ID fraud levels rocket in 2006
IT industry told that it must do its part to fight the increasingly sophisticated methods that frausters are adopting
Identity (ID) fraud rocketed by 69 per cent in 2006, with card-not-present (CNP) fraud being the most prevalent method, according to the latest research from market watcher Experian.
The research also revealed that London was the ID fraud capital of the UK, with the the top 25 most-at-risk areas located inside the M25.
Mail-order companies were the hardest hit by CNP fraud, accounting for about 60 per cent of total cases, but just 15 per cent of the total financial losses. Credit and store cards accounted for about 28 per cent of the total financial losses.
Gary Wood, managing director of Experian’s fraud and ID solutions business, told CRN: “Fraud is more likely to be carried out by organised crime gangs today than it was in the past. People shouldn’t underestimate fraudsters – it is a business to them and they are relying on more and more sophisticated methods to dupe their victims.”
However, Wood said that about 92 per cent of ID fraud is never reported to the police because victims feel it is not taken seriously enough.
Anne Green, small business consultant at Experian, said that the IT industry can play its part in helping to fight the criminals.
“Fraud is a non-competitive issue and all industry sectors need to work together to combat it,” she said. “Increased data-sharing is a must to allow the organisations that are being targeted to have the widest possible set of data to find patterns. Customers must also be made more aware of the dangers.”
Mark Bowerman, representative for the Association of Payment Clearing Services, said: “Overall, fraud is going down, but CNP fraud is going up. What is needed is a joined up effort on the part of retailers, businesses, the IT industry and consumers to fight these fraudsters. Everyone has a part to play.”
Tony Price, managing director of online reseller WStore, said: “Fraud has always been at a high level, whether it is CNP fraud or using fraudulent accounts gained from Companies House. We see fraud on a daily basis, but the only time we tend to report it is if there is a spate of cards coming from the same address or if it is something we would consider a major fraud attempt. It is just too much hassle otherwise.”
Nitin Joshi, founder of advisory service ChannelMoney, said: “ID fraud has always been in the channel, but the wider economy seems to be more aware of it now. Firms need to invest in the right security systems because chip and PIN is not enough.
Fraud hits channel firms of all sizes, but interestingly enough the vendors keep their cards close to their chest when it comes to the effects on their business.”
Further reading: Find the Experian report here