Ali Hussain
Millions of families have been put on red alert against the risk of identity fraud after tax officials lost the personal details of 25m people.
Europe’s biggest loss of confidential information sparked a nationwide search for two computer disks containing the addresses, National Insurance numbers, bank account numbers, and sort codes, of families receiving child benefit.
There are fears the details, lost by Revenue & Customs, could be a goldmine if they fall into the hands of criminal gangs. Fraudsters could use the information to steal people’s identities, open bank accounts and take out loans or credit cards in their name.
Banks were quick to reassure their customers that there was no evidence that money had been lost. They added that the information is not enough in itself for an ID fraudster to access your bank account.
But it has prompted independent security advisers to urge families affected, as well as those who bank online, to tighten their security measures and keep a close eye on their bank accounts for suspicious transactions.
Vigilance may be required for many years as fraudsters are unlikely to use the information immediately. Even the children whose names are mentioned on the discs could be at risk in the future.
Helen Lord, fraud and regulatory compliance director at Experian, the credit-rating group, said: “The fraudsters will wait until they turn 18 and start applying for loans, credit cards, mobile-phone contracts and other credit products in their names.
“That could have a catastrophic effect on their ability to get on the housing ladder, rent a flat, obtain their first credit card, obtain a loan for their first car or open a bank account.”
Even before this bungle, identity fraud was a growing problem. Latest figures from Apacs, the UK payments authority, show credit-card ID theft to have increased by 24% since last year. It accounted for £18.7m of losses in the first half of this year and is one of the fastest-growing financial frauds in Britain today.
Online fraud is also increasing rapidly. It cost £155m in 2006, a 32% increase on the year before. But there are ways to combat the fraudsters.
Most banks and credit-card companies monitor your banking activities and will inform you if they suspect anything unusual – if you suddenly take out large sums, for example.
Some, such as Royal Bank of Scotland, offer a free fraud alert service which sends a message straight to your mobile phone if it spots a potentially dodgy transaction.
Equifax’s Identity Watch sends out e-mail alerts or mobile text messages within seven days of possible identity theft.
The credit-reference agency monitors loan and credit-card repayments for unusual activity. You will also receive one free Equifax credit report which includes details of loans and credit-card repayment histories going back six years.
You can apply direct to any of the credit-reference agencies – Experian, Equifax and Callcredit – to check your credit file. Each report costs £2.
Checkmyfile.com allows you to trawl through your reports from all three for £9.99 per month after a free 30 day trial.
(Minor edits to reflect current prices January 2012)