Protect against ID theft and ID fraud

Worried about the safety of your personal data?

How do you protect yourself and your personal data from ID theft and identity fraud? Abject apologies from the Prime Minister and the standard knee-jerk government reaction - set up a review; the Child Benefit Agency has lost the personal details of every parent who receives child benefit, including names, addresses, dates of birth, national insurance numbers, child benefit numbers and bank accounts. As a result, 25 million people are now vulnerable to identity fraud if the data on two discs falls into the wrong hands.

It's just the latest and certainly the biggest in a long line of data security breaches; writ large it begs the question of just how secure ID cards will be. At the individual level it serves to underline recent research showing that many of us do not trust big institutions to keep our personal information safe. The Canvasse Opinion survey found that 34% of us do not trust insurance companies, 33% think Internet retailers aren't secure and 32% believe that government cannot be relied on to safeguard the data that can be used to impersonate us, borrow money in our names - and ruin our lives.

Find credit cards that protect you from internet fraud.

"The Government and banks are absolutely right to warn people to check their bank statements regularly," said Helen Lord, Compliance Director at Experian, "but if the details fell into the wrong hands, fraudsters are more likely to attempt to use the data in the lost CDs to apply for new credit in their victims' names - identity fraud. Monitoring your bank account is no defence against this crime."

Identity fraudsters are willing to wait lengthy periods before using the data to commit identity fraud and, with so many potential victims they could have supplies of personal information to keep them busy for many years. Credit monitoring is an effective method of protecting yourself that it is recommended by the Home Office and many responsible organisations automatically offer it to customers and clients who have been affected by a data breach.

Is your credit record correct? Check your credit reference, credit file, credit score with CreditExpert from Experian.

Just how serious is this data breach?

Paul Simms, CEO of fraud protection specialist the 3rd Man, said, "The extent to which it causes problems largely depends on where the CDs turn up. If they are already below several feet of rubbish then it's unlikely to cause any difficulties, of course. On the other hand, if there were to end up in the hands of organised criminals, this poses serious issues but only to a certain degree."

Experian warns that the exposure to identity theft is not confined to the parents and carers who receive Child Benefit. "The children whose names, addresses and dates of birth have been lost are also at risk," said Helen Lord, "especially those who are between 15 and 17 years old now. The fraudsters will wait until they turn 18 and start applying for loans, credit cards, mobile phone contracts and other credit products in their names. That could have a catastrophic effect on their ability to get on the housing ladder, rent a flat, obtain their first credit card, obtain a loan for their first car, even open a bank account."

If you think you could be at risk, take these simple precautions as soon as possible:

• Check your bank statements carefully. With your account data and basic personal information, criminals could try to get hold of your money. If you spot any unfamiliar transactions, tell your bank immediately and explain the circumstances.
• Look at your credit report. The information in the Child Benefit Agency records is enough for a criminal to apply for loans, credit cards and even mortgages in your name as well as other forms of credit such as mobile telephone and catalogue accounts. Your credit report lists all your credit commitments and recent applications for credit, so you can instantly see if someone has been trying to use your ID and put a stop to problems before they can develop.
• Minimise the information you post on social networking sites. Organised gangs are now focusing on ID fraud as a profit centre and they know that many people give away useful snippets that could be passwords or key dates giving access to your bank and card accounts. Edit out the names of pets, mothers maiden name, where you went to school and anything else you might use as a password or PIN.
• Watch out for hoax calls, letters or e-mails. Taking advantage of your distress in the wake of a data breach, criminals may call, e-mail or write pretending to need further information in order to protect you. In fact, they hope to rip you off more thoroughly so dont give away information to people you do not know. Check with organisations that might have a genuine reason for contacting you before you part with your data.
• Ensure that your bank and credit card account passwords do not relate to the data that could be compromised. Many of us tend to use details such as childrens names and memorable dates as passwords to protect our bank and credit card accounts. Fraudsters are likely to make a good guess at these passwords which will give them access to your finances for further theft and much more. Make sure you update your passwords on a regular basis and use unique words that do not relate to data that could be compromised in a data breach.

Robin Amlot
21 November 2007 © Moneyextra.com

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