/ 22 April 2008

Identity-theft fraud on the rise

Fraud related to identity theft cost South African businesses R276-million in the first three months of 2008, said Alexander Forbes Insurance on Tuesday.

Alexander Forbes Insurance managing director Gari Dombo said this was a ”substantial increase” on the 2007 figures released by the South African Fraud Prevention Services.

He said credit-card fraud made up the bulk of the crimes classified as identity theft.

”While actually having your identity stolen is less likely than having your credit card nicked, the one tends to lead to the other,” said Dombo.

He said the identity-theft fraud chain usually began with the theft of documents like a credit card, driver’s licence, passport or ID book.

Criminals could use the information from these documents to register new credit or bank cards and run up debt in your name.

”They can take out loans, apply for new passports or identity documents, rent an apartment or open a telephone account.

”[They] could even give your name to the police if they are arrested. If released on bail, any future arrest warrants would also be in your name.”

Dombo said often people only discovered quite late that they were victims of this fraud.

He said anyone who suspected they might be a victim of fraud should contact their banks immediately.

”[This] is only the beginning of an often long and expensive process of reclaiming your identity, clearing your name and restoring you credit-worthiness,” said Dombo.

He said people could minimise the risk of this kind of theft by not carrying extra credit cards and by cancelling any accounts not used.

People should also regularly check credit reports and bank statements. Papers with sensitive financial information should be shredded not thrown away.

”Considering the very real costs, identity-theft insurance, like third -arty liability, is likely to become an essential insurance purchase,” said Dombo. — Sapa