John Lowe The Money Doctor here breaks down 7 types of identity fraud you might come across, how to avoid falling victim to them and how to safeguard yourself against future scams. 

While it sounds a lot more Hollywood than a corner shop robbery, identity theft is much more widespread than any of us would like to think. It occurs when a criminal uses a person’s identity illegally, generally in order to gain access to the victim’s finances or to use their identity to set up a bogus bank account.

Even worse are the criminals involved in organised crime, who aim to use your identity and money for illegal activities such as drug and people trafficking.

We have come a long way in the last few years. As we all know, the internet can be both a blessing and a curse; and while many of the scams floating around these days manage to succeed due to the online and social media, internet access also means that such identity fraud is a lot more publicised and people are becoming educated on the risks as a result.

The most common forms of fraud to watch out for in Ireland today are:

1. Phishing
Perhaps the most widespread and convincing of all, this scam takes place via email and often involves receipt of a mail that appears to be from a reputable business, perhaps one with which you already engage; however, clicking any link within the email results in damaging software, or malware, being downloaded to your computer.

Another form of phishing involves the victim being told they have won a prize and convinced to supply their bank details to the scammer in order to collect it; or that they have been contacted by a rich foreign diplomat or prince who needs help moving some money around and just needs a friendly bank account in which to rest his funds for a while – a service for which he’ll pay you handsomely...

Phishing is the most common form of fraud, always check who is sending you emails

Safeguard: The general rule to avoid falling victim to phishing is not to trust emails that appear to be from a bank and to never click a link within a suspicious email.

2.  Card fraud
Stolen or copied credit/debit cards, or their details, are used to withdraw cash or to make purchases online. Your card details can be harvested through "skimming", a process whereby a device fitted to an ATM copies the details of your card as you insert it.

Safeguard: Do not use any ATM that looks suspicious or as though it has been tampered with.

3. Invoice redirection fraud
Criminals contact a business pretending to be, e.g., a supplier with whom that business already works, providing alternate payment details so that the funds for any future purchases from that supplier are paid to the scammer.

Safeguard: Should this happen, always end the call and phone back your supplier directly.

4.   CEO fraud
Junior finance employees are contacted by someone purporting to be a senior member of staff at their company, requesting that a work-related payment is made urgently – to the scammer’s account.

Safeguard: Use your common sense: first, check that the email address is definitely an internal company address. If you are suspicious, speak to a trusted member of staff directly.

Only give out bank details over the phone to callers you trust

5. Phone fraud
Another particularly common scam, this occurs when a person receives a phone call or text from someone purporting to be, e.g., a bank or service provider. The scammer will often ask for ID details, like passwords and account numbers.

Safeguard: Never, ever give out your password or bank details on a call like this.

6.   Advance fee fraud
This occurs when people are convinced to pay upfront for a product or service that does not exist, such as a rental down payment for a property they have not seen in person.

Safeguard: Try to be wise. If something seems too good to be true, trust that it probably is; and if you have never seen something, don’t throw your money at it.

7.   Romance fraud
Often linked to catfishing – where a person is led to believe that they are talking to someone online, when that online friend does not, in fact, exist – romance fraud occurs when someone believes they are in a romantic relationship with a person they have met online, only to be asked to pay for the person to visit them, or to help the person out in some financial way.

Safeguard: Be careful about who you speak to, and never send money to a person you have never met.

It’s not just nameless, faceless, online entities, either; as of August this year, 171 suspected cases of fraud had been detected in registrations for the public services card, with duplicate applications being made to the Department of Employment Affairs and Social Protection.

What should I do if I’ve been a victim of fraud?
If your cards are involved or could be involved, immediately contact your bank and ask them to freeze them; then contact your local Garda station.

But prevention is better than cure, and by adopting a few simple rules, you can arm yourself against fraudsters heading your way:

Make sure no one is standing too close to you while you withdraw money

1. Watch out for "Shoulder Surfers" and "Skimmers" 
Shield the entry of PINs and be aware of people standing too close to you when you are using your credit or debit card in public. Many criminals use mobile phone videos and cameras when shoulder surfing to obtain your private information; so if you feel someone taking a peek, don’t be too embarrassed to cover the keypad with your hands.

Never allow a salesperson to take your credit card out of your sight when you are making a purchase. It is also advisable to use ATMs that are familiar to you, so it is easier to notice if the equipment has been tampered with. Your increased awareness may reveal a skimmer’s attempt to steal PINs and banking details at that site.

2. Online Safety
Do not click on links in any emails you receive from financial institutions even if you are 100% sure they are legitimate. Go to your browser instead and type in the domain name of the institution, for example, www.aib.ie or www.paypal.com, before logging in to your account. Remember, some emails you receive about your financial accounts are "phishing" emails.

3. Shop Safely
Use a "virtual" card number. These are randomly generated credit card numbers that are disposable and that online shoppers use once and throw away. It’s linked directly to your real credit card account so purchases show up on your monthly bill. The service is free and easy to use.

AIB has a product called Code Card, a wallet-sized card with 100 temporary numeric passwords on it, designed to be used each time you want to make one-off transfers or set up new accounts. Each password is single-use and unique. Ulster Bank offers a similar service.

Shredding pre-approved credit offers before tossing them prevents fraud

4. Shred Before Dumping
Do not throw pre-approved credit offers in your recycling without shredding them beforehand. Fraudsters can sift through bins to retrieve these and use the offers to order credit cards in your name. Other sensitive information like credit card receipts and all unneeded bills should be destroyed as well.

5. Get the Hammer Out
Consider using a software tool, such as DBan or Eraser, to do a complete wipe of your drive; but beware that erasing data does not eliminate the original bits and bytes.

Physically remove the hard-drive from any computer or table you no longer want and smash it with a hammer to ensure you’re not passing along your personal details. Thieves are very sophisticated today and can easily recover data from an erased or damaged drive.

6. Be a Prudent Poster
Posting just a handful of personal details on a website can give fraudsters all the information they need. Armed with info found on your Facebook, Instagram or Twitter accounts, they can open bank accounts and credit cards in your name. It is possible to protect your privacy by adjusting your settings.

Take my advice and you will live a lot more safely online. Trust me – your bank balance will thank you for it.

For more information click on John Lowe's profile above or on his website.