Australian tax payers should be aware of scams designed to extract tax file numbers for the purpose of identity fraud.
This could leave their bank accounts empty and credit files ineffective for up to five years, says an Australian credit information expert.
Director of MyCRA Credit Repairs, Graham Doessel says if people fall victim to this particular type of identity theft, they are at a high risk of having their credit file misused.
“A person’s tax file number is like the key to their credit file. If fraudsters are able to obtain this number, they have a crucial piece of information for building a duplicate identity in the victim’s name,” Mr Doessel says.
Mr Doessel says social networking sites like Facebook have made it easier for fraudsters to obtain the extra personal information a criminal could need for identity fraud.
“People post a whole host of information about themselves on sites like Facebook, MySpace and Twitter, but people need to think – what would a criminal do with this information? If fraudsters already have a person’s tax file number, a simple check on Facebook for a date of birth can give them the tools they need to request replacement copies of personal documents, and use those documents to take out credit – even mortgage homes in the victim’s name,” he says.
This comes as the Sunday Telegraph reported that the practice of stealing tax file numbers has almost doubled in the past year, from 12,669 to 31,200 from the previous year.
The number of complaints made to the Commonwealth Ombudsman about the Australia Tax Office also increased almost 40 per cent, largely because of the stolen TFNs.
It reported that techniques to steal someone’s TFN include bogus approaches by phone calls, emails, letters, websites and text messages. People who share the same name and birthday are also in the “at risk” category.
The Government issued an alert on its StaySmartOnline following the 2010 financial year about bogus emails from the ATO specific to e-tax.
“New fraudulent emails are circulating which pretend to be from the Australian Tax Office. Using social engineering tricks the criminals behind these emails try to trick you into providing personal information as a pretext to receiving a tax refund. This personal information can be used by the criminals to steal your identity,” the alert says.
The Telegraph reported an ATO spokeswoman as saying stolen TFNs and identity theft was a big problem – the effects could last for years and were a nightmare to clean up.
“When an identity is stolen it can take a long time to put everything right,” she said. “A person can face financial problems if someone commits fraud or other crimes using your identity.
Other impacts may be experienced in getting a job, a bank loan or other credit, renting a house or a car, or applying for government services or benefits. “She said the ATO had established a “client identity support centre” to assist people whose identities were stolen.
Mr Doessel says identity fraud can often go undetected until the victim applies for credit and is refused.
“The fraudster could abuse someone’s good name all over town and it is not until the victim applies for credit and is refused, that they learn about the identity theft and subsequent fraud,” Mr Doessel says.
Any kind of credit account (from mortgages and credit cards through to mobile phone accounts) which remains unpaid past 60 days can be listed as a default by creditors on the victim’s credit rating, and those defaults remain there for 5 years.
Mr Doessel says the consequence of people having a black mark on their credit rating is generally an inability to obtain credit.
“Most of the major banks refuse credit to people who have defaults, or even too many credit enquiries, so it is really essential to keep a clean credit record,” he says.
By law in Australia, if a listing contains inconsistencies the credit file holder has the right to negotiate their amendment or removal.
“To clear their good name, the identity theft victim needs to prove to creditors they did not initiate the credit – which can be difficult. Not only are victims generally required to produce police reports, but large amounts of documentary evidence to substantiate to creditors the case of identity theft,” Mr Doessel says.