Callcredit Blog

Reducing fraud in the digital age

Fraud & Verification

shutterstock_348800891The amount of data held online on the British population is growing exponentially year on year, making it easier than ever for the fraudster to obtain information that can then be used to commit a wide spectrum of fraud.   Consumers are increasingly vulnerable to these attacks with ONS figures showing that there were more than 5.8 million incidents of Cyber Crime in the 12 months between late 2015/early 2016 and fraud now costing an estimated £193 Billion per year in the UK.

The fight against fraud is an ever changing landscape and new technologies are constantly being updated and reviewed to respond to the ever-growing and evolving nature of this threat.  As fraudsters become more sophisticated in their attempts to obtain personal information from individuals to enable them to steal identities, it is becoming more and more difficult for you to identify potential fraud early in your relationship with the consumer without making it difficult to apply for services online.  As a result it is clear that robust fraud prevention strategies are the only way to address this threat and protect the consumer.

Consumers are unwittingly aiding the fraudster and making themselves vulnerable to fraud, but government and private organisations are equally vulnerable

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A Callcredit Information Group survey of *3,000 UK-based consumers found that nearly two thirds (66%) cite the risk of identity theft or online fraud, and risk of their data being lost (46%) as a concern.  Yet, many members of the public are still inadvertently aiding fraudsters by not following simple steps to protect themselves.  Less than half surveyed (49%) regularly change their password and only two thirds (65) use a highly secure password.  Independent research has also shown that, 73% of individuals have a password set which is duplicate to another account, meaning that once a fraudster has gained access to one account it becomes much easier for them to access multiple accounts to obtain data relating to an individual or fraudulently apply for good and services in their name.

As fraud defences become more sophisticated, fraudsters are focusing more on social engineering to attain the perfect ‘fraud tool kit’ of good data, good credit profile and no adverse footprints. In the industry we often hear them referred to as ‘clean skins.’ As a government or private organisation you are equally vulnerable. The recent spate of high profile data breaches demonstrating just how important it is to ensure that appropriate fraud defences are put in place to not only protect a consumer’s personal data, but also to ensure that any individual you are interacting with is who they say they are.

Outwit the fraudster with the latest fraud technology and a layered fraud prevention strategy

The latest technology in fraud prevention provides many effective methods of approaching these challenges by using sophisticated techniques such as document verification, phone and email risk assessment, device recognition and verification of bank or card details. But it is crucial to develop a layered fraud prevention strategy to ensure the genuine consumer is able to apply and be accepted for services online with minimal disruption within the process.  Such a layered strategy works by ensuring the lowest risk applications are identified quickly and accepted with a minimal number of identity and fraud prevention checks performed.  Higher risk applications are then processed through an additional range of fraud checks which can highlight anomalies or inconsistencies.

As fraud increases on a global scale it is clear that government divisions must keep one step ahead of the game when identifying fraudulent applications.  A layered strategy such as this will help to ensure that the fraud is prevented before it becomes a significant cost to the business and that the genuine consumer has a great experience and is approved quickly.

If you would like to discuss this in person I will be speaking at the GovNet Fraud & Error event on the 21st of Feb.  We will also be on stand number 3.

Author: Mel Cameron, Senior Technical Sales Manager, Fraud & ID

Research methodology

*Unlocking the potential of personal data is the first research project commissioned by Callcredit Information Group, working with London-based research agency, Loudhouse. 3,000 UK consumers completed an online survey about sharing personal information in July 2016.

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