Tag: "cyber isnurance"

Identity Theft – What Is It?

Someone who is a victim of identity theft is someone who has had their identity stolen in some way, and the criminal has used that identity to fraudulently obtain some type of benefit, such as a bank loan, credit card or other financial gain in the name of the person whose identity they have stolen.

Identity theft is widespread, although the scale of it is difficult to assess financially as a lot of banks and financial institutions do not like to advertise the fact that they had been misled and had money stolen from them.

The risks of identity theft are well  known, and there is a lots of good advice available about how to try and prevent identity theft, and there is some insurance protection available in the event that someone’s identity has been stolen, although the help that is offered is in reality fairly minimal.

Risk of Identity Theft

The crime of identity theft  occurs when a criminal is able to obtain unique information about an individual, and then use that information to clone their identity. This cloned identity then becomes liable for a wide range of financial fraud, perpetrated by the criminal in the name of the individual’s identity that has been stolen.

In order to steal an identity, it is generally accepted that there are a number of specific pieces of information that someone needs.

These normally relate to areas of information that are unique to that individual, and cannot apply to anyone else, such as their date of birth, their social security number or national insurance number, passport etc.

In reality, a criminal will try and obtain as much information about that individual as possible, in order to build up a picture that can be used to effectively represent them in a fraudulent manner.

Preventing Identity Theft

There is no sure way to prevent identity theft, but there are certain things you can do to make it more difficult.

Perhaps the most important is to make sure that all information that is unique to you as an individual regarding tax and social security, pension benefits, medical benefits etc is sent to you by regular post rather than email.

This may seem fairly basic but the is in truth probably the most practical way of preventing unique information falling into the hands of criminal.

The other things that you can do are to monitor things such as bank accounts, credit cards etc, to see any unusual activity.

This can also apply to any strange letters or visits or phone calls  that might seem to imply unusual activity regarding your finances.

Any warning sign that your credit is being altered in some way that seems to you unlikely should alert you to the possibility of some type of identity theft or identity theft tampering.

Dealing With Identity Theft

If you discover that your identity has been stolen, there are a number of steps that you should immediately following. Firstly is to notify your bank or credit card company you believe your identity has been stolen, and ask for their assistance in helping to resolve it.

Make sure that they are willing to work with you to sort out the issue without penalising you by way of freezing  your account or anything similar.

Make sure you register the identity theft online, there is normally a government backed websites available, that is either a government site or a law enforcement site that allows you to lock the fact that you have had your identity stolen, and should be able to provide some assistance in terms of helping to recover it.

If your stolen identity has been used to fraudulently obtain a loan or a credit card, make sure you collect all the information you can about it before it is completely disabled and shut down to  help track and trace the initial fraud.

Identity Theft Insurance

Some type of identity theft insurance is normally offered  by way of a rider or endorsement to a home or homeowners or renters insurance policy. The cover it gives normally focuses on some type of financial assistance for help with attorney/lawyers fees, assistance with credit monitoring, acting as a liaison with banks, insurance companies to try and resolve ongoing fraud issues etc.

Whilst this help can be of some value, the real help that is needed with virtually types of identity fraud is unravelling fraud that has taken place, and getting banks and financial institutions to believe that it has actually happened in the first place.

There is a lot of anecdotal evidence that implies that banks tend to want the individual to prove their identity has been stolen to an exacting degree before they are willing to consider the possibility that fraud has taken place.

Proving identity theft  has taken place can be quite difficult, especially where it is the sort of crime where you are up against a number of institutions that initially may well not believe you at all. This is an area where some type of identity theft insurance would be really invaluable, but unfortunately most current insurance policies do not really provide much value in this area.

Identity Theft and Cyber Insurance

Whilst the scale of identity theft is hard to assess, what is fairly clear is that the growth of cybercrime and cyber security means that the amount of identity theft and fraud is bound to increase fairly substantially over the next few years.

It is becoming easier and easier to know more and more about people, whether they want you to or not.

Some of this is around information gathered from social networks, and what people post online about themselves, privately and professionally. The growth of the Internet of things, and of big data, means that the amount of information available are people, with or without their knowledge, is going to explode into a level that is almost incomprehensible at todays levels of knowledge.

Sometimes this information is gathered through hacking into corporations websites where personal data such as credit card etc has been stolen.

Current cyber insurance policies are mainly aimed at businesses and organisations, and the insurance companies that offer best practice seem to include some type of incident management team, that includes lawyers, IT specialists, reputational management specialists etc.

The insurance policy is designed for a team to come in and take over the running of dealing with the cyber attack, both negotiating a successful outcome and restoring integrity of the system as well.

It is likely that as the rate of identity theft grows, insurance companies will need to provide some type of incident management team for individuals as well, either as part of an existing insurance policy, or as an add-on to some type of specialist cyber insurance policy.