Identity theft is a fraud where someone pretends to be someone else and either steals money or gains some other benefit. It can have disastrous consequences but there are some simple steps which will lower the risk of you becoming a victim.
This blog article provides an overview of identity theft, also referred to as identity fraud. It lists the common methods of how it happens, the damage it can do, how to prevent it and what to do if you are a victim of identity theft. It also shows how you can get a free credit report which is an excellent step in monitoring whether your identity has been compromised.
Table of contents
Why do people steal identity?
There are a number of reasons people steal identity. Usually the end objective is to get a financial gain.
Once a criminal has stolen someone’s identity they can do the following with the stolen identity:
- open a bank account or credit card,
- apply for other financial services,
- run up debts or obtain loans,
- apply for a mobile phone contract,
- apply for any benefits (e.g. Centrelink),
- apply for a driving licence,
- register a vehicle,
- apply for a job,
- apply for a passport in your name.
How does Identity Theft happen?
There are numerous ways in which identity theft occurs. The below are some of them:
- Stolen or lost wallet/purse,
- Stolen or lost digital devices,
- Mail Theft,
- Bin Theft,
- Burglary,
- Email and text messages,
- Unsecured websites,
- Unsecured home network,
- Compromised credit card readers,
- Third party data breaches.
This website expands on the above methods for how identity fraud can occur.
What does it matter if someone steals my identity?
Identity theft is a serious issue in society, with serious consequences for the victim. The impacts can last from a week or so to several years, and the possible consequences are equally as broad.
It is an emotionally challenging time. Someone is pretending to be you and breaking the law. A basic scenario is this:
- A thief secures your identity,
- The thief opens a credit card in your name,
- The bills go to the thief and are never paid,
- The bank thinks you are the one not paying the bills and records this on your credit file.
A different scenario is this:
- A thief secures your identity,
- The thief commits an arrestable crime and gets caught,
- The thief provides your details to the police,
- You end up with the criminal record.
Most of these things will eventually get sorted out, but it can be a stressful and time consuming process.
Simple steps to protect me from identity theft:
Credit File
Monitoring your credit file allows you to see whether any loans, credit cards, mobile phone plans etc have been opened in your name. As financial reward is the usual motive for identity theft, monitoring your credit file in an excellent method to monitor whether your identity has been compromised. You can fill in a form and apply for a free copy of your credit file here. It is also possible to sign up to a service which alerts you whenever changes occur on your credit file.
Post
Stealing mail is often the first step in identity theft. You will reduce your risk considerably if you install a secure, lockable letterbox. When you move house arrange for all mail to be forwarded to your new address.
Computer
Installing security software and keeping it up to date will help protect you from hackers, scams and viruses. You should also never open any attachments from an unreliable source. And, no matter how official it looks, you should never follow a link from an email which then asks for you to log in with a password.
Don’t visit dodgy websites, and always lookout for the padlock.
Shred it … or regret it.
Documents containing account details, dates of birth or tax file, Centrelink or Medicare numbers need to be shredded before being discarded. If you don’t have a shredder, then just tear it up multiple times.
Be smart on social media
Companies like Facebook frequently update their privacy policy, and sometimes your privacy settings can change without you knowing it. It is best to just assume that everything you post on social media is accessible to everyone else in the world. Scammers can use social media to find out where you live, work, the names of your spouse, children and pets and even your maiden name.
Don’t accept unsolicited ‘friend’ requests
Monitor your bank transactions
Several times in my life I have been made aware that my credit card has been compromised because of transactions I didn’t recognise. You must look at your bank statements and check that there have been no payments that you are unaware of.
The Australian Federal Police provides further information on id theft which can be found here.
How do I tell if my identity has been stolen?
If your identity has been stolen, unfortunately you may not realise for some time. If any of the following happens, then you may be, or are about to be, a victim of identity fraud:
- You receive an email, text or a phone call out of the blue for personal information,
- Your mailbox has been broken into.
- Unusual bills or charges appear on your bank statement,
- Mail that you’re expecting doesn’t arrive,
- you receive bills, invoices or receipts for goods or services you didn’t order,
- You get calls following up about products and services that you’ve never used,
- You are unable to log into your social media or email account, or your profile has been logged into from an unusual location.
What to do if my identity has been stolen?
The first thing is not to panic, the second is to act.
Report it to the police
The benefit of this is to get a police report number which you can then give to other institutions like your bank, or other government departments.
Contact your bank
Identity theft usually entails gaining access to your bank accounts. You need to contact your bank and alert them to the identity theft so that your accounts can be frozen. Banks are well versed in identity theft and will guide you through the process.
Change your passwords
If you have had a computer or digital device breach, it is important to update relevant passwords.
The Department of Home Affairs offers a service called ‘IDcare’. It is a free service which will help you repair any damage done to your reputation and credit file. The Department of Home Affairs also offers the ability to get a Commonwealth Victims’ Certificate which can be used to help support your claim of identity theft. Unfortunately, both these options require you to deal with the Department of Home Affairs which is an incredibly bureaucratic and inefficient organisation.
The above will hopefully help you secure your identity against id theft. If you’d like to secure your your retirement plans, please seek some advice on financial planning from Cornish Wealth Management. No matter where you are in Australia, you don’t need to search for a ‘financial advisor new me‘ to find the best adviser for you.
