Is a “Fraud” Alert Preventing you getting Credit?

Is a “Fraud” Alert Preventing you getting Credit?

If you are finding it difficult to obtain credit or to open a new bank account, there may be various reasons for this.

It may be that you have a poor credit history, or little or no credit history. However, it may also be that you are suspected of, or have been the victim of identify theft or have been suspected of, or involved in committing fraud.

In the UK, there are three firms who are involved in preventing fraud and receive information from their members, who are normally finance firms or banks. They then share this information with them to help protect them and their customers from further fraud.

These firms are:

If any of these firms hold information about you on their databases, this may be affecting your ability to obtain credit. You may not even know about it, until you apply for a credit card, loan or bank account and are either refused credit or the firm your applying to requests further information from you.

In some situations, information about you that is held by these organisations, may even be shared on your credit reference file.

Although this article primarily focuses on CIFAS, which is the largest of the three organisations, it also covers how you can find out more about what information the other two firms hold on you.

Subject Access Requests

Where you suspect one of these firms may be holding and sharing information on you, because you have been refused credit or a new bank account or a firm has requested further information from you, you can find out more by making a Subject Access Request under the Data Protection Act 2018.

To do this, visit the different Company’s webpages below. Subject Access Requests are normally free to make and they have 40 days to comply with your Request

Who are CIFAS and what are their Markers?

CIFAS is the UK’s leading, not for profit, anti-fraud organisation. Their membership like National Hunter and National Sira also consists of UK banks and finance organisation, who share information with them.

What Types of CIFAS Markers are there?

There are a range of CIFAS Markers that can shared with CIFAS members about you. These are:

0             Protective Registration — Recorded at the request of the person named.
1             False Identity Fraud — Use of a false name with an address.
2             Victim of Impersonation — Use, by another person, of this name and/or address.
3             Application Fraud (Facility Granted) — Use of name reasonably believed to be genuine, but with one or more material falsehoods in personal details or other relevant information; the facility was granted.
4             Application Fraud (Facility Refused) — Use of a name reasonably believed to be genuine, but with one or more material falsehoods in personal details or other relevant information; the facility was refused.
5             Conversion — Conversion (disposal or sale) of goods (to which the hirer/buyer does not have title) under a hire purchase, conditional sale, contract hire, leasing or rental agreement.
6             First Party Fraud — Opening an account or other facility for a fraudulent purpose, or the fraudulent misuse of an account or facility.
7             Aiding & Abetting — Aiding, abetting or assisting, or conspiring with, another or others to fraudulently procure credit, or other facilities, or hire products or services.
8             Insurance Claims Fraud — The making of a claim(s) under one or more insurance policy (ies) with one or more material falsehoods or by presenting a false or forged document.

CIFAS Markers that appear on Credit Refence

Only “Victim” Markers should be registered on your Credit Reference File. These are the ones where you are believed to be the person who is at risk of fraud, rather than the others, where you are suspected as having been involved in perpetrating it. Victim Markers means the ones which you have registered yourself (Protective Registration) or where you are at risk of impersonation.

This is so when a firm or a bank carries out a credit check on a customer and discover a CIFAS alert has been added to their credit reference file, they should exercise caution, as this may be a consumer who could be at risk of identity or data theft.

A CIFAS Victim Marker, however, should be just that, an alert that the customer could be a Victim and not an assumption that they are involved in fraudulent activity. The firm should then take further steps or request further information, such as additional proof of identity, before they make a final decision. If they are satisfied you are who you say you are, then a Victim Marker should not result in you being refused credit or being denied the right to open a bank account. This is especially true when it comes to a basic bank account, as many people legally may have the right to open one.

However, if you ever apply for Credit or to open a new bank account and are refused and there is not a CIFAS Marker on your credit reference file, you should ask the firm why they are refusing you, as if it’s because they suspect you of fraud, it may be a CIFAS Marker has been shared with them or another database, such a those operated by National Hunter or National Sira hold information on you. You may not even know that this has occurred.

How do you find out if a CIFAS Marker has been Shared about you?  

However, if nothing is appearing on their credit reference file and a finance firm has refused an application based on concerns about fraud, you can also make a Subject Access Request (SAR) to CIFAS, National Hunter or National Sira for free and request they share all the information they have on you. 

Once you receive that information, if you want to dispute the accuracy of it, you can then make a complaint against the Organisation that has shared the information with CIFAS, National Hunter or National Sira.

If you are still not happy with the final decision of that firm or bank, then you can complain to the Financial Ombudsman Service or if you prefer, use the fraud prevention firm’s own internal dispute resolution process (this does not prevent consumers still taking their complaint to the Financial Ombudsman if they remain unhappy at the end of the process or to the Information Commissioners Office).


Can you Register your own CIFAS Protective Alert?

CIFAS alerts, however, are not just registered because of information that is provided by creditors or banks, they can also be registered because of information you have provided CIFAS, because you believe you are at risk of fraud.

This is called Protective Registration and can be applied for here. The process is not free (it costs £25) and the alert remains on CIFAS’s database for two years. After then the alert should lapse or you can renew it through CIFAS.

Protective Registrations should not affect your credit rating or ability to obtain credit but may result in banks and finance firms exercising further caution to ensure the person applying for credit in your name, is in fact, you.

Protective Registration should also not impact on any current accounts you are operating and banks and finance firms, should not stop you getting further accounts where you have a protective registration, but they may request further information from you first.

If you are applying for a basic bank account and are refused because of a CIFAS Marker, you may have stronger grounds for complaining, as under UK regulations, the Payment Account Regulations 2015, entitled many people to have a basic bank account. See here

Can other CIFAS Alerts affect your Credit Rating?

Other protective registrations of CIFAS markers may affect your credit rating, as this information is shared with credit reference firms.

How long does CIFAS store Markers on you?

How long CIFAS stores its Markers on you varies and depends on the type of Marker it is.

Protective Registrations, the type you apply for yourself, remain on the CIFAS databases for 2 years.

Victim Markers that warn you are at risk of impersonation are kept for 13 months.

Other Markers can be kept for up to six years.