Identity fraud and identity theft are phrases that are used interchangeably but a distinction can be drawn between the two. This article explains the differences between the two, and looks at what you should do if you believe you've fallen victim.
What is Identity Theft?
Identity theft describes when your personal details are stolen, and can take place when you are both alive or deceased.
The thieves can steal your information in a variety of ways. Some of the more elaborate ways of stealing your information involve the internet, with little warning for you at the time that you might be being scammed. You may unwittingly enter your details into an unsecured, or spoofed website. For more information on avoiding this see our guide 10 Tips for Spotting Scams. Alternatively you may receive an email correspondence 'phishing' for your data. There are many types of email scam, but often people are fooled into believing that the email in question is from a trusted source (such as a bank), and reply without questioning it.
Aside from the internet, identity theft may occur locally with the theft of your purse and wallet – or worse still your refuse. It's quite common for thieves to sift through your rubbish looking for letters and other such documents which contain personal information. If they find enough, it could lead to them impersonating you to secure credit cards and other types of finance against your name and address.
Believe it or not, your identity may also be stolen when making purchases on your debit or credit cards. Some fraudsters working as sales staff have been known to 'skim' customers' card purchases, which allows them to create a clone of the card used to pay for the items.
What is Identity Fraud?
Identity fraud is basically what comes after identity theft, and refers to the stolen details being utilised to secure illegal credit or purchases.
Often victims will first learn of this when they get a bill, or notice something on their statement that they've no recollection of buying. Worse still, it's not uncommon for victims to first learn of identity fraud after they receive demand letters from debt management companies
There are many ways in which your details may be stolen to commit fraud. Some of the most common things a fraudster will use your details for are:
- Opening a bank account
- Opening credit cards/store cards
- Obtaining state benefits in your name
- Hijacking existing bank accounts etc.
- Opening a service contract (e.g. Mobile Phone)
- Faking official documents in your name such as your passport and driving license
Avoiding both theft and fraud
As mentioned, it can be surprisingly easy to have your identity stolen if you don't take the necessary steps of prevention. Here are a few pointers to bear in mind:
- A bank building society will never ask for your full password over the phone – instead they ask for certain characters from it. If you receive any emails or phone calls from your bank, always be alert, and scrutinise any data they ask for. If in doubt ask for a return number to call back on, then do some internet research on that number.
- Likewise a bank will never ask for your PIN number – it's explicitly for your use of the card, and as such no-one else will ever require that information from you
- Create strong passwords online using a mixture of upper and lower-case letters, as well as numbers and symbols where possible. Better still use a password generator and keep them stored in an encrypted vault software, with one long complicated password that you remember with the use of a mnemonic.
- Protect any internet connected devices with security software such as firewalls and antivirus.
- Shred any documents you're throwing away. Switch to electronic billing where possible and consider scanning in a copy of any necessary paper bills, so you can shred and dispose of them as soon as possible.
- If you move house, ask Royal Mail to redirect your post for a year
- If you're ever in doubt, refuse to communicate with that person until you or they can properly confirm their identity.
For more tips on spotting scams please refer to our 10 Tips for Spotting Scams. If on the other-hand you've already fallen prey, you may be interested in our guide How To Get Your Money Back After Being Scammed.