Jun 27, 2013 Simon Williams
Identity theft is nothing new these days, and there are always reports in the media regarding the latest massive corporation that was hacked or the new strategies criminals are using to trick people into giving away personal information. In the wake of the Great Recession in the United Kingdom, people are becoming desperate and some are using illegal tactics to get back on their feet.
Because they've been so popular in the nation for a number of years, short term lenders have to be a first line of defence in the fight against identity thieves. After stealing an individual's identity, many criminals then try to open up new lines of credit that they can reap the benefits of, and it's up to lenders to make sure this isn't a possibility.
New trend in the UK
According to The Daily Mail, companies may want to pay special attention to anyone attempting to borrow using information that belongs to elderly U.K. residents. The news source said that ATM fraud has tripled in the first four months of 2013, particularly concerning the accounts of older citizens.
Criminals are often looking over the shoulders of people in line at cash machines and memorizing important information. The elderly, in particular, are being targeted, the newspaper explained, because they don't keep as close of an eye on their lines of credit. Many times, "shoulder surfers" work in teams, so someone can record a PIN number, while others can steal the card. After this theft has occurred, criminals often try to open up new lines of credit, sometimes through short term lenders.
Effects on credit after theft
To add insult to injury, LowCards.com explained that after an individual's identity has been compromised, there's usually a freeze on all lines of credit associated with that set of personal data. While this is likely a good idea because it would stop anyone from opening a fraudulent line of credit, it could also bar the legitimate individual from seeking out traditional loans.
This could be helped by alternative finance companies. Should people see their credit scores sink temporarily because of fraudulent activity, they may be able to tap into funds from short term lenders who can help in a non-traditional means. For instance, many of these enterprises don't use normal credit scores to approve applications, instead basing creditworthiness on things like positive histories of repayment on utilities accounts or a number of other factors.