Preventing Identity Theft

Information verified correct on October 22nd, 2016

Learn more about identity theft, how it can affect you and steps you can take to protect yourself from identity scams.

Identity theft is becoming an ever increasing threat in Australia and other countries. Unfortunately, it is easy for people to obtain your personal information, including your names, address, credit card details and other financial information, and use it to commit financial fraud. With your bank or credit card details, bank statements and other financial documents, a criminal can impersonate you for purposes of obtaining credit without your knowledge. Identity theft is becoming more common, as criminals device smarter ways to hack into your computer or obtain your details through sly means such as email phishing. Therefore, it is now more important than ever to protect your personal and financial information so as to reduce the chances of becoming a victim of this crime.

What is identity theft?

Identity theft is when a person or group obtains your personal and financial information illegally for the purposes of creating a fabricated identity. Criminals use all sorts of tricks to get your personal information, which includes tricking you into voluntarily emailing them your information or hacking into your computer, mobile phone or even from databases held by organisations. Once they get your bank, credit card or driver’s licence details, the criminals then create a false identity in your name to use for various financial crimes. In most cases, criminals will look to steal your identity so as to apply for loans and other forms of credit in your name. Stolen credit card information can be used to run up credit card debt through purchases, and bank information can be used to apply for a mortgage, car loan or even apply for benefits.

What are the types of identity theft?

Identity theft happens in different forms. In some cases, your credit card or bank details may be used to make purchases or incur credit card debt, while other identity scams may involve your entire identity being taken over and used to apply for benefits, loans or even employment. Here are the most common types of identity theft:

  • Phishing scams. These are the most common, and evidently most dangerous. Criminals usually impersonate bank officials and trick you into giving them your credit card information so that they can ‘confirm’ your identity or unblock a stolen card, or they can send emails purporting to be your bank or credit card provider and trick you into giving up your PIN, card number or other details such as your account login details.
  • Social networking. Criminals can access your personal and work information from social networks and use those details to create a fake identity that can later be used in financial fraud i.e. register a car in your name, apply for employment or credit.
  • Rubbish shifting. Throwing away bills, bank statement and mail can expose you to identity theft, as criminals can easily obtain useful information about your bank account or credit card.
  • Theft. Financial criminals are always looking to steal your details from your mobile phone, wallet or mail box, so be sure to secure all such belongings.
  • Other online scams. Unfortunately, criminals always come up with new ingenious scams to get your information for purposes of committing fraud. Fake job ads, online sales and social site scams are among the ways that can be used to get your personal details and credit card or bank information.

What are the effects of having your identity stolen?

Other than plunging you into serious debt, identity theft can ruin your credit score and impact negatively on how lenders look at you. Most financial criminals will look to run up as much debt as possible by applying for multiple credit cards and loans in your name. This could result in you having a bad credit history which will be reflected in your credit file for many years. It’s important to always pay attention to your accounts, so you can tell your financial institution when something is suspicious. By telling your bank first, you can avoid this from happening.

Identity theft may result in you incurring many fictitious bills, credit card repayments and other debts which will be reflected as defaults in your credit file, ensuring that credit providers shy away from giving you credit for up to seven years. In other instances where your name, address and contact details are used in fraud, you may get multiple clearout listings in your credit report.

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

Anyone can be a victim of fraud, so it is important to know what to look for and how to respond once you find out you are a victim. Usually, getting bills you have not incurred or finding unauthorised entries in your bank statement or credit card report can be clear giveaways that someone has access to your financial details. Here is what you should do if you are a victim of identity theft:

  • 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.
  • File a police report. This will allow investigations on the fraud to begin and give you access to a police report that you will 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 i.e. passport, Medicare card, birth certificate etc.
  • 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.

How to protect your identity

In today’s day and age, it has become more important to protect your financial and personal information and be on the lookout for online scams and other forms of identity fraud. Here are a few tips on how to protect your identity and avoid being a victim of identity theft:

  • Keep all your bills, financial papers and other documents with your information safely locked away, or shred them before disposing them.
  • Never use unsecured internet access points such as public WiFI connections or public computers to access your bank account.
  • Be careful while making online payments. Never make payments on unsecured websites.
  • Review your credit history and bank statements regularly and report any unauthorised withdrawals, purchases or credit applications to your bank immediately.
  • Secure your computer and mobile phone with passwords and log out of banking websites and social media websites each time.
  • Never give out personal information to people you don’t know.

Frequently asked questions about identity theft

  • How can I tell that I am a victim?If you have recently lost important documents such as your credit cards, passport or bank statements, you may be at risk of identity fraud. Suspicious receipts, bills or entries on your account statement that you do not recognise may be red flags that you are already a victim of fraud.
  • Will I be responsible for any fraudulent transactions?If you inform your bank about the fraud and file a police report, you will not be responsible for paying any debt incurred from identity theft, unless the bank determines that you acted negligently leading to the fraud.

Shirley Liu

Shirley is's publisher for banking and investments. She is currently studying a Masters in Commerce (Finance) and is the author of hundreds of articles. She is passionate about helping Aussies make an informed decision, save money and find the best deal for their needs.

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