With a cautious approach and a keen eye for the tell-tale warning signs, you can protect yourself against identity theft.
Identity theft is when somebody uses your personal information for their own personal gain. Identity theft can take on many forms, for instance, someone can use your steal your credit card details, hack into your bank account or even applying for loans in your name. Criminals have also been known to conduct businesses in your name.
Your credit file and identity theft go hand in hand; if you are a victim of identity theft it will have a huge impact on your credit file, but by checking your credit file you can stay alert to irregularities and errors and report instances of identity theft.
In the guide below you can find out more about identity theft, some ways your identity might be stolen, how it affects your credit and how you can protect yourself.
How many Australians are affected by identity theft?
According to a survey conducted by credit reporting bureau Equifax, more than one in five Australians (17%) have had their personal information stolen at some stage. During the period April 2014-15, 5% of Australians, which is approximately 772,000 people had experienced identity theft.
A 2012 survey conducted by the Attorney General's Office found that roughly a quarter of Australians had been victims of identity fraud, or knew someone who had. More than 50% of this fraud occurred through mail theft, by the victim losing credit or debit cards, or losing important documents such as birth certificates and passports.
The Australian Bureau of Statistics’ (ABS) Personal Fraud Survey found Australians lost an estimated $1.4 billion dollars due to personal fraud in 2010-11.
Approximately 80,300 Australians aged 15 years and over were victims of identity theft in the five years prior to the survey interview, and around a quarter of those victims had incurred financial losses as a result of having their personal details stolen. Approximately one in five victims of identity theft had their personal information used for applications for a loan or to gain credit, making it the most common way that personal information was used.
Today, criminals have more ways than ever before to scam you out of your money. For example, in one case, an unsolicited pop-up advertisement online duped an unsuspecting consumer into thinking she had won a holiday to the Bahamas. All she had to do to claim the prize was hand over her credit card details, which then resulted in a significant sum of money being charged to her card.
In another 2012 case, thousands of Australians were caught up in a sophisticated email ‘phishing’ scam pretending to be from the Australian Taxation Office (ATO). The email warned people there was a problem with their tax return and linked to a fake page setup to look like the ATO website, which then deposited malware on users’ computers to access their banking information.
How can your identity be stolen?
- Rubbish sifting. Many people make the mistake of throwing away bills and bank statements without destroying them. Scammers can go through your rubbish and find all the information they need to steal your identity.
- Theft. Criminals can get access to plenty of your personal details by stealing your wallet or handbag, or stealing letters from your mailbox.
- Phishing scams. Scammers can create elaborate ruses to trick you into handing over your personal or banking information. A common example is sending an email or SMS that looks like it comes from your bank or telecommunications provider to fool you into giving them your bank account numbers, credit card details and passwords. Another similar scheme involves scammers posing as someone from your bank and informing you that your card has been cancelled because of suspicious activity. Then they will ask you to give them your important account details so they can confirm your identity.
- Social networking. Have you ever stopped to think about how much information you give away online? Simply by signing up to Facebook or other social networking sites, scammers can track down personal information like birth dates, where you work and your family details.
- Other online scams. Thieves set up bogus retail websites and record your details when you make a purchase, or even post fake job ads online. They can then use the information people unwittingly provide in the job application. Spyware or malicious software can also install itself on your computer and steal your details.
How can identity theft affect credit file?
If someone has access to your financial or personal details they can damage your credit file. They can apply for new loans, credit cards and mobile phone contracts in your name with no intention of ever paying back any money they owe. They can also max out your existing credit cards and spend money already in your bank account. All of this information will be recorded in your credit file and affect your ability to access credit in the future. Information that's recorded in your file includes:
- Credit applications you've made for the last five years
- Information of current and past credit accounts you've held
- Utility accounts for more than $150 that have been overdue for more than 60 days
- Clearout listings, where a lender has unsuccessfully tried to contact you regarding a debt and believes you have decided not to pay it
How to order a copy of your credit file
You can receive email alerts when changes are made to your credit file. You'll also receive a fast-tracked credit report containing
- Consumer credit enquiry details
- Credit accounts you hold
- Any enquiries made on your credit file
- Details of any writs, summons or court judgements
- $79.95 p.a. annual fee
How to protect yourself from identity theft
There are several simple steps you can take to avoid becoming a victim of identity theft:
- Secure your personal documents at home. If you’re throwing any documents away, make sure to shred them first.
- Secure your mailbox with a lock and remember to redirect your mail if you move.
- If your handbag or wallet is lost or stolen, cancel all your credit cards.
- Inspect your credit card bills for any suspicious charges. If you receive new credit cards you didn’t ask for or bills for goods and services that aren’t yours, investigate why.
- Be cautious when using social media and limit the amount of personal information you publish online.
- Select passwords for your online accounts carefully. Also, use security software on your computer and mobile phone.
- Treat any request for your personal information over the Internet, phone and in person with caution.
- Don’t conduct any transactions on unsecured websites. Make sure a website is legitimate before handing over any details.
- Visit www.SCAMwatch.gov.au to learn how to avoid common scams.
- Check your credit file regularly.
- If you believe you’ve been the victim of identity theft, contact the police and any relevant financial institutions immediately.
Some credit agencies in Australia also offer various services to help protect against identity theft. For example, Equifax Identity Watch is a cyber-monitoring product that detects fraud by constantly looking for things like credit and debit card numbers, phone numbers and email addresses in places on the internet where information is known to be illegally traded. If Identity Watch finds that your identity has been compromised, it will automatically send you an email alert so you can take action immediately.
If you become a victim of identity fraud, Equifax’s Your Credit and Identity Guard Insurance helps you with the cost of restoring your identity and reduces the impact and risk associated with loss and theft. It takes some of the stress out of restoring your identity and regaining control of your finances and provides you with vital funds while you get back on your feet.
So while identity theft is a crime on the rise and there are more ways you can be caught out than ever before, a cautious approach to managing your details can ensure you won’t become a victim.