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."
-The Times of India