ID fraud is on the up, with one in four people becoming victims.

One in five victims of ID fraud are refused full compensation, according to new research from independent and unbiased consumer magazine, Which?

In the UK, one in four people have been the victim of ID fraud, which has increased at cash machines by 31% between 2007 and 2008, resulting in the combined loss of £609.9 million last year.

Cases of ID fraud are steadily increasing. Cifas, the UK’s fraud prevention service, reported 24,819 recorded cases of identity fraud from January to March 2009 – 38% more than in the previous quarter.

However, one in five of these victims only received partial compensation, or in some cases, none. According to clause 12.12 of the Banking Code, if a person does not take care when using their Personal Identification Number (Pin) or discloses it to someone, then banks may choose not to recompense the victim.

Which? magazine cited an example of one of its members, Iain Richardson, who was denied compensation after £2,000 was stolen from his account. The bank refused to reimburse Mr Richardson because his Pin number had been used to withdraw the money.

Martyn Hocking, Which? Editor, offered this security advice: “Financial fraud is inconvenient and stressful, and can also be costly if you’re unable to recover your losses. Fraudsters can be extremely clever and may need just a few details to access your accounts, but you can significantly reduce the risk of fraud if you’re vigilant.

“Most of us know that we shouldn’t write down our Pin, but we should also shred bank statements, be cautious about the passwords we use and think twice before posting personal details online.”

The magazine recommends that people who experience ID fraud should contact their bank in the first instance. If the result of their discussions with the bank are deemed unsatisfactory, they can then pass the matter on to the Financial Ombudsman Service (FOS) free of charge.

Tips to prevent ID fraud include: redirecting post for at least one year after a house move; shredding old bank statements and receipts; and using online anti-virus software and a firewall. For more tips and to view a video guide about combating fraud, visit the Which? website at: www.which.co.uk/identityfraud ^[1].

To read ICM’s article on fraud in the recession, visit: http://news.icm.ac.uk/business/fraud-on-the-up-as-the-recession-bites/2098/ ^[2]