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Identity Theft: A Case Study

By: Kevin Dowling BA (IMC) - Updated: 6 Apr 2017 | comments*Discuss
Identity Theft Fraud Crime Information

It is a type of crime that is increasingly affecting more and more people. The London Metropolitan police recently calculated that identity fraud cost almost £14 billion in 2008. This works out as an average cost of £230 for every person in the UK.

In this case study we look at how identify fraud has affected one person, and the steps she had to take to prevent having to pay for the cost of the theft herself.

What is Identity Theft?

Identity theft involves criminals using a variety of different methods in order to access your personal information and to use it to ‘steal’ your identity.

Once they have your personal details, the fraudsters can pretend to be you, and they can apply for benefits, obtain new credit cards, bank accounts and even mortgages under your name.

They can also take control of your existing accounts and change your details, running up thousands of pounds of debt in your name – debt that companies will be expecting you to repay.

Such an experience happened to 26 year old trainee accountant Kelia. Kelia never had any problems with her credit cards, and used to pay all of her monthly bills on time.

Kelia's Story

“I’ve always been quite responsible with money and although I do spend too much on credit cards, I make sure that I pay my bills and never let my debts get out of control” she says.

However, in June of 2007, Kelia started to receive statements from a credit card company that she did not owe money to. She recalls:” “The statement referred to an outstanding balance of £2,500, with a credit card company that I have never had an account with.

“I ignored the first letter as I thought it must have been a computer error. But when the next statement arrived a month later, and they were increasing the outstanding balance because I hadn’t made any repayments, and warning me about possible legal action, I decided to contact the credit card company to tell them I knew nothing about this card.”

Kelia made several calls to the credit card issuing company, and was told by one of the company’s advisers that the details of her account would be passed on to their fraud department, and that no further action would be taken against her.

Threatening Letters

Unfortunately, that was not the end of the story. In February 2008, Kelia got a letter from a debt collection agency, requesting she make an immediate payment of £3,200.

Kelia explains: “the letter was a formal demand for payment, and it said that if I did not pay the full amount in the next seven days, I would be issued with a County Court Judgement against me, and that bailiffs would have permission to take my property to recover the money. I was in a state of shock.”

Kelia got back in touch with the credit card company to find out why she was still being chased for this debt. The company explained that an error had been made.

How the Problem Escalated

When the fraud was reported, the credit card company should have closed the account while investigations were made by their fraud team. Instead, the account remained open, and after six monthly payments were not collected, the account was automatically referred to a debt collection agency.

“I was amazed that after the credit card firm told me the situation had been resolved it was actually getting worse. I looked on the Internet and found a website created by the government called identity-theft.org.uk. The advice on the site told me that I was not liable to repay this money, as it had been reported as identity fraud and there was no proof the debt was mine.

“I insisted the credit card company contacted the debt collection agency immediately to make sure they didn’t issue me with a CCJ. I also demanded that they write to me to confirm that I was not liable for the debt. I told them that I would be making an official complaint to the Financial Ombudsman Service if they didn’t do this. That seemed to do the trick.”

Resolution - at Last

Five working days later, Kelia, got a letter from the credit card company to say that the account had been dealt with my their fraud department and had been settled. Kelia then contacted the debt collection agency who confirmed that she would not be expected to repay the debt. Kelia was mightily relieved, although still concerned at how serious the situation become.

Kelia said: “with hindsight I was probably too trusting that the credit card company would resolve the situation. I should have got them to send me written confirmation that the credit card debt was no longer linked to me, and I should have then requested a copy of my credit score to make sure that it was not still on my credit history.

“I still don’t know how the thieves managed to set up a credit card in my name, but I am very careful now in case it happens again. I shred all my financial documents, rarely use my cards for Internet shopping and I always look over my shoulder when I’m withdrawing money from an ATM.”

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I have had an account with Bank of Scotland for a good number of years - from the late 80s, in fact.I never had a problem with this until now, and was always keeping up with direct debits, since I was working and earning enough to sustain those.They were the usual direct debits for household fuel and other expenditure, car insurance etc. I never had a problem until after I had suffered a heart attack, then a few weeks later, an error by a dentist caused me to have a major gastric bleed, because he didn't check any issues due to my being on Warfarin to stop my blood from clotting - a situation I had made him aware of because he was probing my mouth with a sharp pointed instrument. When I was in hospital, attached to a stand which was putting blood into me, I had done a search on my laptop, and discovered that the two antibiotics I was prescribed had a known reaction with Warfarin, and would have caused this gastric bleed.I am currently pursuing the dentist for compensation for the mental stress, and threat to my life due to his carelessness in not checking whether my existing medication would react to the antibiotics. Since then, I have been fragile, and unable to work.I was put on Employment and Support Allowance, and allocated to the support group.The money is slightly better than Jobseekers Allowance, however it does not support any kind of decent lifestyle.My benefit works out at under £120 per week.Given that I live on my own, I have to make economies somewhere.I put most of my bills on direct debit, so that I would not have to worry about them.I also had a very basic £100 authorised overdraft.This has worked for me for a couple of years, however recently things have been going awry.My benefit money comes in at completely the wrong time for the direct debits, resulting in my debits being unpaid with a charge of £10 for each unpaid debit.Since the beginning of this year, my charges have amounted to £100.I haven't gone any farther back than the beginning of this year.The most recent charges were £40 and £20 (one of the direct debits was for only£1.00 - yet they didn't pay it and still charged me £10 for the privilege). I spoke to my bank today, and a customer service adviser told me he would refund some of the charges, but not all of them.He gave me a a number for a money management team within the bank.The woman I spoke to had good English, but was almost unintelligible during some of the conversation.What she said to me has severely stressed me to the point that I am feeling chest pains, and am having breathing problems.She told me I would not be able to use my bank account any more, and would have to go to another bank - after the length of time I have banked with them, they just want to throw me away.I am at my wits' end now, and will have to set up direct debits with another bank.My present bank will obviously not give me a good credit rating, therefore I will encounter all the same
Arya Stark of Winter - 6-Apr-17 @ 11:11 PM
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