The consequences of identity fraud

Being a victim of crime can have a devastating impact on your life, in the long term as well as immediately afterwards. Crimes involving fraud can be particularly difficult to resolve, as victims may not even be aware a crime has been committed until long after the event. Below, we look at the consequences of identity fraud and what it means for the people targeted.

What is identity theft and fraud?

Identity theft is the process by which someone steals sensitive information, either personal or financial in nature, in order to assume your identity. Identity fraud is when a case of identity theft leads to fraudulent criminal activity. You can read more about the process of identity theft and the growth of fraudulent activity in our Identity Theft and Fraud Explained article.

You can also find details on the types of information fraudsters might target when attempting to steal your identity. Keeping well informed about how identity theft works can be an important way of protecting yourself and avoiding scams. However, even if you are vigilant you still may find yourself a victim of identity fraud.

What impact does identity fraud have?

The consequences of identity fraud will depend on the nature of the crime committed. If fraudsters gain direct access to your bank account or credit cards, they may leave you with no funds to pay for everyday living costs. In this story on fraud, an individual handed over both his cards and PIN code during a telephone phishing scam and subsequently struggled to pay for rent or food in the two weeks afterwards.

Other types of fraud may have a longer term impact, in one particularly severe case of identity fraud, an individual became liable for a total of £164,000 of debt after having his passport stolen. The passport was used to set up bogus companies, which then ran up debts with the German tax authorities. This kind of fraud will not have an immediate effect on the victim, but can have greater ramifications in the long term. Not only is the victim left with potential debts, but the amount of time and stress involved in trying to fix the problem can also be substantial.

In extreme cases a criminal may even commit non-financial crimes in someone else’s name, for which the victim then suffers the consequences. An individual in the United States spent nearly two decades attempting to clear his name after a criminal stole his identity and committed a series of crimes. This is an extreme example, but one that demonstrates just how serious identity theft and fraud can be.

Although it is certainly possible for victims to recoup stolen funds or clear their name, the emotional toll of identity theft can linger far longer than financial worries.

How does identity fraud affect your credit report?

Identity fraud can have a significant effect on your credit history. If a fraudster uses your existing credit or applies for new credit this could leave a footprint of debt or missed payments on your credit report. Even if the criminal applies for credit and is rejected this can still have a negative effect on your credit history as each application for credit is recorded.

Although it’s possible to correct this information, it can take a while to speak to the relevant parties and demonstrate that you have been the victim of crime. Even a temporary drop in the credit score lenders use to determine your creditworthiness could be problematic, especially if you are in the middle of opening a new account, buying a car or applying for a mortgage.

Steps to take after identity fraud

If you think you have been a victim of identity theft or notice fraudulent activity in your financial accounts, there are several steps you should take. Firstly, contact your bank and/or card issuer and inform them of what has happened, they can then review any unusual activity and cancel or freeze any stolen credit cards or compromised accounts.

You should also report the fraud via the Action Fraud website, they collate cases of fraud from across the country and their data helps authorities to investigate crimes involving fraud. You can also speak to them online or on the phone if you need advice on how to report fraud and what other organisations you should contact e.g. if your driving license was stolen you would need to contact the DVLA.

You should also obtain a copy of your credit report if you do not already have one and carefully check the information it contains for any unusual activity. Any incorrect information should be reported to the agency that provided the report, for example, if you purchase a report from Equifax you can contact our Online Helpline to raise a dispute.

In certain cases, the financial losses you suffer will be covered by your bank or credit card company, however, it depends on the particular circumstances of the crime. You can read more about potentially liability and the different scenarios on the Money Advice Service website.

If you are worried about the security of your personal data, your Equifax Credit Report & Score is free for the first 30 days then £14.95 monthly. It includes WebDetect, which alerts you if we find your personal data on websites used by fraudsters.


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