What is Application Fraud?

Application fraud occurs when someone steals enough personal information about you, such as your name, address, telephone number and Social Security Number, to enable them to apply for financial credit products in your name.  This can include new credit cards, bank accounts, loans and even rental agreements, all of which will be recorded fraudulently in your name, leaving you liable for any resulting charges and fees.  This can have a very negative impact on your credit score, as any debts run up in your name will be recorded on your consumer credit report, and this can prevent you from applying for credit yourself until you have managed to regain control of your report, and sort out any fraudulent applications for credit (learn more about identity theft detection).

There are many ways in which you can reduce the risks of application fraud and these include:

• Protect any information in your care that contains your personal details such bank statements, employment contracts, payslips, tax forms and utility bills.  Never throw these away without shredding them first, as one of the easiest ways in thieves have to steal personal information is through searching the rubbish for important documents.
• Mailing preference services allow you to take your address off junk mailing lists, and this can help stop junk mail from being delivered to your property, that can often contain scams aimed at tricking you into revealing your personal identity to potential fraudsters.
• Never reveal personal information to unsolicited contacts, either through the telephone, email or postal systems, unless you can absolutely guarantee that the request is genuine and necessary.  If someone is claiming to be from a legitimate organisation and is asking you for sensitive information over the phone, then you should take down their details and call them back through the company switchboard to ensure they are a genuine employee.
• If you move house make sure you redirect all of your mail to your new address, and this can help to prevent fraudsters from getting hold of any important mail that could be delivered after you have left.