‘Our £130,000 bill from identity theft’

‘Our £130,000 bill from identity theft’

The result can be immediate financial loss and a negative credit rating, which can take months to resolve – even longer if it takes time for the fraud to be detected.

According to figures from Cifas, a British fraud database, 123,600 cases of identity fraud were reported in 2012, up from 77,500 in 2007. Identity fraud now accounts for more than half of all fraud in Britain. The National Fraud Authority, a government body, puts the annual cost of identity fraud at £3.3bn.

“The numbers aren’t huge but they are growing,” said Neil Munroe, external affairs director of credit agency Equifax.

“A clever fraudster can build up a very strong profile of you and it can reach the stage where the question is: who is the fraudster?”

Mr Richards, 47, has been chased by the German tax authorities, communicating though HM Revenue & Customs, since 2010, with the order for unpaid VAT initially dropped but then renewed.

“I’ve never had any business in Germany,” he said, “and it’s a desperate situation. I don’t know the German tax system or how to appeal and HMRC just seems to play postbox.”

Earlier this year Mr Richards faced a £34,000 court order after his passport – with a different photograph – was used to set up a communications company in the Isle of Man. The company was fined for breaching codes of practice and the order was delivered to Mr Richards’s home.

“The court order was signed for by my 14-year-old son on a Saturday morning, which I had to deal with – or turn up at the Royal Courts of Justice,” said Mr Richards. “It threatened my property.”

He sought legal representation and the order was withdrawn, but the process cost him £450 in legal fees.

Mr Richards said he believed that the tax bill from Germany was part of the same fraud.

He may now have to employ a German solicitor at a cost of €200 (£170) an hour to tackle the bill. “The reality is that unless I get this cleared up I’m liable for a vast amount of money,” he said. “To pay this fine, I’d have to remortgage my house.

“The scary thing is this passport is still valid [the expiry date was extended by the criminal] and who knows what else lies around the corner?”

HMRC said it was not its responsibility to intervene on Mr Richards’s behalf. “We can support UK residents in how to contact the member country, but cannot get involved in details of whether the tax is correctly applied,” said a spokesman. “If the taxpayer disputes the debt, they have to take that up with the member country and follow the country’s own appeals process.”

A spokesman for the German tax authority said it could not comment on Mr Richards’s case because of privacy laws.

Alan Woodward, professor of computer science at the University of Surrey, said: “Identity theft is becoming simpler and an increasing problem. The burden of proof is on the person whose identity has been stolen.

“The debts get passed to debt collection agencies and assume a life of their own.”

Figures from Cifas showed that there were 947 reported frauds using forged or stolen passports between January and September this year, up from 545 in 2012.

Prof Woodward said the move to biometric passports would make it harder for thieves to tamper with them. More than 40 million biometric passports have been issued since their introduction in 2006.

Jim Gee, director of counter-fraud services at BDO, the accountancy firm, said Mr Richards’s case was “a horror story”. He said: “I’ve not personally come across a case as bad as this.”

Mr Gee said there were many more fraudulent passports in circulation than suggested by official figures, although increasingly identity fraud is committed electronically rather than using documents.

“The standard of identity fraud has risen substantially,” he said. “This is a more serious problem now and I think there needs to be a proper governmental focal point to tackle identity fraud.”

The National Fraud Authority (NFA) is run by 57 people and is being absorbed into the Home Office from next year. “The NFA was set up to look at the problem of fraud strategically and coordinate efforts to reduce it,” said Mr Gee. “To get rid of the body doesn’t make sense to me – we shouldn’t forget that fraud is a problem that costs this country £50bn to £80bn a year.”

A Home Office spokesman said: “We continue to combat the evolving threat from criminals by keeping our anti-fraud measures under constant review.”

Mr Munroe added: “There is an obligation on all parties in this. Individuals must look after their data, the Government must put proper validation methods in place and businesses must use them.”

Consumers can find advice on protecting themselves from identity fraud through Cifas, Action Fraud, getsafeonline.org and dontletitbeyou.com.

If you believe you have been a victim of fraud, contact Action Fraud at actionfraud.police.uk or 0300 123 2040. You should also notify creditors, banks, phone companies and utility firms and keep an eye on your bank statements and credit score to see if any new credit has been taken out.

The major credit bureaus can work together to place a fraud alert on your credit file. The Cifas protective registration service is available to victims and those at high risk, and also places a warning on their credit file. Call Cifas on 0330 100 0180 or visit cifas.org.uk.


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