As per UROPOL (Europe Union Police), an unprecedented cyber-attack called Wannacry ransomware hit thousands of computer systems across 150 countries a couple of weeks ago. With cyber-attacks becoming increasingly sophisticated and dangerous, individuals have become exposed to a higher risk of identity theft. In the US alone, more than 1.5 Crore individuals become the victims of identity theft last year and collectively suffered losses exceeding US$ 50 Billion (About Rs 3 Lakh 50 Thousand Crore).
In India, where cyber laws are ill-formed and there is a low awareness of cyber crime among the internet banking populace, the loss will be severe when a large scale attack takes place. As per records maintained by the NCRB, cyber-crimes are growing at a phenomenal rate of more than 100% year on year. India reported around 12,000 cases of cyber crime in 2015, this is expected to touch 50,000 this year. So the pertinent question to be raised here is what precautions can one take to safeguard one’s online identity? Should one buy some form of insurance which will indemnify him against losses or is it advisable to have a more effective malware protection in place?
To carry out an objective evaluation, we will need to understand how both these measures will impact our online security. The latter is a proactive measure and must be put in place in order to avoid the occurrence of such incidents. With more people starting to use the internet and smart phones for financial transactions, cyber criminals now have access to a large target audience. It is thus imperative to keep our devices secure through such software.
But the fact also remains that despite all efforts, cyber crime does occur. And unlike other regular crimes where one’s wallet gets pick pocketed; the quantum of loss is always limited whereas in identity theft the individual is often left penniless. More importantly the state of helplessness on account of someone posing as you online can result in severe complications. In India cases of Aadhaar identity being misused is rising everyday and the bio-metric information of individuals has already been leaked by some agencies.
It’s Time To Act!
Various protections are currently available for safeguarding your online identities. Credit monitoring and Identity Theft Protection are two such basic covers that one can invest in.
Credit monitoring extends alerts, as and when there is any change in the credit bureau records. Say for example Mr. Gupta has opted for credit monitoring and applies for an online loan. He would get an alert that a request for loan has been initiated. In this scenario, since he did apply, there is no implication. However, in case he had not applied, it becomes a matter of grave concern. Mr. Gupta can now take corrective measures and can save himself from a situation where he is forced to raise a CIBIL dispute at a later point of time.
Now consider a situation where Mr. Gupta does not get to know about fraudsters trying to use his identity to access funds. The loan may then get disbursed and it goes without saying that it would not be repaid in time. This will lead to an impairment in his credit records and will result in non-availability of credit when he really needs it. Experian India reported that Identity theft accounted for 77% of fraud cases in personal loans for 2016.
Just in case you are not willing to invest in credit monitoring (despite all the benefits that it extends) you can then opt to access your free CIBIL report. Following directives from the Reserve Bank of India, all four credit bureaus in India viz. CIBIL, Equifax, Experian and CRIF Highmark are required to extend one free report every year to all consumers. Checking your credit report will help you keep a tap on the status of your accounts. In case any anomaly is sighted the same should immediately be raised with the bureau and the concerned lender.
Despite all measures people take, thefts can happen. It is better to purchase an Identity Theft Protection Plan. The premiums are quite reasonable when compared to the coverage it provides.. This cover will give you protection against the loss that may occur on account of fraudulent activity. Please remember, financial losses can lead to a lot complications in life. It is always better to keep yourself protected and shielded. Investing in identity theft protection is definitely worth it.
Let us know what you think about buying an identity theft insurance in the comments section below.