Arc Legal Assistance has launched a new service to protect policyholders against the growing threat of identity theft.

Recent government estimates claim identity theft costs the UK economy £1.7bn and affects more than 100,000 people a year.

Arc's new Identity Theft and Fraud Protection policy incorporates a 24-hour legal helpline, a proactive 'contact service', defence of civil actions against customers for debts resulting from identity theft, pursuit of an action to remove county court judgements against customers and a debt counselling service.

Richard Finan, director of Arc Legal Assistance, said: "The effects of identity theft can be devastating. What's more...it may not be noticed by its victims until significant damage has been done.

"People should take basic precautions to safeguard their personal information."