When somebody deliberately and maliciously uses your personal information to obtain goods on the internet it can be best described as consumer credit identity theft. Criminals will almost certainly attempt to obtain credit by deception at any opportunity and there are a number of precautions we must observe if we are to protect ourselves from these unscrupulous gangs.

Unfortunately consumer credit identity theft has been on the increase in recent years and despite a number of countermeasures implemented by leading institutions, government agencies and other official bodies we need to remain vigilant when giving out or disposing of our personal information. This article will attempt to advise you how best to prevent identity theft on the internet.

Put simply, consumer credit identity theft is the act of an individual or professional organisation to impersonate someone other than themselves, in an attempt to obtain goods or cash valued items at no cost to themselves. It is, of course, a criminal offence under the Fraud and Criminal Justice Acts to steal someone else’s identity in which imprisonment would be a likely outcome.

If you would like to check your credit record to see exactly what searches have been carried out in your name then Credit Expert from Experian offer a free thirty day trial.

So here are my top tips for preventing consumer credit identity theft:

• Keep personal information safe and secure - it may sound obvious but don’t ever disclose your personal details to anybody, including friends and family. Personal information could include PIN numbers and passwords, the whereabouts of share certificates and mortgage deeds for example. Telephone sales advisers should not be asking for personal information but they often do. Avoid giving out your details over the phone s scammers often deploy such techniques to obtain the information they are looking for. A scammer will not necessarily try to obtain your personal details in a single attempt.
• Keep your plastic safe - and away from associated or related PIN numbers. Again this may sound obvious but I’ve encountered a few people who write the PIN number of the card on the signature strip. The main reason appears to be because they have many different cards and are unable to memorise each and every card number individually. It goes without saying that if you lose your card or it is stolen then you must notify the lender immediately. You should therefore keep a note of all this information, but remember to keep it safe, secure and out of the reach of prying eyes. Update: Credit Card Swiping is on the increase which involves someone, usually at a shop or petrol station, swiping your card through a card reader. They can then use this information to clone the card and purchase goods on your account. Watch out for this one!
• Be vigilant when others have access to your mail - this may not be so obvious but I’m referring particularly to communal entrances in a block of flats perhaps. Unless you have your own pigeon hole or mailbox then you are not only at risk from neighbours but also from their guests. If possible, install a key operated letter box to which only you have access and ask the postman to use that for your individual mail items. If you suspect that your mail is being tampered with or stolen then you can contact Royal Mail’s Customer Care line on 08457 740740.
• When you move home - Ensure you redirect all of your mail to your new address. You will need to do this for each member of your family and there is a cost. You should also notify all organisations you deal with to amend their files, particularly your bank, building society, mortgage lender and employer.
• Register with the Mailing Preference Scheme - Under the Data Protection Act a data processor has a number of obligations to ensure your information is kept safe and secure. However, like many other data processors they can purchase your information in a marketing list and utilise it as they wish. Your information is therefore in the public domain until you dictate otherwise. The Mailing Preference Scheme is a scheme that allows you to opt out of receiving unwanted mailings from such organisations. Obviously, if your details cannot be purchased then fewer organisations will hold your information and therefore there is much less chance of abuse and negligence. Also, your local authority may have a policy of selling the electoral register which you are able to opt out of to prevent your name and corresponding address being distributed. As a final note you could also remove your telephone number from the telephone book.
• Be safe online - If you are ordering goods online then there are a few things you should consider like the computer you are sat at (is it your own personal computer or does someone else have access to it?). Of particular concern are internet cafes and library computers. Remember to use antivirus software to detect incoming threats from spy-ware and other attacks.
• Email Scams - Ignore all emails that purport to be from your bank or building society, online payment facility or similar organisation. You should also check that any links you click point to the correct domain. You can do this by hovering the cursor over the top of the link and looking at the bottom left corner of your internet browser where you will see the destination address should you click it. Be careful not to confuse a sub-domain with the institutions real address as www.lendername.scammername.com is completely separate from www.lendername.com.
• Check & Shred - When you receive your bank and credit card statements be sure to check through all the transactions and ensure there are no suspicious activities. File only those that you feel are needed and if possible shred everything else with a cross cut shredder. Under no circumstances should you ever dispose of personal details containing financial information in the traditional way.
• Check your credit file regularly - Credit Expert from Experian offer a subscription service whereby they will notify you whenever anybody carries out a search in your name. For a free thirty day challenge you can click HERE.

If you are thinking about taking out debt consolidation then this article will explain the debt consolidation pros and cons in a way that might make you think twice.

Debt consolidation is the process of taking out a new loan or other form of credit agreement to repay more than a single debt that you may have. Repaying just a single debt would be better described as refinancing than debt consolidation. Pros and cons of debt consolidation is my intended point of discussion throughout this article and I would not only welcome, but invite you to comment should you require clarification or advice on any matter.

There are a number of various types of credit products that can be used for debt consolidation and these include, but are not necessarily limited to:

• Unsecured loans
• A further advance from your existing mortgage lender
• A secured loan from a provider other than your mortgage lender
• A remortgage

In essence, and in most instances, ordinary people like ourselves often consolidate a number of shorter term debts, usually credit card debts, onto an unsecured loan with the intention of cutting up the card or terminating the agreements we have with the credit card companies. (I can’t help but smile right now as I’m thinking about the number of times I’ve done this). A major drawback of us doing this of course is that we will almost certainly run up those debts again without ever carrying out our original intentions of cutting up the cards. Once at this point we begin to look at other more serious debt consolidation methods, those that usually require some form of security over our property.

Many of us would undoubtedly benefit from debt consolidation if we did so on better terms than the aggregated multiple agreements already in place. By this I mean that the new loan or credit agreement comes with a lower interest rate, lower monthly payments and is easier to maintain in terms of dealing with just a single creditor instead of the multiple creditors currently in place.

Unfortunately debt consolidation, pros and cons of which must always be considered in detail before making the decision, can often incur a number of charges and set up costs such as broker and survey fees. Our decision to proceed with an application is often clouded by what we can see in front of us (such as the monthly payment) and our situation is not helped by our reluctance to investigate or research the market further. When sourcing, the APR is vital as this tells us what the ‘actual’ interest rate is including all those additional charges that may be incurred as part of the application process.

Extending the loan term isn’t always a good idea unless we desperately need to keep down the monthly cost. The term is important for two reasons, namely that extending a loan term on a predetermined APR will increase the total amount payable, and furthermore that the term of the loan must be sustainable for the purpose of which it is taken. For example, if you were to borrow £5,000 for a new car that you know will need to be replaced in three years time, taking out a loan over five years would be a poor decision because in three years time you would either need to borrow even more money on top of your existing loan, or fail to replace the car at all. So what are the debt consolidation pros and cons?

Well there are a number of advantages and disadvantages to taking out a debt consolidation loan, but to clarify they are:

Pros:

• They can often reduce your immediate outgoings which could free up the cash you need to enjoy life more.
• Your consolidation loan would be to a single creditor which means you only need to make one single payment each month and therefore your finances are simplified somewhat.
• Providing you have carried out your research correctly you could pay less interest overall. The aggregate interest, and the term of the new loan should lowered if possible, but where the term is extended then you need to find out the overall cost of the new loan and compare that to the overall cost of your old credit agreements.

Cons:

• By consolidating you could be putting your home at risk if you are securing the new loan against your property. In law, where you fail to keep up repayments on a mortgage or other secured loan then the creditor are within their rights to apply for a possession order.
• The set up fees could be costly. Where property is being put up as security it is likely that the new lender would want an official valuation of your property. This comes at a cost and if you couple this with any arrangement and broker or any other ancillary costs then the overall cost of the new loan may not be worthwhile.
• If you are extending the term of your borrowing then you could end up paying substantially more in the longer term. Your immediate payments may very well be reduced but consider the impact on your financial future as well.
• You might be tempted to take out more than you need! This is one of the most common mistakes and should be avoided at all costs. Ok, so the holiday might well be needed, or perhaps your car is a little older than you’d like it to be but nevertheless, these luxury expenses should be avoided.

I’d also like to consider a different method of consolidation which has become more common and that is zero percent credit card balance transfers which I believe to be quite a good way of transferring debts when used correctly. You need to forget about using the credit card cheques that you may be given and cease all spending on the new card unless there is some material benefit such as reward points or loyalty benefits. The interest is usually much higher on purchases and cash withdrawals (which the cheques would be classed as) so caution is advised. You should also weigh up the benefit of paying the newly implemented transfer fees - but the interest saved is often significantly more than the cost of acquiring the new card.

So there you have some considerations before going out and getting yourself a debt consolidation loan or mortgage. Although it can often be a welcomed break in your financial outlay it would be wise to consider the reasons behind the need to consolidate and whether a consolidation loan is the right thing to do - or whether you should speak to a debt specialist. Of course, if you are contemplating consolidation for second or even third time then it might be better to seek information from a suitably qualified professional.

Hi & welcome to personal debt adviser. The site is run by myself, Andy Wallace, and over the coming weeks and months I intend to write about various issues including budget finance, reclaiming bank charges, payment protection insurance (PPI) mis-selling and so on. I’ll also focus on ways of dealing with your creditors should they be chasing missed and late payments.

I intend the site to be a well designed and easily accessible resource to all financial matters, legal issues, recourse and redress. The options available to you as an individual and the ways in which to proceed with your intended action will all be detailed here in simple form, bulleted lists and in clear and concise, easily understood text. If you would like to speak with a professional adviser then there are pages on the site that will request a little more information about you before sending your details through.

When dealing with your debt issues you may be advised to request information held about you by your creditor. This is a legal right you have under the Data Protection Act 1998 and a simple ‘Subject Access Request’ comes with its own legal obligations to the creditor. A statutory fee of £10 should be included with the request.

A starting point for many is to obtain their credit report. There are three credit reference agencies in the UK which are:

• Experian
• Equifax
• Call Credit

Each of your creditors may use just a single Credit Reference Agency, or publish to more than one. It is therefore advisable to apply to them all so that you know exactly what information is held about you. Details on how to apply for your credit file will be published in due course in the ‘Guides’ section.

Speak again soon,

Andrew Wallace LL.B (Hons)
Personal Debt Adviser