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Category:
News /
Personal Finance /
Identity Theft
/ April 2008
Identity Theft On The Rise
“The South African Fraud Prevention Services reports that South
African business lost R276 million to identity theft-related fraud
in the first 3 months of 2008 alone, a substantial increase on the
2007 figures”, says Gari Dombo, Managing Director, Alexander Forbes
Insurance.
In
South Africa credit cards make up the bulk of crimes classified as
identity theft - as opposed to the more serious crime of having your
identity stolen.
“So, while actually having your identity stolen is less likely than
having your credit card nicked, the one tends to lead to the other",
says Dombo.
The
identity theft fraud chain usually begins with the theft of
documents like your credit card, driver’s license, passport or ID
book. In time victims fail to receive letters that they are
expecting from their banks.
Or,
when applying for state benefits, they are told that they have
already claimed them. Similarly, they often find their loan or
credit card applications turned down despite having a good credit
history.
"And, certainly, the results of criminals opening accounts in your
name, or getting false identities for themselves or other criminals
using your personal details can be devastating,” says Dombo.
Once criminals have your information, they can register new credit
or bank cards and run up debt in your name. They can take out loans
or apply for new passports or identity documents, using your
identity for criminal activity.
They can rent an apartment and open a telephone account using your
details. Fraudsters could even give your name to the police if they
are arrested. If released on bail, any future arrest warrants would
also be in your name.
Usually, says Dombo, “By the time you discover you have become a
victim of identity theft your identity might have been used by
someone else for some time and the situation could be much worse
than it first seemed.”
If
you ever suspect that your identity has been stolen, it is critical
that you contact your bank immediately. Financial institutions
should be able to help you alert credit bureaus and direct you to
the appropriate resources.
This, though, says Dombo, “Is only the beginning of an often long
and expensive process of reclaiming your identity, clearing your
name and restoring you credit worthiness.”
The costs of restoring your identity include:
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Lost wages due to the months and sometimes years that it takes
to clear your name and regain your fraud-free legal status.
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Administrative expenses such as phone bills, certified mailing
and notary costs etc.
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Legal fees to defend actions against creditor or collection
agencies for debts incurred without your permission.
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Liability cover, allowing you to pay creditors where liability
is incurred without your permission.
Dombo says “There is no sure way of preventing identity fraud, but
there are steps you can take to minimize the chances of it happening
to you”, these include:
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Not carrying extra credit cards.
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Cancelling any accounts you don’t use.
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Regularly checking credit reports for unauthorised activity.
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Check your credit card and bank statements every month.
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Shred or destroy papers containing sensitive financial
information or identifiers. Don’t simply throw them into the
bin.
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Guard your identity and account numbers. Only provide
information necessary to facilitate a transaction you initiate
or when you apply for credit.
While these precautions and immediate responses are important, Dombo
adds that, “Since we part with details of our identity on an almost
daily basis it is impossible to ensure that that you never become a
victim of identity fraud.”
Dombo believes, “Identity theft is not something most people think
about at all. Until it happens, people are unaware of just how much
it can cost in time, money and expertise to restore your identity
and repair the damage to your personal financial information, legal
status and reputation.”
“Considering the very real costs, identity theft insurance, like
third party liability, is likely to become an essential insurance
purchase,” concludes Dombo.
Source: ITInews – Insurance
Times and Investments Online
www.itinews.co.za
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