Earlier this year Experian India released the "Fraud Report 2016", in which it covered the fraud related trends in the finance and banking industry. Mohan Jayaraman, Managing Director of Experian India, mentioned in the report that identity theft accounted for 77 per cent of fraud cases in the first quarter of 2015. Personal loans, mortgage loans, credit cards, and consumer loans have experienced majority of these fraudulent activities. Thus, it goes without saying that time has come we started taking Identity Theft seriously.
Credit score models were introduced because lenders felt there was a need to study every borrower’s debt related past. Since then it has become easier for lenders to classify them into risk pockets and price them accordingly. Most people don’t even know that their actions are being tracked, recorded and rated. This ignorance costs them when they set out to seek credit in future. Let us take a look at a few cases where people did not repay their debts on time and what happened thereafter.
What is Identity Theft Really?
Identity theft is a scam, a fraud, which can take place in any form. Here are some of the most common types of IT (Identity Theft) scams:
- Tax Returns: In this the culprit uses your personal information to file a tax return and gets your tax refund.
- Nigerian 419 Scams: It is quite surprising that Nigerian 419 Scams are still common in India, despite being one of the oldest. In this scam a fraudster sends an email to someone asking them to provide their personal information, and deposit a certain amount to receive a much higher amount in return. These fraudsters generally carry out the activity on the pretext that they want to leave a certain heritage to someone. Sometimes they claim that the target person has won a lottery, the prize of which can only be claimed after depositing a certain fee. The scam is called Nigerian 419 fraud for the relevant section of the Nigerian Criminal Code).
- Phishing: Another common method for scamming innocent people that is prevalent even today is phishing. In this the fraudster sends you an email that carries a link to a fake banking website that looks identical to the actual banking website. Generally a state of urgency is created by falsely informing you that your account is at risk, and to protect it you have to enter the account information on the website. The fraudster then steals the information provided by you and use it for personal monetary gains.
There is a need of creating awareness among the people, as the rise of digitization and dependence on Internet has made it easier for identity thieves to carry out their illicit activities. Here are some good ways to protect yourself from identity thefts:
- Avoid Shoulder Surfing: When you use your debit card at an ATM or at a store, then make sure that you cover the keypad of the machine/device as you enter your pin. Fraudsters often do shoulder surfing, which means they look over your shoulder to memorize your ATM/debit card's PIN, and then use it for making unauthorized purchases.
- Take Care of Your Documents: Even a photo copy of an important identity document such as your driver's license, passport, or voter ID card, is enough for an identity thief to commit a fraud. They can use the information to carry out illegal activities by impersonating you. Thus, when you share your documents with someone stay careful. Be sure that when you get a Xerox of a certain document at a shop, they don't save a copy for themselves.
- Information Shared on The Internet: A number of frauds are committed due to information provided on the Internet. If you use a desktop or laptop make sure that you have installed a good anti-virus program on the system. Never share your banking information or other crucial identity related information through an email or a link. If you are doubtful you can call up your bank and inquire about a suspicious email or sms.
- Discard Document Photocopies Properly: Dumpster diving is another method of stealing identities which is quite common. In this the fraudster steals your personal information through receipts or a document's Xerox copy that has been thrown away by you in a trash. To avoid becoming a victim through this make sure you destroy such documents and papers properly. It is better if you can shred them before discarding.
It is important that you take all measures to protect yourself from an Identity Theft. Otherwise you could end up losing a fortune. However, the only way to protect yourself is to be careful. By using the tips mentioned above you can safeguard your identity to a great extent.
Becoming a victim of Identity theft can leave one with impaired credit score and opting for loans for bad credit