Identity Theft

Posted on 3 Jan 2006 at 16:59

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The latest criminal trend has put the media in a frenzy, but how exactly do fraudsters steal your identity? Simon Edwards looks at the techniques used and explains how you can prevent it happening to you

Identity theft is big news. TV adverts show Alistair McGowan spending your cash. Newspapers report that this type of crime has spiralled in popularity. And surveys scream that the majority of the British public is worried about having their identity stolen.

For many of us, identity theft is a phrase that instils fear, but what exactly does it mean? Does the digital age make it easier to have your identity stolen? We've investigated the truth behind the hype, drilling down into the figures, headlines and reports to bring you the low-down on what identity theft is, how it affects you, how criminals do it and what you can do to stop them.

What is ID theft?

Identity theft involves a criminal gaining access to information and documents about a victim. They can then masquerade as the victim to access bank accounts, apply for credit cards and loans, and use any number of other financial services.

The victim could be a member of the public picked at random or even a deceased individual. The Credit Industry Fraud Avoidance System (CIFAS) claims that the largest single form of identity theft is from dead people, which accounts for around 30 per cent of this type of crime. As we'll see, though, even stealing the identities of the dead is not a victimless crime.

The end result of a successful identity theft is that an innocent person ends up facing a large bill and, if they are unlucky, a large bailiff. Their credit rating could be damaged, affecting their ability to take out legitimate loans, transfer their mortgage, or organise insurance. If the police get involved victims could spend time helping with enquiries.

Being the victim of identity theft is likely to cause emotional distress rather than a large debt. It's important to remember that, ultimately, you are not liable for the behaviour of the criminal who is pretending to be you. However, you will still want to avoid this situation, if just for an easy life. With a bit of effort you can help prevent your details falling into the hands of identity thieves and reduce the chances that you will fall foul of them.

How common is it?

Identity theft is not very common in the UK. Although the figures are rising, fraud committed by ID thieves still rates low on the charts. In 1999 there were 20,000 recorded attempts of identity theft in the UK, which rose to 101,000 in 2003. Although final figures for 2005 were not available as we wrote this article, conservative estimates indicate a total of 144,000 cases. These are attempted thefts of identity, not necessarily successful ones.

Considering that the UK has a population of around 60 million, we can expect one attempt at an identity theft for every 600 people alive in the country during 2005. There are no figures available to say how many of those attempts will succeed, but CIFAS estimates that financial institutions spot 90 per cent of attempted frauds. Even if every attempt to steal an identity succeeded, most of the thieves would be thwarted when trying to commit a fraud.

The probability of being affected by an identity theft is harder to calculate, because 30 per cent of identity theft victims are dead. If we include them, the probability increases to one in 418 people. If you count one member of the deceased's next of kin as a victim, then this is a more accurate figure.