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What is Identity Fraud?

Compliance Knowledge Base | Fraud Awareness

Posted by: Morgan Rennie Published: Tue, 11 Sep 2018 Last Reviewed: Tue, 11 Sep 2018
What is Identity Fraud?

Identity fraud is the offence of stealing another individual's personal information with the intention to commit a fraudulent act, such as gaining access to financial accounts. Typically, identity fraud begins with identity theft, the act of stealing another individual's personal information to then commit the crime of fraud. However, identity fraud can occur without identity theft as an individual can be given someone's personal information but then use this information to commit fraud. To protect yourself and your organisation against identity fraud, you must be aware of how it can be committed and the subsequent penalties.

How to know when identity fraud has been committed:

Identity fraud has been on the rise in the UK due to more and more opportunities arising to allow fraudsters the opportunity to use the personal information of others for corrupt means. The Office of National Statistics recorded that from 2015-2016, 2.47 million bank and credit accounts in the UK were subject to identity fraud.

Cifas, a fraud prevention service based in the UK, recorded from their studies that there has been a 49% increase in identity fraud. This rise in identity fraud is staggering and it highlights that there needs to be an increased commitment to fraud prevention.

What is Identity Fraud?

Identityhawk have stated that identity theft is the initial stage leading to identity fraud, as it is the process of a fraudster gaining access to an individual's personal information, via theft. The rise in social media has allowed fraudsters easier access to committing identity theft, as social media encourages users to share their personal information across an online platform. Through social media, a fraudster can find out your age, name, birth date and address, which can sometimes be enough for them to attempt to hack a credit or bank account.

The information which an individual steals can allow them to open a new account in the victim's name - for example, a fraudster could simply use a stolen passport to do this. Therefore, any piece of personal information which you either lose or have stolen should be reported immediately. A fraudster can also hack existing accounts using their victim's pin or password to an account. This might be achieved through phishing, email scams and viruses that are able to infiltrate people's personal information stored on a computer or online.

Experian, a consumer credit reporting agency, has recommended that if you suspect that identity fraud has occurred, you should report this to Action Fraud. Action Fraud is the UK's national fraud and cybercrime reporting centre and can help a targeted individual to sort out the situation.

In July 2018 a woman named Susan Antrach from New Jersey, USA, was charged with 5 identity theft cases and 5 identity fraud cases. Taken together, these cases resulted in approximately 10 years of imprisonment. Antrach was charged due to the hacking of celebrity Selena Gomez's email, thus exposing that identity fraud and identity theft is not dealt with lightly.

What are the penalties for identity fraud?

The Fraud Act 2006 is the legislative force used in the UK to penalise fraudulent offences. The court responsible for establishing the penalties appropriate will have to consider a range of factors, one of which is whether an individual's identity has been used. This is the case with all identity fraud and it suggests that the penalty for identity fraud will be relatively high. The factors of harm and culpability are used to decide the extent of the penalty; therefore, penalties can be wide ranging. Penalties range from low level community service, to fines up to the equivalent of 150% of your weekly income, to the most serious penalty: imprisonment.

To identify when identity fraud has occurred within your own home or within an organisation, you need to be well trained regarding what to look out for.

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