COMMENT
Why You Should Check Your Credit Report

A couple of years ago I was the victim of card fraud. My debit card had nearly expired so I was due to receive a new one but someone intercepted it in the post and went on a spending spree with it. It's a good job I read my bank statements when they arrive otherwise the fraudulent spending could have been much higher than £600.

My problem was pretty easy to sort out and these days fraudsters would find it more difficult to commit this sort of crime because they'd also have to intercept the relevant PIN too. But that's not to say it can't happen!

For example, in a case study kindly provided by Experian, Mr B lived in a block of flats where the occupants would simply pick up their post from a table in the communal hallway. Just before Christmas he realised that he didn't seem to be getting much post including some bills he'd been expecting. And then on Christmas Eve he got a bombshell phone call from his bank.

Apparently a large amount of money that had been deposited and then withdrawn from a new account he'd recently opened. The strange thing was that while he'd certainly recently opened the account, he hadn't used it because he hadn't yet received his new card or PIN. Somehow a fraudster had intercepted his new card and the PIN and had used it to deposit a fraudulent cheque which he'd then proceeded to draw on.

Once it was satisfied that Mr B was not trying to commit fraud himself, the bank wrote off the loss - but Mr B's troubles had only just started.

The criminal went on to use Mr B's name and address to open various store accounts and acquire several mobile phones on different networks running up unpaid bills and damaging Mr B's credit record as he went.

Luckily a mobile phone salesman remembered selling a phone to the fraudster and was able to pick him out in an identity parade. It was one of the tenants in the block of flats where Mr B lived.

Unfortunately, the criminal fled abroad before he could be put on trial and Mr B was left to clear up the mess. Although his credit report was largely cleared up, his credit status still suffered with card issuers currently only willing to give him low spending limits.

When you think how easy it was for the criminal to steal Mr B's identity, it's hardly surprising that it's one of the UK's fastest-growing crimes - the government estimates that it costs the country £1.3 billion a year.

Regularly checking your credit report will show up instances of fraudsters opening accounts in your name so you can take action sooner rather than later.

You can check your file via the Motley Fool, as we have joined forces with Experian, one of the two big credit reference agencies, which is offering a free 30-day trial of CreditExpert. It's also worth checking the other main agency, Equifax, as it may hold different information.

Check out How Credit Scoring Works; the Importance Of Cancelling Unused Cards and protect yourself from Identity Theft.