Identity fraud is real and it’s scary. You can lose a lot of money and your peace of mind as well. At best, you will waste hours on the phone with 3rd parties. At worst, you will be left owing money to credit cards you didn’t even know you had.
I want to show you how you can protect yourself from identity fraud and how to find out if someone is stealing your identity for a profit.
How do I know all that?
I was a victim of impersonation. Someone was caught stealing letters from my mailbox and opening credit cards on my name!
Luckily, I found out quite early plus they did not succeed in opening an account. No animals were harmed in the making of this impersonation. But things could have turned out quite differently and very costly shall I say.
How an identity fraud is committed
Someone knows your name and where you live. It’s easy to find out about this info – either by grabbing a few letters from your mailbox, social media or just public info on Companies House / Electoral roll.
They can obtain some more info about you, like your date of birth by searching online. You’ll be surprised how much we voluntarily reveal every day. Even if you’re not on social, it’s easy, trust me.
The physical mailbox in particular contains golden info about you. Full name, address, bank account, sort code and transactions you made. Even if you only use ‘paperless’ bank statements there’s plenty of junk arriving every day like CapitalOne “apply now” credit cards waiting for you to reply back.
Ok. Once the attacker has enough info about you, they apply for a credit card or a new bank account pretending it’s you.
If they succeed, they buy the new macbook pro on your credit card, they put you in debt and sell it on eBay for a profit. Repeat until you find out you’re impersonated.
By then it may be too late! You owe £10,000 to the credit card you didn’t even know you had.
When I used to work at a fintech challenger bank, 30% of all applications were fraudulent!
Let that sink for a moment. 30%. We rejected hundreds of ‘applicants’ every day.
Unfortunately, it’s quite easy to steal identity these days especially if you’re not paying much attention. This is why you need to be vigilant and proactive. Luckily for us, it’s also easy to protect against identity fraud attacks and I’m going to show you how.
How to find out if someone is using your identity
The best form of protection is prevention.
You can prevent 99% of identity fraud by checking your credit report.
Here in the UK, banks and credit card providers have to check you are trustworthy before they can give you a loan. Yes, a credit card is a form of a loan. Your score is kept by credit agencies like Experian and Equifax who maintain a file for you.
If you have a good credit score, you qualify for a card. Otherwise, they won’t risk lending you money.
When an attacker applies for a credit product on your behalf, the card provider will have to look you up to see if you’re creditworthy. This will leave a trail on your credit report. A ‘credit search’ will show up that Santander bank, for instance, looked you up.
There are plenty of sites where you can see your credit file, often with the credit agency directly. Personally, the simplest solution I found is the website Checkmyfile.com. The first month is free and then it’s £15 per month but you can start/stop whenever you want. I quite like the user-friendly interface. They will show you all past history, even if you pay only once.
More importantly, I like that they aggregate the big 4 credit agencies on one page (Experian, Equifax, Crediva, Transunion). So you get 4 agency reports in one place.
There are also some free reports out there, TotallyMoney, ClearScore and MoneySavingExpert credit club, but I haven’t tried them.
So if you suspect that someone is using your identity, or you want to stay on top of things, CHECK YOUR CREDIT FILE REGULARLY! Check the Searches section and your Payment History which shows all your Lenders and the amounts.
Remember, spending 10 mins today can save you hours (and thousands) in a year.
Proactive > Reactive 🙂
What to do if you suspect someone is using your identity
Shit happens and the last thing you want is to check your credit file every week. Perhaps I do it every 6 months, and in between an attacker may try. Who knows.
Let’s say someone has used your identity and applied to credit cards and banks like they did to me.
If they succeed, you will see an unknown lender/bank or unpaid debt on your balance in the report. You should act immediately.
Here’s what you should do if you suspect someone is using your identity:
- Call the company they applied to and tell them it’s not you. That will make you a “victim of impersonation”.
- They will then put a flag on your name and submit a ‘Fraud alert’ on your name to CIFAS. CIFAS is a “not-for-profit” UK organisation whose aim is to prevent fraud. Most financial institutions will ask CIFAS if there is a notice of some sort on your name before giving you a card or bank account. That’s for your own protection. Let’s take a moment here and be thankful we live in a country with a mature and advanced system like that.
- Here’s the interesting part. If at any point an attacker tried to impersonate you and failed, you are now flagged as a ‘Victim of Impersonation’ on CIFAS before you even notice. This mark will tell all subsequent applications that there’s a high chance of fraud. The card company will then take EXTRA steps to verify it’s really you before giving you a product. How awesome is that? Basically, once the attacker fails once, then everybody knows about it*. This makes your life harder, of course, because future applications made by you will take longer for approval. (I think the mark lasts for 13 months). But if that saves me from all this fraud hassle, so be it.
- Report the incident to the police on Action Fraud Police
- You can pre-emptively protect yourself by registering for identity protection at CIFAS (£25 for 2 years). If you worry then totally do it. I did it.
* In fact, the attacker will most probably sign up to receive free credit reports for your name while stealing. The purpose is twofold. They want to make sure you have a good enough credit score before they apply. But more importantly, they want to check you are not a victim of impersonation. If there’s a warning on your name they will stop trying. That’s what they did to me!
How to protect yourself from identity fraud
Ok to sum up, 7 quick steps to protect yourself from identity fraud.
- Be proactive. Check your credit file regularly (every 3-6m) on sites like Checkmyfile.com. If you can’t remember when it’s due, put a recurring Google Keep reminder every 6 months.
- Make everything paperless. Your mailbox can easily be compromised and you should assume everything that goes in IS hacked already. Broker statements, SIPP, etc.
- Keep your bank accounts tidy. Don’t open a new bank account for the sake of having just another sign-up bonus. (I’m looking at you matched bettors 😉 ). It’s one more bank account to keep an eye on.
- Keep cleaning up your (physical) mailbox. Having a full mailbox is just a lot more information available for grabs to an attacker. It also shows you’re probably on holidays which makes it even more attractive to thieves.
- When moving house, set up a Royal Mail redirect to your new address. It costs £33.99 and lasts for 3 months by which time you should have changed all your correspondence to the new address.
- Use a home paper shredder to protect sensitive info. Do not throw sensitive info on your bin unless you want someone looking at how much money you’ve got up for grabs.
- Business owners: Consider setting up a separate company mailbox if you can’t trust your own or don’t have an office. UK Post Box offer that.
As COVID has taught us, prevention is better than cure!
Have you been a victim? What other tactics do you use to protect yourself from identity fraud?
Happy digital housekeeping 🙂