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Identity theft: UK faces further threat due to DWP blunder

15th February 2007
By Staff Writer

The UK Department of Work and Pensions (DWP) has made a blunder in notifying pensioners of their new pension amounts and confirming the bank details the pensions were to be sent to. When sending out notification letters to some pensioners, the DWP managed to attach a further letter not intended for the actual recipient. This raises the threat of identity theft, which is already a growing problem.

Identity theft is costing the UK a massive GBP1.7 billion annually. This is equivalent to GBP35 per adult and represents the costs associated with identity fraud, such as the time and effort expended by individuals and financial institutions in dealing with the problem.

At the beginning of 2006, the UK's Home Office said that in excess of 100,000 people are affected by identity theft in the UK every year, and with the blunder by the DWP, this figure could rise by as many as 26,000 - the approximate number of letters that were automatically sent out by mistake. The DWP has apologized for the error, has stopped sending out the notices until the situation is rectified, and has also promised to ensure that no one will be out of pocket as a result of its error.

However, there is the very real possibility that, although the vast majority of those in receipt of these computer-generated letters will do the right thing and either shred the information or return it to the DWP, some unfortunate pensioners will become the victims of identity theft.

Approaches to identity theft are not limited to phishing emails and other online scams, and can include low-tech options, e.g. taking personal documents from dustbins, till rolls from the back of shops, and the interception of personal mail. A fraudster could see this unintended release of information by the DWP as easy money and use it to open fraudulent bank accounts, secure personal loans, etc.

It was only towards the end of 2006 that three people were jailed for stealing up to 40 people's identities in a plan to steal over GBP350,000 of tax credits, demonstrating the prevalence of the problem in the UK.

One would expect that with the furor surrounding this government blunder, financial institutions would be wary of using DWP notifications as proof of someone's address and banking information when setting up accounts, borrowing money, and so on. However, there will always be one that slips through the net, and individuals must be on their guard.

Source: OpinionWire by Butler Group (www.butlergroup.com)

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