accessing services. In a short period of time, a fraudster can make it appear that you have made irresponsible and reckless financial decisions. Your identity could be used to open a bank account, take out a line of credit, take out mobile telephone contract or to obtain genuine documents like a passport or driving licence in your name.
What are the signs of identity theft?
Possible signs that you are the victim of identity theft include:
- Unusual transactions on your bank statements.
- You receive invoices or financial agreements for goods or services you did not purchase.
- You receive a letter from solicitors or a debt collection agent for a debt you did not incur.
It is important that you do not ignore any of the signs.
What steps should I take?
If you find yourself a victim of identity theft, or receive a letter informing you that your personal data may have been stolen, it may feel overwhelming. You may not know where to begin in resolving the situation and what steps you can take to prevent the misuse of your personal data. We set out below some recommended steps that you may wish to immediately take to understand the extent of the fraud and to remedy the situation.
Contact Action Fraud
Action Fraud is the UK’s national fraud and internet crime reporting centre. Action Fraud will provide you with a crime reference number and advice.
Contact your bank or building society
If you notice unusual transactions, notify your bank immediately and ask them to place any further activity on hold. Even if there is no unusual activity, it is still sensible to contact your bank or building society as soon as you become aware that you may be (or are at risk of) a victim of identity fraud whilst you try to establish what has happened. They may advise issuing a new bank card or freezing transactions over a certain value.
Review your email accounts
Your email is likely to be where you keep most of your personal and financial information. If a cyber-criminal or fraudster has access to your email account, they could use that information or access other online accounts using the “forgot my password” function. One of the first steps that you should take is to secure your email accounts and change any passwords. It is also recommended to use a two-step verification to an email account. Also think about what information you hold within the email account – payslips or bank account details. Consider regularly reviewing what the account holds and getting rid of sensitive information.
Check your passwords
It is also advisable to change passwords associated with apps or online banking. Remember: use strong passwords.
Obtain a copy of your credit report
From this you may be able to identify any new searches or accounts that you did not authorise. If you spot any unusual activity, contact the lender or the credit reference agency. Inform them that you dispute the entry, and the lender should take steps to prevent any further unauthorised activity (and minimise the financial loss). The credit reference agency may advise adding a password and regularly reviewing your credit report, to ensure that fraudulent transactions are removed.
Consider which service providers or agencies you might need to contact
Consider which service providers or agencies you might need to contact to notify them of the fraud and alert them of any unusual activity. You may need to contact, for instance, the DVLA if you believe that your driving licence is stolen.
Create a list of all fraudulent activity
Create a list of all fraudulent activity, and the steps that you have taken to understand what has happened and to remedy the situation.
What steps can I take to stop this happening again?
Everyone should be on alert to unusual activity on their bank accounts or receiving post for unknown persons at your address or from a business you do not recognise. If you spot unusual activity, follow it up.
It is important to think of your identity as an asset. It is a valuable asset that risks being compromised and exploited. As technology advances, many of us are spending more time online, and we may not be aware of how much personal and sensitive information we are freely sharing. There are steps that you can take to protect your identity from misuse. We have suggested a list of 10 steps to reduce the risk of identity theft, as follows:
Secure your documents
Store any documents holding your personal information securely and limit the sharing of this information.
Invest in security
Consider purchasing a shredding machine to dispose of any confidential paperwork containing your personal data, or a secure mailbox where post might otherwise be left in a communal residential area. Consider downloading a reputable antivirus product to laptops and mobile devices. Make sure your antivirus software is regularly updated.
Be wary of unsolicited communication claiming to be from your bank or financial institution
Be wary of unsolicited letters, emails, text messages or phone calls claiming to be from your bank or financial institution asking you to confirm your personal details, passwords or security information. This is called “vishing” or “phishing” where the fraudster will try to get information from you. If in doubt, speak with your provider directly and do not respond to the communication you are concerned about or click on any links embedded within a text message or email. Always start a fresh search on the internet or go into the service provider’s physical store.
Protect yourself online
We live in a digital word, where increasingly people post personal information on to public platforms. You might not realise it, but this can help any fraudster gather information about you for the purpose of setting up a line of credit in your name. Consider your privacy settings as to who might have access to all social media accounts you have, or what you might post.
Keep up to date
If you move house, think about putting in place a mail redirect whilst you update your contact details with service providers. Lenders often use the electoral roll to check who is living at a particular address. You can also opt out of the electoral register to prevent unsolicited marketing or junk mail.
Be vigilant
Regularly check bank statements or chase up financial statements that you had expected to receive. Spotting unusual activity early can help stop the identity thief in their tracks, and minimise the harm. If you think that your personal details or bank account are being misused, you must immediately report it to your bank. If you have been the victim of identity fraud, consider obtaining your credit report to check any unusual activity.
Add passwords and “two step” verification
Your bank may have the option to sign up to enhanced security that requires you to authenticate any online purchases. Even if you do not shop online, this can help protect your card or details if lost or stolen. Ensure that any passwords are secured.
Make sure that you are using the latest web browser or operating system
Also think about securing your home WiFi and being careful when accessing public WiFi.
When accessing the web, you may be anxious about sharing your personal data or completing a financial transaction
Make sure that you are on a trusted and secure website. Usually a secure platform will start with “https” and a padlock icon. If in doubt, don’t proceed with the transaction.
Consider registering with the Land Registry to receive alerts
If you are a property owner, particularly of a rented out or empty property or mortgage free, consider registering with the Land Registry to receive alerts if someone applies to change the property register or placing a restriction against the property so that no activity is allowed unless confirmed by you.
Below are a list of services that you may find helpful:
- Mail Preference Service – the MPS prevents the receipt of unsolicited direct mailings and is a free service. www.mpsonline.org.uk
- NCSC – the National Cyber Security Centre provides information and resources on keeping safe online. www.ncsc.gov.uk/cyberaware/home
- The Metropolitan Police Service also has a dedicated section of its website in keeping safe online. www.met.police.uk/advice/advice-and-information/fa/fraud/online-fraud/
- CIFAS - You may want to contact CIFAS (the UK’s fraud prevention service) to apply for protective registration.
What steps can I take to recover financial losses incurred?
It may take a few weeks, possibly months, to resolve the situation and restore your credit rating following the identity theft. For others, you may find that the financial impact is more longstanding.
If you can establish who has fraudulently misused your identity, you may wish to bring legal action against them for any financial loss and the detriment to your credit rating. However, often, you may never find out who is behind the identity theft, and it may be part of a much larger criminal organisation.
You may be able to recover any financial losses through your bank and building society.
You may also have an actionable claim against the organisation that, for instance, permitted the identity fraudster to set up an account in your name, and utilise your personal data. You may have a claim for the mis-use of your personal data, if the organisation failed to keep that personal data secure. This could be where your personal data has been leaked as a result of a data breach, or where an organisation has failed to protect your personal data and may have disclosed that to a fraudster.
The first step is to write to the organisation who you believe is responsible. The courts expect that you will write what is known as a Letter of Claim, setting out the legal basis of the claim, what has happened, why you believe the proposed defendant is responsible and the losses suffered. The letter provides a defendant with an opportunity to understand the claim, and to put forward its own position in response.
If you cannot resolve the dispute between yourselves, the next step is to issue the claim. If the value of the claim is less than £10,000 you may be able to issue a Small Claim via the Money Claims Service. This is an online portal that enables claimants to issue, manage and track the progress of a claim. The portal is designed to be user friendly and accessible.
Talk to us
If the losses exceed £10,000 or the claim is particularly complex, you may need to seek legal advice. At JMW, our specialist Identity Theft team can discuss with you the options to pursue legal recovery and the likely costs involved. Please contact JMW’s Identity Theft team on 0345 872 6666 or by completing our online enquiry form.