MUMBAI: Leaving your 'know your customer' (KYC)
documents floating around can be dangerous for your financial
well-being. Banks have discovered several cases of identity theft where fraudsters have created a new third-party identity using misappropriated KYC documents, such as copies of phone bills and PAN card, to avail of credit cards or loans.
Some weeks ago, a Mumbai resident found that his identity had been
stolen and a fraudster had been using a credit card obtained by
misappropriating his KYC documents. Besides this, there are several
cases where identity theft attempts have been made, but have been nipped
in the bud by banks using fraud detection software.
In another case, a fraud attempt was detected after two applicants for a
primary and add-on card provided details that differed from what was
provided by identical applicants in another application. The fraud was
detected because the bank used a fraud detection service called Hunter
provided by Experian.
"Typically, the fraudster will provide most of the details of the fake
identity but will change either the mobile phone or email to keep
contact with the bank. Our software matches details provided by the
individual in other applications and flags it as suspicious if there are
too many discrepancies," said Mohan Jayaraman, MD, Experian Credit Information Company. Because it is a credit information company, Experian by law can retain information of borrowers on its database.
According to Jayaraman, credit companies in the UK provide a service
whereby borrowers can sign up and receive alerts every time a bank
inquires about his credit history. Such credit checks are made at the
time of granting loans or cards and an individual is immediately alerted
if his identity is being misused. "Consumers need to be alert in
disposing of their statements and should not dispose KYC documents to
the 'raddi-walla'," he said.
The other solution that financial advisers are recommending is that
every time photocopies are issued for KYC purposes, the borrower should
mention on the copy the purpose for which the documents are being
issued.
"Obtaining a credit profile from the credit bureau will give you an idea if your identity has been used by someone," said Rajiv Raj,
founder of Creditvidya, a credit counseling firm. "A change in address
should be immediately updated with all service providers. Otherwise this
gives an opportunity for mail to be intercepted and misused."
Source : http://economictimes.indiatimes.com
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