Two out of three people underestimate the risk of identity (ID) theft and more than eight out of ten Britons say they do not take steps to protect themselves from the consequences of the fraud, according to a new report.

ID theft, fraud committed in another person's name, can range from credit card details being stolen and used to make purchases or withdraw cash up to a criminal stealing a complete identity and using it to apply for a loan, passport or a driving licence.

One out of a thousand people become a victim of ID theft but the vast majority of people (85.9 per cent) say they do not take measures to protect themselves, according to research by MyCallcredit.

Of those would do not protect themselves, half say it is because they cannot be bothered or because they think it will not happen to them.

Consumers can help to protect themselves against the fraud by shredding documents, checking their credit file and cancelling unused credit facilities

"While most people know they won't be liable for any spending by an ID fraudster, they completely underestimate the impact it will have on their lives while they correct the trail left by the criminals on their credit file," said Alison Nicholson from MyCallcredit.

"Even simple things like being granted a mobile phone contract can be made impossible if a fraudster has had an impact on your credit file."