Protect yourself from identity theft

Identity theft is when somebody uses your personal information for their own financial gain. Common examples include stealing your credit card details, hacking into your bank account or even applying for loans in your name.

This kind of activity can have long-term impacts. If you are a victim of identity theft it can have a major impact on your credit rating. By keeping track of your credit file and credit score, you can be alert to irregularities and errors and quickly report instances of identity theft.

This guide explains how identity theft happens, how it affects your credit and how you can protect yourself.

How many Australians are affected by identity theft?

The cost of identity crime in Australia reached a staggering $3.1 billion in 2019, according to the Australian Institute of Criminology. This was a substantial 17% increase from 2016.

Approximately one in four Australians (25%) has experienced misuse of personal information at some time in their lives. On average, identity crime victims lose $300 per incident and spend and 34 hours dealing with the consequences.

COVID-19 has further fuelled the growth in identity crime. In August 2020, the ACCC reported that identity theft was up 55% since the beginning of the pandemic.

A Finder survey found that nearly half of Australians (47%) had received a fraudulent call or text message since the beginning of the pandemic. Alarmingly, 69% of those people did not report the crime.

How can your identity be stolen?

• Theft. Criminals can get access to plenty of your personal details by stealing your wallet, handbag, mobile phone and letters from your mailbox.
• 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.
• Phishing scams. Scammers 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 came 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 such as your date of birth, 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. Spyware or malicious software can also install itself on your computer and steal your details.

How can identity theft affect your credit report?

If someone has access to your financial or personal details, they can seriously 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 that's already in your bank account.

The majority 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 about 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 that you have decided not to pay it

What should you do if you are the victim of identity theft?

Anyone can be a victim of fraud, so it's important to know what to look for and how to respond once you find out your identity has been compromised. Here is what you should do:

• Contact your financial institution. Call your bank immediately and inform them that someone has access to your account or credit card. The bank will usually cancel all affected credit cards and close any suspicious accounts opened in your name.
• Place a temporary ban on your credit report. This is a free service offered by the three credit reporting companies: Experian, Equifax and illion (formerly Dun & Bradstreet).
• File a police report. This will allow investigations on the fraud to begin and give you access to a police report that you can give to financial institutions to avoid a bad credit rating. The police will also ensure that relevant government agencies are involved in the case if your documents were stolen, for example, your passport, Medicare card or birth certificate.
• Get a copy of your credit report. This will allow you to contact credit report agencies and inform them of the identity theft so that they can help repair your credit standings by adding notes to your credit file.

There are further steps you can take if you feel that the above did not help to rectify your situation, or you find that the steps you took were not recognised by certain businesses or agencies.

• If you feel that your privacy has been breached, you can contact the Office of the Australian Information Commissioner and lodge a complaint. Before contacting the commissioner, you should try to resolve matters with the agency or organisation concerned.
• If you are a victim of a Commonwealth identity crime and the theft is causing problems in your personal life or with your business, you may choose to get a Victim's Certificate. This certificate is provided by a State or Territory magistrate, and you can present it to agencies or businesses to help support your claim that you have been a victim of a Commonwealth identity crime.

Finder's free credit report service gives you a free copy of your credit report and score and will also notify you whenever something on your credit report changes. You can check your credit report at any time to make sure the information is correct.

So while identity theft is a crime on the rise and there are more ways that you can be caught out than ever before, a cautious approach to managing your details can ensure you won't become a victim.

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