Use Old Credit Cards Or Risk Identity Theft

Not using that old credit card tucked away in the back of either your purse or wallet increases the chances of you falling victim to the UK’s fastest-growing crime, identity theft.

Most consumers in the UK are now aware of the consequences of being careless with personal information and financial details. Identity thieves assumes a genuine persons’ identity to raid bank accounts, obtain credit and run up debts, in some cases up to tens of thousands of pounds through purchases, for example.

The fear of personal details falling into the wrong hands has seen paper shredder manufacturers struggling cope with demand.

However, while many take care to shred any documents that contain personal details, many are unaware that they can also fall victim to fraud by failing to close old credit and charge card accounts.

According to the bank payments association, Apacs, last year saw 31.5 million consumers in the UK hold an average of 2.4 credit and/or charge cards. It is the one in three cards that are inactive that are putting cardholders at risk.

Those particularly at risk are ‘rate tarts’ – people who continually open new credit card accounts and swap accounts in order to take advantage of 0% interest deals, as they have more accounts open therefore increasing the odds of being targeted by an identity thief.

In a parliamentary report, Apacs said: “ In recent times we have seen an increase in multiple cardholding (around 10% of cardholders held four or more cards in 2001 compared to more than 20% in 2004).

“ Cardholders don’t take out new credit cards and discard others. Old cards, and the available credit, are commonly retained, although in most cases they then lie dormant. In some cases we have seen in the media, the cardholder has accumulated cards over many years. There is intense competition in the market, making cardholders much more likely to switch and to accumulate more cards.”

Being more pro-active when it comes to opening and checking statements and closing unused card accounts will go along way to providing the identity thief with less opportunity to illegally obtain credit.

Research carried out by Experian on behalf of the Royal Bank of Scotland revealed that a staggering 7.4million Britons fail to even open their bank statements.

Mel Mitchley, director of consumer credit reference agency Callcredit, added: “ Millions of people have stopped using a credit or store card without telling their lender, so the facility is still available, and a fraudster can quite easily use it to rack up debts in someone else’s name without fear of early detection.

“ People need to take care of their ID by checking their credit file and cancelling any unused credit facilities. They also need to shred personal documents including direct mail, before they throw it away.”

Alisdair Milton
13th July 2006

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