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Identity crisis - new tech gives fraudsters a helping hand
Identity fraud is on the increase and high-earning professionals are among those most at risk.
CIFAS, the UK’s fraud prevention service, reported a 32% increase in identity fraud in 2009 compared to the same period in 2008.
In addition to using your identity to open new accounts and obtain credit cards or loans, ID fraud can often be linked to serious crime including human trafficking, illegal immigration, drug running, terrorism and money laundering.
A study by Experian in 2007 found that directors and business owners were almost three times more likely to fall victim to identity fraud than the average UK resident.
Using social networking sites like Facebook and new technology like Smartphones can also increase your vulnerability. Get Safe Online, a joint private and public sector initiative aimed at promoting safe, secure internet use, found that 67% of people accessing the web from their mobiles do not use passwords or PIN functions to secure their handsets. Combined with the other information they store - home telephone numbers, family names and personal emails – new generation technology can be a goldmine for fraudsters.
Accessing the internet on your mobile phone will reveal your browsing history such as where you shop and many sites use cookies to provide a ‘remember me’ facility that pre-populates user names and passwords. In addition to this, if your handset is synchronised with your home or work PC, you could give the fraudster access to all the information stored there as well, which may include the personal details of others e.g. client databases.
Protect yourself
Identity fraud is nothing new and so most people are aware of the need to shred any documents that show personal details and will check statements and credit reports.
When paying for goods by card, CIFAS warns consumers to ensure the card is always in their sight to reduce the chances of ‘cloning’.
To protect yourself from cyberfraud, review the sensitive information stored on your computer and ensure electronic documents, passwords, etc are stored separately. Try to use memory sticks and discs rather than storing information on your hard drive.
Most people use virus and malware protection products and it’s important to review and upgrade this software at regular intervals.
What happens if you become a victim of identity fraud?
Despite your best efforts to protect your identity, you may still fall victim to this growing threat. If you suspect someone is using your identity, report the suspected fraud to the relevant authority/organisation as soon as possible and freeze the fraudulent accounts.
You may be liable for only £50 of the money taken fraudulently, but different organisations have different policies.
What’s covered under a high value home insurance policy?
Insurers will cover the reasonable and necessary expenses that you have to pay, including solicitor’s fees to defend a claim against you by a financial institution, to remove incorrect judgements, to challenge a consumer credit rating or to witness your signature. Cover also includes the fees charged when you reapply for a loan that was originally rejected. Most high net worth policies include identity fraud which obviates the need for separate insurance covers offered by the banks. Cover is not usually available under a standard home policy.
Next Steps
To discuss the issues raised in this article or for further information, please speak to your usual Perkins Slade contact. Alternatively you can call 0121 698 8000 and ask to speak to a member of our Private Clients team or email privateclients@perkins-slade.com
