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Rising levels of identity theft leaves consumers financially vulnerable

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Escalating levels of identity theft in the country cost individuals and businesses more than R1 billion a year, according to the South Africa Fraud Prevention Association – a body leading banks and financial institutions use to share information on fraudsters and their methods. While it may not always be possible to prevent identity theft from taking place, consumers can mitigate their risks by remaining vigilant when they are requested to reveal their personal information to a third party.
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Escalating levels of identity theft in the country cost individuals and businesses more than R1 billion a year, according to the South Africa Fraud Prevention Association – a body leading banks and financial institutions use to share information on fraudsters and their methods. While it may not always be possible to prevent identity theft from taking place, consumers can mitigate their risks by remaining vigilant when they are requested to reveal their personal information to a third party.
 
This is according to Christelle Fourie, Chief Executive Officer at MUA Insurance Acceptances, who says that it is important that South Africans take the necessary steps to ensure that they are financially protected against any losses suffered as a result of their identity being used unlawfully by another party.  
 
Fourie explains that while there are various measures put in place by banks and other industry stakeholders to protect consumers against identity fraud, it is also important for consumers to have proper insurance cover in place to protect themselves against the financial risk of having their identity stolen resulting from fraudulent activity.
 
She says that cybercrime and online identity theft is increasing globally and it seems to be the newest form of ‘White Collar’ crime. “Online fraud scams are also on the rise in South Africa, with criminals stealing consumers’ identities in an effort to create a fake identification profile to conduct fraudulent activity under a false name. This includes fraudsters opening fake businesses used for illegal activities in the name of an unsuspecting consumer.”
 
Local authorities have also reported that fraudsters are also using stolen identities to up fake bank accounts in order to run up massive amounts of debt. Should this happen, consumers could be left with a bad credit record that could prevent them from accessing any further credit.
 
According to Fourie, identity insurance cover will generally cover the insured for legal defence costs incurred in proving liability against unauthorised third party use of personal information, costs incurred in removing any wrongful civil and criminal judgement against the insured and income lost due to resolving identity theft matters.
 
She says that it is also important that consumers are aware of the fact that the personal liability section of a certain personal insurance policies offerred in the SA market also helps to protect individuals. “This type of cover will protect the consumer in the event of becoming liable as a result of a third party unlawfully using the insurer’s personal information, which could include the use of identity books, passports, drivers licences, bank details and municipal account.
 
Whilst some personal insurance policies do include identity theft cover automatically, Fourie advises consumers speak to their insurance provider to enquire whether such cover exists in their current policy and to what extent the consumer is covered. “While you may have some level of protection in your insurance cover, not all policies are the same and you may be exposed to additional financial risk if you do not have adequate cover in place.”
 
“It is still advisable for consumers to protect themselves to avoid falling victim to identity theft by putting preventative measures in place such as having a limit on their bank account, keeping important document in a safe place, shredding old documents, changing passwords regularly and to not display personal information on social networks,” adds Fourie. 
 
She says that in addition to this, it is also worthwhile registering with the credit bureaus such as TransUnion with their notification services. “These services will be able to notify you via SMS of any instance whereby a credit/ITC enquiry is made against your bank account.  This will allow you to immediately known if an unauthorised person is trying to use your identity to open up a fraudulent account, as the majority of new business accounts require an ITC check to be performed against your name. Once you become aware of such activity it is vital that you inform your bank, the authorities as well as your insurers.”
 
To help mitigate the risk of identity theft, consumers are also encouraged to utilise online services that help track and monitor any suspicious activity that could potentially be linked to identity theft. Fourie says that there are a number of services available that are able to do this by providing you with real-time alerts for any occasion when someone posing as you may be trying to change your personal details with any financial institution.
 
In an effort to combat identity theft and fraud, the Department of Home Affairs have also introduced smart identity cards during the past year which uses modern biometric technology to record a wide range of personal details on a memory chip. The information stored on the new smart identity cards includes a person’s marriage licence, drivers’ license and personal identification.
 

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