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October 12, 07

NEWS / Experian Research Reveals Identity Fraud Trends, Hotspots and Likely Victims


Linked from: http://www.creditman.biz/uk/members/news-view.asp?newsviewID=7707&id=1&mylocation=News&chksrc=NNow4251

Experianģ, the global information solutions provider, today revealed the results of new research into identity fraud trends. The experiences of victims, who first contacted Experianís Victims of Fraud service between 1 January and 30 June 2007, have been analysed and are reported in the Experian Victims of Fraud Dossier, part III.

The rate at which new identity fraud victims are contacting Experian continues to grow: 2,570 victims of identity fraud contacted Experian for assistance in the first half of 2007, representing a 68 per cent year-on-year increase in identity fraud activity reported to Experian.

Present address fraud, which can involve the interception of mail, continues to be the most common ID fraud offence. Offences involving the victimís current address accounted for 39 per cent of frauds reported during the first half of 2007. Cases of forwarding address fraud, in which the fraudster redirects the victimís post to a drop address that he/she then visits to collect mail, rose the most, representing 32 per cent of frauds reported to Experian. This compares with 22 per cent for the second half of 2006.

The wealthiest sections of society continue to be popular targets for fraudsters, who are increasingly launching sophisticated attacks on the most creditworthy individuals. Those at the pinnacle of successful careers and top-salaried professionals living in prestige city locations are among those at the highest risk. While wealth and lifestyle can make such groups more likely to be targeted, those renting are also at high risk.

London remains the identity fraud capital of the UK, with those living inside the M25 more than three-and-a-half times more likely than the UK average to become victims. However, it is Kensington Ė where residents are almost five times more likely to fall victim than the UK average Ė that is now the highest risk area. Residents around Clapham Junction are also among those most at risk.

Outside London, the commuter towns that house many of the capitalís workers feature among the riskiest areas. Residents of St Albans, Guildford and Slough are more than twice as likely to fall victim as the UK average.

The financial services industry continues to be vigilant and brought more cases of identity fraud to the attention of victims in the first half of 2007 than in any previous six-month period. However, the percentage of cases flagged up by financial services firms actually fell from 45 per cent in the second half of 2006 to 31 per cent in the first half of 2007. This is because more consumers are taking more care of their personal information.

For the first time ever, the largest proportion (55 per cent) of victims were able to diagnose the problem themselves, discovering that their identities had been compromised when they obtained a copy of their Experian credit report or by monitoring it online for fraudulent activity using CreditExpert.co.uk.

On average, each fraud costs the financial organisation involved £680. Once again, mail order companies were hardest hit in terms of fraud volumes, accounting for 68 per cent of all new cases.

However, it is loan providers that suffer the most financially. The average cost per case for fraudulently obtained loans is now £6,138, up from £4,797 from those reported in the second half of 2006. Credit and store card issuers also continue to be frequently targeted, although issuers are successfully taking steps to reduce their exposure.

Eight per cent of frauds reported to Experian are known to have been reported to the police during the period.

Helen Lord, Fraud and Regulatory Compliance Director at Experian, comments: ďOur analysis of the experience of recent identity fraud victims reveals valuable new insight into the problem. Although some people are more likely than others to become a victim, and consumers are more aware of the threat than ever before, everyone is a potential victim. The rate of identity fraud growth continues to be scary.

ďNo one should be complacent; they need to take active steps to protect themselves against identity theft, including regularly checking their credit report, preferably using a monitoring service like CreditExpert. This enables people to quickly spot any unfamiliar activity on their credit report, such as a fraudulent loan application, and to seek assistance so that they can be helped to sort it out.Ē

Protecting against identity fraud

Experian offers top tips to help consumers and businesses protect themselves from fraudsters.

Tips for consumers:

∑ Regularly monitor your credit report using a service such as Experianís CreditExpert. Check your report for unauthorised or suspicious activity, such as new accounts in your name that you didnít open or credit searches by companies you havenít dealt with.

∑ Watch out for your mail. Fraudsters often obtain documents by stealing or redirecting mail Ė so keep an eye out for post that youíre expecting and report missing items quickly if they donít arrive.

∑ Destroy documents showing your personal details before throwing them away. Be careful about discarding anything with your name, address or other details on it, as they can be used by fraudsters to open accounts in your name. Use a shredder to destroy documents such as bank statements, utility bills, application forms, chequebook stubs, card receipts and even envelopes bearing your name and address.

∑ Keep your information up to date. Make sure the Royal Mail, your bank and organisations such as your mobile phone provider are informed of any changes of address. This prevents any document that includes your vital details falling in to the wrong hands by being incorrectly addressed. When anyone fraudulently applies for an account under your name and previous address, this will be automatically flagged if that organisation is using electronic authentication.

∑ Forward your mail. If you move home, have your mail forwarded to your new address for at least six months.

Top tips for businesses:

∑ Conduct a data audit. Be confident that you know what information you hold on your customers and that it is accurate and up to date.

∑ Be secure. Review who has access to different types of customer information and for what purposes.

∑ Use electronic authentication. It is faster, safer and more cost effective than paper-based authentication.

∑ Donít leave a litter trail. If you still rely on paper-based processes to authenticate your customers, ensure that you securely dispose of documents that you no longer need using a shredder. Never throw documents in the bin.

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