Identity Theft

What is identity theft?

Posted on 10th September 2014

One of the most surprising parts of personal finance is dealing with identity theft. You might wonder what on earth does my identity have to do with theft and my personal finances? It turns out it has to do with a lot.

One thing is happening and it’s shocking: it is the rise of identity theft. Criminals are getting wise to the old saying that it is easier to steal money with a pen than a gun, and now financial criminals are using identity theft to fund their lifestyles. Action Fraud has found that 4 million Brits are victims of identity theft. This is a staggering number for something that many people don’t understand.

What happens if someone steals my identity?

Firstly, you might not even realise that they have taken your identity. Every case is unique but there are some patterns to look out for:

  • Identity thieves love to steal credit cards so they can run up the credit cards without paying for them
  • The rise of technology has meant that it is easier for these thieves to find victims
  • People putting too much information on social media also makes people susceptible to having their identities taken

Whoever steals your identity can wreak havoc on your personal finances. Imagine someone takes your debit card that you use for your personal finances and going on holidays. That person could spend all of your money and then you could be fined for the fact that you have not kept up with direct debits. Imagine that you have savings that are linked to your debit card. You could have an amount like £1,000. If an identity thief successfully steals your identity, that amount could be whittled down to nothing. There is no guarantee whatsoever that your bank would ever refund you the money. Equifax said that £1.6m worth of card fraud happens in the UK every day. This makes it even more important for you to keep your credit and debit cards safe. Ensure that you don’t lose them and if they are lost or stolen, call your bank immediately so that they can be registered as lost or stolen before identity thieves have the chance to start using them.

What types of financial products should I be aware of that can be stolen?

  • Credit cards
  • Debit cards
  • Bank statements
  • Business bank statements
  • Store cards

According to Action Fraud, only 25% of Britons are shredding bills and bank statements before putting them in the bin. This is a small number of people considering how important it is for no one to see your bank statements. Bank statements have important details such as your international bank statement number and your address. Don’t forget that in the UK, proof of address is one of the most important things you need in order to get credit. Shredding bank statements is critical if you want to protect yourself against identity thieves who are looking through bins for bank statements for the critical thing they need: an address.

Identity theft caution

How can I protect myself against identity theft?

You can start by making simple precautions part of your financial lifestyle. Don’t leave your bank statements in obvious places around the house. When you are finished reading them, ensure that they get shredded so that no one can see your details if they go through your bin. You can go the extra mile even further by reading your statements online and ensuring that your laptop is protected so that no one can log in and read your statements.

According to a study on identity fraud from the Cabinet Office, identity theft costs the UK £1.3bn per year. This proves the massive implications that identity theft has across the entire economy even if you feel like it is only you that is experiencing the stress of identity theft. Use our detailed tips to ensure that you can protect yourself from it.

How do you protect yourself? Let us know by sharing your tip bellow.

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