Understanding identity theft and identity fraud

Identity theft is a growing problem in the United Kingdom. It’s when someone steals 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 we’ll 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.

Identity theft statistics

Worryingly, identity theft is on the rise. There have been 3.8 million fraud incidents reported in the year to March 2019; a 17% rise over the year.

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.

Cifas members reported 8% more cases recorded to the National Fraud Database in 2018 than in 2017. People under 21 experienced the greatest rise in fraud, and there was an overall 41% increase in plastic card fraud compared to 2017.

The link with social media can’t be ignored; 65% of people who were victims of identity fraud had a visible social media presence. Thieves weren’t just interested in new profiles – older profiles which had been abandoned but hadn’t been deleted were also a source of information for fraudsters.

It’s not just young people who are targeted more frequently by identity fraud; more than 33,000 people over 60 were victims of identity fraud in 2018.

How identity theft helps fraudsters

There are various ways criminals can use identity theft to steal money. Once they’ve got your information, it’s a case of trying to extract as much as possible before the crime is discovered and you cancel your cards and change your passwords. 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 lost or 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.

Social media and identity theft

Social media has been a boon for 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, birthday, 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

• Don’t give criminals easy access to information about yourself; shred documents that you are throwing away, such as bank statements, utility bills and 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
• 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.