ID fraudsters soak the rich
Identity fraud grew alarmingly in the UK last year, with affluent Londoners particularly at risk, according to figures from credit reference agency Experian.
More than 6,000 victims of identity fraud contacted Experian last year, compared with 3,500 in 2006. These directly reported incidents are just a tiny fraction of the 10,000 identity fraud cases analysed by Experian, from which it has identified ID crime hotspots and victim profiles.
London residents were twice as likely (on average) as others in the rest of the population to experience identity fraud problems. This factor makes London both the capital of the country and ID fraud, according to Experian. Residents in College Gardens in Tooting, south London, were five times as likely to fall victim to the growing crime, which involves fraudsters running up lines of credit or buying goods under assumed names.
Small pockets of high-risk from identity theft - where rates of identity fraud exceed four times the national average - are scattered across the country in areas including Great Cambourne near Cambridge, Far Cotton, Northampton, and Ingleby Barwick, Stockton-on-Tees.
The typical identity fraud victim is aged between 26 and 45, earns more than £50,000 a year and tends to be a homeowner. Higher income earners are three times as likely to fall victim to identity fraudsters. Many victims realised they had been swindled after spotting dodgy transactions on credit monitoring reports.
Fraudster tactics are changing. Fraudsters are making more use of mail redirection services in order to redirect a prospective mark's post to a drop address, an approach used in 36 per cent of cases. Present address fraud, previously the most common tactic, declined to 46 per cent from 30 per cent in the second half of last year. Previous address fraud, a more opportunistic crime where a perpetrator uses a prospective mark's name and previous address, made up a quarter (24 per cent) of cases.
A separate study by Symantec recently noted that identities are been traded online for as little as £5, so the growing prevalence of identity fraud shouldn't come as a big surprise. In most cases, although victims suffer the hassle of reclaiming their identity, financial losses are borne by industry.
Mail order companies were hardest hit in terms of fraud volumes, making 62 per cent of all new cases in the second half of 2007. But financial losses were comparatively low, with the average cost of goods lost coming in at only £219, according to Experian.
Hire purchase providers had far more to worry about, with average losses of £28,424. This means that even though only one in 50 cases dealt with by Experian involved HP purchases the losses to the sector made up almost half (46 per cent) of the total financial losses blamed identity fraud.
Loan providers were also hit heavily by identity fraud, with an average cost per case of £7,556. Credit and store card issuers were also frequently targeted, with losses per case averaging at £1,365.
Experian's victims of fraud dossier (pdf) provides evidence that victims of identity fraud rarely turn to the police for help.
Nine in ten (89 per cent) of frauds reported to Experian in the back end of 2007 had not been reported to the police. Of those that were reported, 64 per cent were still under investigation, while six per cent led to a prosecution. ®