What Are You Liable For If Your Identity Is Stolen?

Being faced with identity theft bears a great financial burden and emotional distress on the victim. The aim of this article is to assess the extent to which one may have to bear liability if they are faced with an incident of identity theft and fraudulent actions resulting from the loss of their personal or financial information. We will also review the possible situations that may reveal that one has faced an incident of identity theft and discuss the preventive measures that one may exercise to minimise the damage.

What Are You Liable For If Your Identity Is Stolen?

What you are liable for if your identity is stolen depends on two things: (a) the personal article that was stolen ie a credit card or a passport and (b) the nature of the identity fraud committed.

For instance, the liability of a victim of identity theft will be different in the case of having someone use their stolen or cloned credit card in comparison with having someone use their passport to start a business or commit acts of crime. 

To have a better understanding of the extent of this liability, we will examine some real-life situations related to identity theft:

  • If someone steals your identity and gains access to your bank account, you are at risk of losing your account deposit either through cash withdrawal or purchases made using the account. If your bank can ascertain that you are not at fault for allowing someone else to gain access to your account such as sharing bank account details, they may refund the amount that you have lost as a result of identity theft; however, there is no guarantee to this. 
  • If your bank’s investigations into the matter reveal any negligence on the victim’s part, they will not provide any support and the victim will be held liable for the entire amount that has been stolen from them. Another reason why victims of identity theft may find themselves completely liable for financial losses through their bank account would be in the case of a delay in reporting the incident to the bank. If it has been 13 months since your identity was stolen and there was no action taken by you in terms of lodging a complaint, the bank can refuse to share liability.
  • If your bank account was used to make purchases by someone else and the transaction cannot be traced back to confirm whether it was conducted by you or someone else who had gained access to your account, you will remain liable for the loss incurred. However, if an identity theft victim does not agree with the decision of their bank to refuse to share any liability, they can appeal their case before the Financial Ombudsman Service.
  • Similarly, in the case of credit card transactions, if there is sufficient evidence to prove that your credit card was cloned without any negligence on your part, you not be held liable for the transactions incurred through its misuses. However, the policy of each bank or credit card company may differ in each case and there is no guarantee that a financial institution will share your liability in the case of credit card fraud.
  • Then there are cases of having one’s identity stolen that can bear long-term consequences. For instance, if someone steals your passport and then sets up bogus companies to scam many others out of their finances, you may not be able to avoid liability unless (a) you know for a fact that your passport is stolen and (b) you have made a timely complaint to the relevant authorities of its theft.

In extreme cases, criminals have been known to commit acts of crime using the articles of someones else’s identity. 

How Can You Tell That Your Identity Is Stolen?

You can tell that your identity is stolen if any of the following situations occur:

  • You have lost or misplaced important documents such as your passport or driving license or they were stolen. 
  • You stop receiving mail from your bank or utility service provider.
  • Transactions that were not carried out by you are included in your bank or credit card statement.
  • You apply for benefits but find out that there is already a benefits claim registered in your name.
  • Bills or receipts arrive for goods or services that you have not purchased.
  • When you apply for financial services such as credit cards or bank loans, your application is refused.
  • You receive mail from debt collectors or solicitors even though you have not taken any debt.

If you suspect that you are a victim of identity theft, you must inform Action Fraud; the fraud reporting and cyber crime division of the UK police department. You can choose to use their online reporting tool or call them on 0300 123 2040 to lodge your complaint.

How Can You Prevent Your Identity From Being Stolen?

In order to prevent one’s identity from being stolen, the most important thing to remember is the protection of your financial and personal information. Below are some general guidelines to help save oneself from identity fraud:

  • Personal documents should always be kept safe in a locked cabinet where no one else can access them.
  • Valuable financial documents such as certificates should be kept safely with the bank.
  • Unwanted documents such as bills, receipts, credit or debit card slips, bank statements or even posts should not be discarded and should rather be shredded so that the information contained in them is not readable in any way.
  • Personal information such as passwords or pin codes should not be shared with anyone even if they claim to be from one’s bank or the police.
  • Unsolicited messages and phone calls that ask for personal information such as passwords, pin codes credit or debit card numbers should not be answered and should be reported as scams in case of suspicious content.
  • One should not use the same password for multiple accounts as they are usually easy to guess for someone committing identity theft and can give them access to multiple financial sources.
  • Home wifi systems should be protected with a secure password so that access is limited to household members. Simultaneously if you are using a public WIFI, device or laptop, do not use them for personal or financial transactions. 


The liability that a victim of identity theft is faced with will vary from situation to situation as well as the document or information that was stolen. While one may expect that financial transactions made from their bank account as a result of identity theft may be refunded by their bank, there are certain strict conditions of the bank to be met. However, having one’s passport or driver’s stolen as a case of identity theft may bear dire consequences and the possibility of being liable for any acts that were committed if the identity theft was not reported to the authorities when it occurred.

FAQs: What Are You Liable For If Your Identity Is Stolen?

Can you be liable for identity theft?

Yes, you can be liable for identity theft if you fail to report it in time or if evidence proves that the identity theft occurred due to your negligence.

What can I do if someone is using my identity?

Even if you suspect that someone is using your identity, you must inform the concerned authorities depending on the personal information being used such as passport, driving license or bank account. Additionally, you should also inform Action Fraud for an investigation into the matter.

Is identity theft a crime in the UK?

If identity theft leads to the use of personal or financial information causing an incident of identity fraud, it will be considered a criminal offence in the UK. 

What is the punishment for identity theft?

Identity theft and the leading fraudulent activities, as a result, can lead to a prison sentence of between two to seven years; depending on the severity of the identity fraud committed.

How can I find out if someone is using my identity?

If there are financial transactions from your bank account or credit card which are not initiated by you, your mail gets missing or you are being denied financial services, there is a chance that someone is using your identity.


Identity theft and scams: reclaiming your money | MoneyHelper

The consequences of identity fraud | Equifax UK.

Identity theft | ICO.

Identity fraud and identity theft | Action Fraud

What to do if You’re a Victim of Identity Fraud | Experian