What is identity theft and can legal insurance help?

It’s been estimated that up to one in three Britons will become a victim of identity theft at some point in their lives.protect yourself from identity theft

Identity theft (or ID theft or fraud as it’s also commonly known) occurs when someone acting without your consent and knowledge uses information regarding your personal identification for illegal purposes.

The results can be devastating, but if you have Legal Assistance Cover you at least know you can afford to access the right legal help to correct the situation and get back what you may have lost.

ID theft for ‘illicit financial gain’

Identity theft usually involves what is often termed ‘illicit financial gain’ whereby someone attempts to gain financially by illegally using the personal details they have acquired from you.

Personal information relating to your ‘identity’ comes in many different forms; from your full name and home address, to bank account details, credit card numbers and passport.

Personal identification information is most commonly provided when you pay for goods and services and such transactions can also include crucially important passwords and pin numbers, as well as account numbers and sort codes.

From opening bank accounts to swiping cards

Contrary to popular belief, an identity thief actually needs a fair amount of personal information to open bank accounts in your name or take out loans. An envelope with your name and address on it and a copy of your payslip won’t do it. Yet, it’s certainly not unknown and has happened to plenty of people.

More common is having credit card details or PIN copied, your debit card swiped and online security numbers hacked. These are simpler crimes to commit and therefore happen more often.

Identity theft only takes minutes…

In a matter of minutes thousands of pounds can be withdrawn from your account, or spent in your name.

And the results can be devastating; leaving people struggling to prove it wasn’t them who actually bought expensive items or transferred cash to other accounts. Indeed, loan companies have been known to chase the victims of identity theft for payment, or even take them to court.

If you have a county court judgement made against you, it becomes very hard to gain credit, such as for a mortgage, and in some instances people have even lost their jobs.

Many people fail to shred

The problem is compounded by the fact that many people fail to shred or destroy documents which clearly show personal details and financial information such as that seen on bank statements and invoices.

A recent survey by John Lewis Insurance showed that as many as one in six don’t make any attempt to permanently erase such information from physical hard copies of documents.

Additionally, passwords and secret codes are far too often simply someone’s birth date, and you’d be amazed how many people use 2468, or similar simple number progressions.

How cover can help

This is where Legal insurance can come in handy. It offers the potential for help and assistance to those who are victims of identity theft and provides the legal representation you may need to get money back, prove you’re in the right and restore your credit status, and even to clear your name.

How to buy cover

Such cover can be bought from specialist providers as a stand-alone policy, but the cheapest way to buy it is usually as an ‘add on’ to your home cover.

A few home insurance policies offer legal cover as standard, and a number specifically include identity theft. If it’s not specifically stated, the chances are you’ll be covered for the legal ramifications, but double check with your insurer if you’re worried about whether you will be or not.

However, many standard policies don’t offer it, and you would have to pay a little more on your premiums to have it added.

Typically, such cover would cover between £50,000 and £100,000 in legal costs (or much more for the very best and more expensive policies).

What it doesn’t cover

You should be very much aware that legal insurance won’t compensate you for any financial loss you incur due to ID theft.

It’s there more to provide the financial support you may need to fight your corner, prove you’re case, if necessary in court, and reverse any losses you’ve suffered.

Policy Expert

We’re here to help our customers to compare insurance products and find a policy that’s right for them. Customer care is at the heart of everything we do and we have a dedicated customer service team on hand by phone, email, twitter and instant chat. For more information speak to one of our experts on 0203 014 9300 or email ask@policyexpert.co.uk

About James

James is a journalist and digital editor with over 13 years’ experience writing and editing for media and finance businesses. He specialises in personal finance and economics, but also covers property, travel and news.

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