It is unlikely that fraud will ever completely disappear. Once you shut off one avenue, the fraudsters look for the next easy opportunity. But the good news is that you can reduce the risk by taking preventative steps that are well documented. As for a world without credit; highly unlikely I think!
Why UK consumers should use credit reports more often?
by Nick Jones
17/11/10 in Fraud | Identity Fraud/Theft |
We all know about identity fraud and the various ways this can happen, but what about the tools to fight identity fraud?
Well, there are industry measures in place to stop people’s identities being used fraudulently like the work of the Dedicated Cheque and Plastic Crime Unit and CIFAS, the Fraud Intelligence Sharing System and the banks use of intelligent fraud-detection systems, but we all know that consumer responsibility is also critical in prevention of this growing crime.
One of the ways consumers can take responsibility is through proper management of their credit report, which is widely recognised as a valuable prevention weapon in the fight against identity fraud.
In the UK however, we seem to have a bit of a problem in using this useful monitoring tool. Recently CPP Group Plc (CPP), questioned over 2,000 UK adults and we found some interesting, if not alarming, statistics.
The first point of reference was that almost 900,000 adults had their credit rating damaged by identity fraudsters, and that it took on average just over 400 days to nurse a credit file back to full health, with 50% of adults not getting the problem corrected or having no idea if their credit status is back on track.
Secondly, and perhaps more worryingly given some of the latest identity fraud statistics published by the National Fraud Authority that 1.8 million people are adversely affected by identity fraud every year, is that only 4% of us bother to check our credit reports on a monthly basis as recommended by experts, and half of people admit they have never checked their credit report, ever. Four per cent of people said they didn’t even know what a credit report is.
Not surprisingly, the majority of people only found out they had a bad credit rating when it really mattered; when they applied for a mortgage, loan or credit card.
So, we have widespread ignorance in the UK about the use of credit reports and what they can do to protect consumers.
The inherent value of regularly checking your credit report is clear when you consider that Experian has said “victims of fraud typically only discover the fraud when they review their credit reports. In 2009, nearly three in five of victims discovered that their identity had been compromised by checking their credit report.” (Source: The Insight Report – Victims of Fraud survey – March 2010).
So, what are the consequences of having your credit rating wrecked by identity fraudsters?
• Well, nearly half of our survey said it cost them financially, with the monetary repercussions averaging over £7,000 enough to put many people in serious financial difficulty.
• Costs included individuals losing out on low interest credit cards and loans (48 %)
• 20% refused a mortgage
• 10% lost earnings
• Whilst, one in twenty (5%t) had to pay legal fees.
It’s not surprising, therefore, that a damaged credit status has an emotional impact with stress, strained personal relationships, sleepless nights and time taken off work quite common.
It’s also clear, despite huge media attention over the last five years, that consumer ignorance is playing a role in helping identity thieves go undetected. The vast majority of people still have no qualms supplying their personal data online, including names, dates of birth and addresses, where it is visible for all to see, and use.
With credit reports being such a useful prevention tool, we need to encourage more people to adopt a proactive stance to using them on a regular basis, in order protect their identities and ensure they are not a weak part of the protection chain.
Education to force a change in behaviour is what’s required to tackle this problem.
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NetGirlJenn 07/12/10
It is so sad to read that this is a worldwide problem. The fraud has gotten so out of control that I sometimes wonder if we could survive without credit at all.