Imagine that you are applying for a mobile phone contract.
You have a steady income, a clean credit history and can easily afford the payments. In other words, you're a safe bet. But you get rejected.
It transpires that there are other loans and maxed out credit cards in your name: an extra £20,000 of debt. You think: 'why me?'
Followed swiftly by: 'What has happened?' and 'How on earth can I sort it out?"
Those who have had a letter arrive demanding final payment of a debt that they knew nothing about ask the same thing.
The fact is that, in both cases, these people have fallen victim to identity theft.
A man* had his shoulder bag stolen from a bar on a night out. The loss of some precious items was one thing, he reported this to the police and was able to claim on his insurance. His bag, however, also contained some financial statements and a diary.
Three months later, he was telephoned by his bank to enquire whether he had made a large withdrawal from a foreign location without telling his bank that he was travelling. He hadn't, of course; but and this only served to reveal eventually a string of small transactions and withdrawals, combined with subsequent applications for new credit to a variety of organisations.
The statements and details in his shoulder bag had contained enough information for criminals to hack into numerous accounts and impersonate him successfully in order to gain credit elsewhere.
* anonymised at the victim's request
Identity Theft (also known as impersonation fraud) is the misuse of the identity of another person, without his or her knowledge or consent.
Usually it means that the fraudster has used another person's name, date of birth, current address or previous addresses to obtain products or services.
The fraudster gets the goods but the victim gets the bill.
Until recently, fraudsters targeted those identities that they perceived would offer them the best chance of gaining access to products or services: frequently professional men in their late 30s or 40s.
Today, however, with the changes that the internet has brought to the ways we carry out transactions, victimisation is more random.
In 2011, a staggering 58% of all frauds identified by organisations that are members of CIFAS, the UK's fraud prevention service, related to the misuse of identity details.
That includes impersonation but also the hacking and takeover of a victim's existing accounts.
Moreover, about half of fraud cases recorded last year - over 120,000 incidences - had an identifiable victim.
Fraud is far from being a victimless crime.
Provided that he or she has not acted negligently or in a way that helped the fraudster, victims of identity fraud are not held liable for any losses.
A recent CIFAS survey, however, revealed that the time taken to sort out the mess and the stress involved - were details stolen? was an account hacked online? - were the worst impacts for victims of such frauds.
In the worst case scenarios, it can take up to 200 hours, equivalent to a year's annual leave.
As we've seen, there's not much - beyond being generally careful - that you can do to prevent identity theft. But deal with it effectively and you can mitigate that stress and distress. Here's how:
First, should details like statements, cards, chequebooks etc be lost or stolen, immediately inform the organisations involved.
This way, they will know to keep close watch for any unusual activity on your account.
Second, in order to check whether your details have been used to open new accounts, you can request a copy of your credit file.
More details on how to do that here.
Third, there are specific services that can be useful where you are at particular risk because, for example, very sensitive personal documents - statements with account details or passwords listed, passports, driving licenses - have been stolen.
In such cases, it could be worthwhile taking out a CIFAS Protective Registration.
Our service, recognised by over 260 household names, notifies CIFAS Members that they must undertake additional checks to ensure that the application they have is really from you and not a fraudster using your name.
Essentially, it's a preventative version of a service that CIFAS uses to protect millions of people every year.
If someone applies for a product fraudulently from a CIFAS member and gets caught we put a 'Victim of Impersonation' warning next to the victim's name. Next time, someone uses the same details for an application, extra identification checks will be carried out.
The problem, of course, is that the first fraud has to be caught, Protective Registration flags up a similar warning but it stops the fraud happening in the first place.
There are other preventative services available, such as insurance products, which may offer a range of other features with different premiums as opposed to a one-off fee.
Finally, don't panic.
Identity theft is a nasty experience but the damage can be undone.
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