It came as quite a shock for hairdresser Sarah White to see $200 coming out of her salary every week to pay off a student loan.
"I thought, 'That's strange, I don't have a StudyLink loan.'"
It prompted her to check her credit rating. It was an even bigger shock. Dozens of loan applications had been made in her name and her credit score had plummeted to 75/1000.
"I was gobsmacked," the 22-year-old said.
White realised she was the victim of identity theft. She rang StudyLink, who told her to ring Inland Revenue (IRD), who told her to ring the police. She believed someone had been using her name, address, date of birth and driver's licence details to pay off old loans or apply for new ones in her name.
This data may have got into the wrong hands because of a data breach, or it could be that someone copied the data from her driver's licence without her knowing. The frightening fact is that this scant amount of personal data is all it takes to turn someone's financial life upside down.
In some cases, the loan applications made in White's name were successful, with some not being paid back and leading to debt collectors chasing up White's whereabouts at an old address. In most cases, the loan applications were rejected. However, even rejections have a negative impact on credit ratings.
White came to Fair Go because she'd been trying to get the StudyLink payments to stop and her credit rating score back up to a respectable level but hadn't had much success with either. It was very important to her, as she and her partner are wanting to get a mortgage to buy their first home. A good credit rating score of at least 600-700 is needed for this.
Fair Go followed up with several agencies. Work was happening behind the scenes regarding the StudyLink loan but it's apparent it's a very time-consuming process. We also spoke to one of New Zealand's three credit reporting agencies, Centrix, which suggested White cancel her driver's licence and put a freeze on her credit report, meaning no companies can access her credit information for 20 days. This time period can be extended if need be. In this case it was definitely needed.
White was asking loan providers to assess the applications made in her name and had managed to raise her score from 75 to 407, but then her score had dropped again to 339. She felt she was getting nowhere fast.
Mark Rowley from ID Care, a free advice line for people affected by identity theft, says a likely reason is that a credit rating score is affected by the length of time debt collector activity has been on a credit report. For White, it's been some time despite her efforts.
Rowley believes the credit reporting agencies should get more involved in helping victims improve their ratings as they have an obligation under the Privacy Act. It says that credit reporting agencies must "take such steps as are reasonable in the circumstances to ensure that… the information is accurate, up to date, complete and not misleading".
However, Monika Lacey from Centrix stands by the fact the most effective approach is for individuals to make their own enquiries, as privacy restrictions can make the process difficult for the agencies. Also, the individual can then pass the information on to all three reporting agencies.
There is some good news though. The StudyLink loan payments have now stopped and the police has confirmed it's acting on a lead relating to the people using White's personal information. White says the police told her "it's a couple, ex-partners" in New Zealand.
White now feels like she can see a light at the end of the tunnel – one she might not be seeing without Fair Go's assistance.
"I wouldn't be anywhere without you guys helping me."
It shows the need for support and that need is growing with cases coming to ID Care rising by "350% in the last few years".
Anyone who believes they are a victim of identity theft can find free support and advice on the ID Care website and helpline Money Talks.
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