Identity theft occurs when someone uses another person’s identifying information, like their name, identity number or credit card number, without their permission, to commit fraud or other crimes.
The unfortunate truth about identity theft is that it’s not all that hard to pull off. Many of us seem to be under the impression that it’s only the reckless, the uninformed, the naïve or the trusting that fall victim to the cunning traps of identity thieves. However, anybody can become a victim!
Identity theft in South Africa is hard to determine. It is estimated that it costs the economy around R1 billion each year with new techniques and scams popping up weekly. As technology evolves, so do the opportunities for thieves to get hold of your personal information and with more people transacting electronically one needs to be ever vigilant.
Via the internet - the most common forms of identity theft today is ‘phishing’ - this is an attempt to acquire sensitive information such as usernames, passwords and credit card details, often for malicious reasons, by masquerading as a trustworthy entity in an electronic communication.
While in the past identity thieves were mostly interested in stealing credit cards, maxing them out and discarding them – today’s identity thieves are far more ambitious, often using stolen identities to obtain cell phones on contract, rented cars, store credit and even personal and home loans. What’s worse is that most of the time you will not realize that your identity has been used to ring up a string of credit until you are declined from opening an account or are contacted for defaulting on a payment. The end result is an utterly destroyed credit record which may take months or even years to rectify.
There are many types of identity theft that can be prevented.
TIPS TO AVOID BECOMING A VICTIM of ID THEFT and ID FRAUD
- Shred all documents that contain your personal information and do not throw anything away that someone else could use to impersonate you. Do not throw anything away into your garbage bin! ‘Bin pickers’ are known to go through your rubbish looking for items with your name, your address, ID numbers, bank account numbers, etc., anything they can use to steal your identity from you!
- Be attentive at ATM’s and ensure that no-one is attempting to gain access to your pin number.
- Strong passwords - Make sure that the passwords for allyour accounts are not easy to decipher; use online services such as LastPass.com or Passcreator.com to generate passwords for you.
- Never respond to an e-mail or sms that asks you to insert or update your personal and banking information by clicking on a website link provided in the content of the message.
Rather copy and paste the link into your internet browser, as this will enable you to determine whether you are accessing an authentic website, or not.
- If you receive a call from an unknown individual who requests personal information, rather offer to call them back to verify that the number they have given you in fact belongs to the correct company.
Also, ask them to give you the personal information that they need to confirm, instead of providing the details yourself.
- Social media sites - make use of privacy settings. Be very selective with the type of information that you share.
- Identification documentation such as your passport or identity book - only carry when it’s absolutely necessary and keep these documents safely locked away when not in use.
- Do not get taken in by scammers who send messages telling you that you have won a prize, or inherited money.
IF YOU SUSPECT IDENTITY THEFT
- Contact the Police
Unfortunately, arrests in purse-snatchings are rare, unless a thief tries to use one of your cards in a local store. But you may need the police report to avoid being held liable for fraudulent charges.
- Alert Your Bank
If your purse or wallet contained your ATM card or cheque book, you need to contact your bank right away to cancel your accounts.
- Notify the Motor Licencing Department
You will need to get your driver's license replaced
Find out what you need to do to ensure that you won't pay the consequences if someone else gets pulled over with your stolen license.
- Cancel any Debit or Credit Cards
Report the incident before the card is used. This will relieve you of responsibility for any unauthorized transfers.
- Contact the Credit Bureaus
Put a "fraud alert" on your files. You will then be contacted whenever someone tries to open credit in your name.
- Go Beyond the Obvious
Think about what else is in your wallet that thieves may be able to use. What about your insurance card?
Believe it or not, some scammers try to use other people's insurance coverage - this is known as medical identity theft.
If thieves have access to your phone number, they can run up charges on your cell phone or even open another account in your name.
- Monitor Your Situation
Keep watching your credit reports. You're allowed one free report per year from credit bureaus.
It might be worth paying the monthly fee for a credit monitoring service.
- One Final Tip
Preventative measures can help you save time if this happens to you.
Make a photocopy of all credits cards and other contents of your wallet.
Only carry what you absolutely need.
Never keep your ID card in your wallet.
Protect your identity - regularly check the accuracy of personal documents and promptly deal with any discrepancies.
Your credit report is a complete record of your financial history, detailing information on your borrowing and spending habits, payment trends and contact details. It tracks every account you open, every payment you skip, every judgment taken against you and every cent you owe your creditors. Other than following the guidelines mentioned above and remaining vigilant at all times, regularly checking your credit report allows you to immediately identify if someone attempted to apply for credit in your name. You can also identify any enquiries conducted and see who accessed your credit report and when – this can be very useful in predicting and preventing possible fraud.
YOUR BEST SELF DEFENCE AGAINST IDENTITY THEFT IS YOUR CREDIT REPORT
To ensure that you do not fall victim to identity theft make sure that you regularly check your credit report – you can do this once a year for free.
Check your credit report - make sure you thoroughly scrutinize every aspect.
Your credit history - lists every creditor that you have credit with.
Listed information includes
– the creditors name, date when the account was opened, the repayment frequency, your outstanding balance, your credit limit and whether you skipped or missed a payment.
- Also listed are details of all enquiries that were made against your name. This means you will be able to see who has looked at your credit report and when.
- Credit enquiries usually take place when you apply for credit with a credit provider determine your creditworthiness.
Very important - check that no enquiries were made that you were not aware of - this could be a sure indication that someone is trying to fraudulently apply for credit in your name!
Public records information is also a very important.
This contains information on judgments, defaults and notices and is an indication of whether legal action has been taken against you for non-payment of credit.
If you suspect that you are a victim of identity fraud - immediately contact the credit bureau that supplied the information and lodge a dispute.
You can do this online at most established credit bureaus by filling out a form.
The National Credit Act (NCA) provides consumers with the right to dispute incorrect information on their credit report and to have this information corrected.
If you are not happy with the outcome you can contact the Credit Information Ombud.
THE FIVE C’s OF CREDIT
Banks and other lenders evaluate a potential borrower when making a lending decision.
- Character is the personal and business reputation of the borrower, referred to your Credit History.
- Capacity refers to the means in which the borrower will repay the debt.
Business loans - the lender wants to know if the business will generate enough cash to both fund ongoing operations as well as pay back the loan.
Personal loans - the borrower needs to earn enough income to pay back the loan.
- Capital refers to how much risk the borrower is willing to take with regard to the loan. The lender will look at how much money the borrower put into the business.
The lender won’t loan the money if the borrower isn’t willing to take much risk themselves.
- Collateral is the property used to secure the loan. Typically, it has a value equal to or even greater than the value of the loan. Lenders seize collateral to repay the loan should the borrower default.
- Conditions refer to the financial conditions at the time of the loan, detailing the prevailing interest rate, principal amount and general market conditions.
CONTACTS TO ASSIST IN AVOIDING IDENTITY THEFT:
The Southern African Fraud Prevention Service (SAFPS) combats fraud across the financial services industry, providing a shared database to member organisations and offering the South African public a means of protecting themselves against impersonation and identity theft.
Report suspected fraud.
Register your lost or stolen identity books and passports today!
Protect your business.
Safeguard your identity and register • www.safps.org.za • Tel: +27(0)11 867 2234 • Helpline: 086 010 1248 • firstname.lastname@example.org
Credit Bureaus and to apply for a free credit report:
There are many credit bureaus in South Africa. The three most used Credit Providers, when assessing your application for credit, are:
Additional article references: www.investopedia.com; www.Wikipedia.org