However, despite the apparent boom in identity theft crime, less than a handful of cases have been followed up by police action. From the cases recorded at the National Identity Theft Assistance Centre, only one has been pursued to the point of prosecution, and none has ever reached the courts. Losses reported from more common credit card fraud and card thefts are much bigger than from identity theft. So, is it as big a threat as it would seem, or is it just another example of media hysteria?
The hype surrounding the growth of identity theft has caused an explosion in the availability of protection products in the UK. Some credit card companies provide help services as a free part of their care package, while others have been quick to exploit the commercial benefit of selling subscriptions to various products that offer protection. Typically these are sold as opt-ins on application forms or by outbound telemarketing, with companies charging as much as £84 per annum for identity theft insurance, advice and credit file monitoring.
However, there are easier and more economic ways of protecting yourself against identity theft, which isn’t a big a problem as the media would have you believe. In the US consumers regularly check their credit reports as they are aware that this is where you would see the first indication of any identity theft activity. Every credit application leaves a search footprint and most loans and cards are reported, providing an audit trail for a consumer to spot anything unusual against their name. This practice is now catching on the UK where in 1974 the Consumer Credit Act gave everyone the right to obtain a copy of their credit report by sending £1 to a credit reference agency. In 2007, this sum has now risen to £2 and last year, over 1.8 million people applied in writing to one of the three UK credit reference agencies for their credit file, with most receiving a paper based report within 7 working days.
With the advent of the internet, online credit file reporting is on the increase. The benefits of online presentation of data over paper files are numerous. Online credit reports are delivered more quickly; leave a better audit trail; are more secure; can be stored and compared more easily. Moreover, information can be presented to the consumer with appropriate and consistent explanatory messages alongside each element of the report. So any consumer who finds errors on their credit file will find it easier to correct them and help improve the overall data quality of their records. The more accurate their records the better the consistency of lending decisions for credit.
But, the real benefit for all of us is that by regularly checking our own credit files, not only can we correct erroneous information against our name, we will be quickly alerted to any attempt of identity fraud. That is certainly a more pro-active and cheaper alternative to expensive protection offered by many credit card companies. Plus, if we all regularly checked our own credit files all the horror stories about identity theft would be just that – stories.