How To Protect Yourself From Identity Theft
In the wake of the latest data protection disaster, here's how you can protect your identity and your finances.
Yesterday, chancellor Alistair Darling told a shocked House of Commons that the personal details of all families in the UK with a child under 16 had gone missing.
The Child Benefit data was stored on two password-protected computer CDs and ended up `lost in the post' while being sent by HM Revenue and Customs (HMRC), via courier, to the National Audit Office.
The data includes the names, addresses, dates of birth, National Insurance numbers and, where relevant, the bank details of some 25 million people.
A recent Canvasse Opinion Survey by credit analysts Experian revealed that 32 per cent of us believe the Government cannot be relied on to safeguard the data that can be used to impersonate us and obtain money in our names.
It seems these suspicions are justified. Even in the current climate of fear surrounding the adequacy of data protection measures, this latest breach of public trust was on an "unprecedented" scale, according to Information Commissioner Richard Thomas.
HMRC chairman Paul Gray fell on his sword and resigned as soon as the catastrophe came to light. However, this will not serve to reassure the millions of Britons - almost half the population - who are now vulnerable to identity fraud if those two discs fall into the wrong hands.
If you think you may be affected, what can you do to guard against fraud?
Protect Yourself
Mr Darling yesterday urged those affected to monitor their bank accounts for "unusual activity". While this is sound (if obvious) advice, there's plenty more you can you do to protect your ID if your personal data has been lost.
Experian has highlighted several steps you can take to safeguard your identity and your finances. If you think you could be at risk, take this action as soon as possible.
1. Check your bank statements carefully. If you spot any transactions that aren't yours, let your bank know as soon as possible and explain the circumstances.
2. Examine your credit report. This lists all your credit commitments and recent applications for credit, so you can instantly see if someone has been trying to use your ID and put a stop to problems before they can develop. You can buy your credit report for £2 a time, or you can view it free for 30 days when you sign up for a trial of CreditExpert via The Fool.
3. Don't put yourself at risk of social networking fraud. As my colleague Szu Ping Chan recently explained in her article How To Avoid Facebook Fraud, people give away all sort of information on sites such as Facebook and MySpace which could be of use to fraudsters. This includes passwords and key dates that could allow them to gain access to your bank and card accounts. Edit out the names of pets, mother's maiden name, where you went to school and anything else you might use as a password or PIN.
4. Watch out for hoax calls, letters or e-mails. In the wake of the latest data debacle, criminals may call, e-mail or write to you pretending to be official organisations and requesting further information in order to `protect you'. They hope, of course, to rip you off more thoroughly - so don't give away information to people you do not know.
5. Make sure your bank and credit card account passwords don't relate to the data that could be compromised. Many of us tend to use details such as children's names as passwords to protect our bank and credit card accounts. Fraudsters are likely to make a good guess at such passwords - so make sure you update them on a regular basis and use unique words that do not relate to data that could be compromised in a data breach.
More: How To Beat Rising Fraud | Identity Fraud: The Facts> Get your free credit report now.