Derek Bond spent three weeks in a South African prison after a fraudster stole his identity. Nick Morrison looks at the increase in identity theft - and how we can protect ourselves.

IT was supposed to be a relaxing two week break, wine-tasting in the vineyards of South Africa with his wife, Audrey. But for Derek Bond, the holiday was cut brutally short, when he was arrested at gunpoint and despatched to a Durban jail, under suspicion of being one of the FBI's most wanted criminals.

Yesterday, three weeks on, the 72-year-old Rotarian was told he was free to go. The FBI had got the wrong man, it wasn't that Derek Bond at all who is thought to be behind a $4.8m telemarketing fraud, but another Derek Bond altogether. That other Derek Bond was arrested on Tuesday night in Las Vegas following a tip-off.

The first Derek Bond, the innocent one from Bristol, was the victim of identity fraud, one of the fastest growing crimes in Britain. Credit Industry Fraud Avoidance System (Cifas) recorded more than 40,000 cases of false identity and impersonation fraud last year, compared with just 13,000 in 2000, a rise of around 200 per cent. Cifas says 32,000 UK citizens were the victims of identity fraud last year.

"There are few other crimes that exist on this scale and create a fear of crime - the fear that someone else may have adopted your identity and could be impersonating you," says Cifas.

Identity fraud is the direct result of stealing someone else's identity and then using it to obtain goods or services, and a television programme earlier this year highlighted how easy it is. BBC investigative reporter Paul Kenyon got a driving licence in the name of David Blunkett, even though the Home Secretary is registered blind. Kenyon also opened bank accounts and acquired credit cards in the name of millionaire novelist Frederick Forsyth, author of The Day of the Jackal, where an assassin steals the identity of a dead person.

Both frauds relied on simply by obtaining a copy of the unsuspecting victim's birth certificate. From a birth certificate, a fraudster can get a National Insurance number, a bank statement and a utility bill - enough to establish proof of identity.

'It is all too easy, and the key is our reliance on paper-based proofs," says Bruno Rost, of Experian, the UK's largest credit reference agency. "Our systems of identification, such as birth certificate, passport, driving licence and electoral roll, have, to a lesser or greater extent, been compromised.

"It is still possible to get birth certificates generated for someone who is dead; there are a large number of false passports in circulation that are entered as valid; once you have got a birth certificate you can get a driving licence, and with the electoral roll it is possible to enter your name without local authorities having conducted effective checks.

"If you consider that your identity is a combination of bits of paper-based proofs, and if you were ever asked to prove your identity that is what you would come up with, then it is worrying."

First identified as a significant problem in the US, identity fraud has now been imported into the UK on a substantial scale, costing around £1.4bn a year, according to Government figures. Less strict identification laws than other EU countries, where ID cards are routinely carried, makes us an easy target for organised crime.

Victims are more likely to live in wealthier areas and have a good credit rating, as fraudsters are unlikely to want to waste time impersonating someone who is going to be turned down for credit, or whose address makes it less likely they would apply for more expensive goods or services.

Information is often gleaned from rubbish, particularly discarded junk mail, which can include personal details and be enough to give a fraudster the start they need. Experian examined the contents of 400 household bins in Nottingham, and found that one in five contained enough information to commit identity fraud. The company said that contacts with local authorities suggested the practice of 'bin-raiding', where the contents of rubbish bins are stolen, is on the increase.

Warning signs that you have fallen victim to identity fraud include the non-appearance of regular bank or credit card statements; credit card statements for items you have not bought; calls from a debt collection agency over goods you have never ordered, and letters saying you have been approved or denied credit for accounts you know nothing about.

To try and tackle the problem, Experian is calling for a new identification system, brought in wholly from scratch but based on birth certificates. Ensuring each birth certificate is cross-checked with a hospital register would ensure each entry was valid.

"Birth certificates are still the most reliable form of identifying people, and that would provide a unique identification number, linking into any other form of entitlement or benefit," says Bruno Rost.

If you feel you have fallen victim to identity fraud, there are steps you can take to try and limit the damage, including contacting your bank and credit card company, and informing the police, as well as getting a copy of your credit report and checking that all the applications for credit and accounts are yours. Cifas runs a protective registration service, which will put a warning on your address to indicate that additional checks should be carried out on applications for credit, mobile phones, mail order services and insurance.

As Derek Bond discovered, identity fraud can affect anyone, and you may be a victim right now without even knowing about it. We may not be able to see it, but our name is probably the most important thing we possess. As Bruno Rost says: "You would not leave the front door of your house open, and when you consider that your identity is an asset, it is worth going to some lengths to protect it."

* Experian issues a leaflet on identity fraud, available on 0870 241 4297; credit reports are available from www.experian.co.uk or 0870 241 6212

*To request protective registration, contact Cifas on 0870 010 2091

How to protect yourself from fraud

* Always keep important personal documents, including birth certificate, passport, driving licence, in a secure place, with plastic cards and cheque books

* Do not share personal information, such as credit card or bank details, unless you are confident you know who you are dealing with. Be particularly cautious if they have called you - take their number, check it and call them back

* Dispose of financial statements, credit card statements and other personal documents with care, preferably by destroying them in a robust shredder. Anything with personal information, even junk mail addressed to you, can be used by fraudsters

* Always check bank and credit card statements carefully, and if you find an unfamiliar transaction, contact your bank or card issuer immediately

* Do not let your credit cards out of your sight when making a transaction

* Always keep credit card receipts, and destroy them before you dispose of them

* If you move house, have mail redirected for at least a year