My mortgage application was rejected because a scammer opened a Three mobile account in my name

When Daniel Goble’s mortgage application was rejected, he had no idea that it was because a scammer had opened a Three mobile account in his name a year before.

After making some enquiries, he learned that the scammer had used his name and an old address he was no longer living at to open a Three mobile account and order a phone.

The bank details used to open the account were fake, so he didn’t lose any money. But it meant the bill for the phone was never paid – and this is where Daniel got into trouble.  

The scammer got a free top-of-the-range phone, while Daniel, 46, from Kent, got a damaged credit score after the Three account went into default following five missed payments amounting to £643.09. 

Scammed: Our reader had a mobile phone contract opened in his name – and when payments were missed it damaged his credit score (stock image)

When he asked for the account to be identified as fraudulent and closed down, Three was unable to even find it.

The account has since been closed, but Three advised Daniel that it could take up to 30 days for the account to be removed from his credit file. 

This means that his mortgage application, and his house move, have been thrown into disarray. 

Daniel said: It’s still having repercussions. I am trying to port my existing mortgage with my provider, and my mortgage adviser has had to write lengthy letters as solicitors are hounding for us to proceed with the next steps – but we can’t because of this hold up.’

But just how did the scammer manage to order a phone and take out a contract using bank details which didn’t exist in the first place?

This is not the first time This is Money has had to step in to help customers who have had a Three mobile contract fraudulently taken out in their name.

Last June, we helped a customer whose credit score had plummeted because a fraudster had opened a Three account using fake bank details, but the correct name and address.

Three confirmed that the account had been opened fraudulently and closed it down. The mobile phone provider told This is Money that: ‘We will be reviewing our systems based on this [customer’s] experience to avoid a similar situation in the future.’ 

Since then, This is Money has heard from other customers who have similarly had a Three mobile account taken out in their name by scammers using fake bank details.

Iain Ogilvie, from West Oxfordshire, is one of these customers. On Friday 1 March 2024, he received a confirmation of a direct debit mandate from Three. The name and address were correct, but the bank account details were made up.

It turned out that fraudsters had ordered two mobile phones in his name.  

Iain said: ‘It beggars belief that they don’t validate new accounts and make sure the bank details are correct before sending out a mobile phone.

‘Three’s sign up process is wholly lacking in verification. I was made aware of the fraud because I am still at the same address, and received the direct debit mandate in the post. But I fear this is happening to other people who will not be aware.

‘Surely Three should spend some time fixing this. Two devices were sent out to scammers who hadn’t paid for them, and presumably Three are at a financial loss.’

According to UK Finance, banks are only notified of new contracts once payments or direct debits have commenced. It says the controls to prevent this type of fraud would therefore lie with the companies who are issuing the contracts.

Martyn James, a consumer champion said: ‘The scam seems to occur with most but not all phone companies – but scammers trade information on those that have the laxest security procedures.’

A spokesperson from UK Finance said: ‘What’s happened is that someone has input made up bank details and the mobile phone company has accepted it and not checked it. The fact that the customers are getting letters looking for payment means no money is coming out of a bank account.

‘The company should be cross checking the details and the fact that this is happening may mean there is no oversight from them when it comes to this.’

A spokesperson from Three said: ‘Being a victim of fraud is a frustrating and scary experience. The fight against fraud is constantly evolving due to the changing tactics of criminals, so we invest continually in our systems to detect threats and train our staff.

‘Both of these accounts have now been confirmed as fraud and will be closed down correctly. We apologise that, in these instances, customer services were not up to our usual high standards.’

This type of fraud is an example of identity fraud. It happens when a scammer uses your name, address or date of birth to effectively create another ‘you’.

An identity thief can use a number of methods to find out your personal information and will then use it to open bank accounts, take out credit cards, loans or apply for state benefits in your name.

Watch out: There are many ways fraudsters can access your information, including through forms filled out online

Martyn James said: ‘The problem occurs thanks to online application forms. If you remember an in-person application for a phone contract, you used to need to provide photo ID and proof of address. 

‘I don’t know what requirements are in place now, but it would seem that this process isn’t as stringent as it used to be.’ 

Often, if you are opening an account with Three or other mobile providers in store you are required provide physical proof of identity, but this is not the case for online applications.   

Identity fraud is on the increase according to the Cifas, the UK’s fraud prevention service. It currently accounts for 64 per cent of the cases filed to the Cifas National Fraud Database.

In the first nine months of 2023, three quarters of identity fraud cases related to address impersonation fraud.

Over the last two years telecoms companies have been targeted more than most other sectors, Cifas said.

Almost 5 per cent of the total amount of disputes accepted by the Communications Ombudsman over the last 12 months have been related to security issues across the communications sector as a whole, including the subject of fraud, data protection and stolen equipment.

How do fraudsters get your details for identity theft?

Fraudsters use a variety of tactics to steal people’s details. They can get hold of them from post they see left outside, or looking up someone’s details online and inputting them when ordering a phone. 

A spokesperson from Cifas said: ‘We are seeing a significant rise in fraudsters stealing details from devices, laptops and phones mostly, as well as posing as suppliers (increasingly using fake emails and cold-calling) to obtain personal and financial information.’

Martyn James said: ‘The main issue is during the pandemic, the whole process of ID verificaton went online, which meant ID had to be provided by photographing or scanning a document and uploading it. 

‘If no passport or driving licence info is required, then someone just needs a bill from a bin to steal your info. Or, if there’s enough data out there for them to be able to crack one of your other accounts, they can download a bill or statement and use it for the application.’

This post first appeared on Dailymail.co.uk