Research from high-street bank Lloyds shows that people are becoming more worried about the dangers of identity theft and that the recession has made them feel worse.

The report revealed that 76% of adults are currently worried about identity theft and furthermore, that 39% feel more at risk now than they did six months ago, with the recession playing a major part.

Some 52% of those worried about ID theft believe that the recession has increased the risk, mainly because they argue that as unemployment increases, more people are driven towards criminal activity and ID theft.

And a considerable 57% of the people questioning think that social networking such as Facebook, have made it easier to steal personal details. In the same survey carried out 12 months ago, it was 47% who felt the same, so there has been a considerable rise in fear in the implications of being listed on popular social websites.

And although as many as 38% of Brits have experienced ID fraud (some 18% directly), of those asked, an incredible 57% admitted that they have not done enough to protect themselves and 25% don’t know much about it all anyway.

This is despite the fact that studies by the UK’s Fraud Prevention Service, CIFAS, shows that it takes an estimated 48 man hours to repair the damage resulting from fraud, with the cost to victims is frequently as high as £8,000. The CIFAS figures also show that ID fraud is on the increase, with a 15% rise over the year.

And like many other financial institutions, Lloyds TSB is trying to make its customers aware of the dangers.

Jatin Patel, spokesperson for Lloyds TSB, said:
“As technology improves, it gets easier and easier for criminals to steal our identities and during tough economic times the temptation becomes greater. Protecting ourselves by shredding documents and protecting passwords is a good start, but having someone else keep an eye on your ID offers extra peace of mind.”

By someone the spokesperson means Lloyds TSB and they have introduced what they call ID Aware, claiming that it allows customers to keep on top of their credit status and safeguard their identity, providing credit monitoring services and an early warning system to alert the customer to any activity involving their account, including someone trying to lighten it with suspicious cash withdrawals.

They don’t mention if there is a cost to such a service, but with talk of banks trying to make their customers more responsible for their actions when it comes to their financial affairs (i.e. the banks are going to stop stumping up for this kind of fraud shortly), then this might be a way for a customer to insulate themselves against the worse.

Guest Article by Neil Camp

According to Financial Fraud Action UK, the snappy title of the body known as the voice of the industry for financial fraud matters (previously known by a worse non-de-plume, APACS3), says its latest report paints a picture of first the good news, then the bad.

The findings, drawn up in conjunction with The UK Cards Association and the Cheque and Credit Clearing Company, show that card fraud losses are down 23% to £232.8m in first half of 2009 (compared with same period last year); there’s been a first ever fall in card-not-present fraud losses; and, cheque fraud losses down 26% to £15.6m.

The bad news comes in the online banking fraud losses which show a rise of 55% to £39m.

The actual fraud to turnover rate on debit and credit cards amounted to 0.1% in the first half of 2009, meaning that only around a tenth of a penny is lost to fraud in every £1 spent on cards.

Katy Worobec, Head of Fraud Control, said:
“These latest fraud figures are good news but we know there’s no room for complacency. Whilst industry online security initiatives such as Verified by Visa and MasterCard SecureCode may be making their presence felt, the fraudsters are never going to shut up shop and, of course, there are emerging areas such as online banking fraud which has risen again.

“Although it’s difficult to prove, we think that one of the reasons for this dip in card losses may simply be as a result of fraudsters realising that they can prosper more by targeting foreign-issued cards – particularly those without chip and PIN protection and which currently have stronger currencies than sterling. The fact that we’ve seen a 36% increase in the first half of this year in the amount of fraud being committed on foreign issued cards here in the UK adds some weight to this theory.”

Helping the successful trend was a special police unit sponsored by the banking industry to stamp out organised card and cheque fraud across the UK. Known by the initials DCPCU, the Dedicated Cheque and Plastic Crime Unit is believed to have helped save around £13 millions of fraud in just the first six months of the year. This is in addition to the £315 million in fraud savings to the industry as a result of the DCPCU’s work since its launch back in 2002.

Other factors of course have also played a part, not least Chip and PIN which say Financial Fraud Action UK has undoubtedly continued to make it more difficult for fraudsters to commit fraud on our cards in the UK. This has resulted in losses at UK retailers down by 26% from the same period last year. Mail non-receipt fraud fell by 33%, and lost and stolen card fraud is down by 6%, its lowest level since 1991 when the industry collation of fraud losses began. Furthermore, the banking industry is continuing to work closely with retailers to raise awareness of the ways in which retailers can protect their Chip and PIN terminals from criminals.

The growth in the use of MasterCard SecureCode and Verified by Visa (online payment systems that make cards more secure when shopping on the internet), by both online retailers and cardholders has helped cut losses from phone, internet and mail order shopping fraud. They have fallen for the first time ever and now stand at £134 million. Another reason for this drop has been the increasing use of sophisticated fraud screening detection tools by retailers and banks.

Fraud abroad has also dropped, mainly because financial institutions are now more aware of unusual spending habits, which means a transaction is refused before it potentially becomes a fraudulent act.

A decline in the use of the cheque was one main reason why such fraud losses during January to June 2009 decreased from £21.2 million to £15.6 million, a drop of 26%. The majority of fraudulent cheque payments get stopped when the cheque is paid, thanks also to the financial industry’s tighter controls.

In amongst the general back slapping there was a bit of bad news, with a 55% rise in online banking fraud losses which totalled £39.0 million during the six months to June 2009.

This increase is due to criminals employing more sophisticated methods to target online banking customers through malware attacks. These target not the financial institutions’ own systems (far more difficult to broach nowadays), but go for the weak part in the chain, the customer. And there has also been more than 26,000 phishing incidents (bogus emails seeking personal details for fraudulent use) during January to June 2009. This represents a 26 per cent increase on the amount seen in the same period last year.

The financial industry, say the Financial Fraud Action UK, continues to do its utmost to raise awareness about the importance of having up-to-date anti-virus and anti-spyware software. It is working with PCeU – the Metropolitan Police Service Police Central e-Crime Unit – which was established to co-ordinate the law enforcement approach to all types of e-crime. It also provides a national investigative capability for the most serious e-crime incidents.

Guest Article by Neil Camp

Starting today (12 October, 2009) is National Identity Fraud Prevention Week and the seven-day awareness period has kicked off with research revealing ‘shocking’ statistics for businesses and individuals.

The National Identity Fraud Prevention Week is an annual awareness drive and this year the emphasis is on warning Britain’s businesses of the risk identity fraud poses to them, their employees, their customers and their suppliers.

Research shows that one third of small and medium-sized businesses have been impacted by fraud. Furthermore, that British consumers are also experiencing a crisis in confidence, with only 3% feeling completely confident the organisations they deal with handle their personal data responsibly.

In response, the partners in the National Identity Fraud Prevention Week initiative have published a 28-page, free guide for businesses, including the launch of a dedicated online resource centre, outlining the risks and offering tips on how to keep corporate data safe, and advice on how to overcome a breach should one occur.

The main research findings reveal that only 64% of businesses have put in place a clear policy on how to handle documents with sensitive information. And nearly one-third (32%) of employees admit to always throwing sensitive documents directly into the bin. This is ironic, given that 64% of employees believe that documents discarded into bins are a bigger risk to customer details than computer systems, or document theft.

And generally, 71% of UK employees think their companies should do more to ensure confidential documents are handled in a responsible manner which does not open up people to fraud. The UK is not alone in this, with employees throughout Europe thinking the same (66% of Germans, 70% of Belgians, 61% of Dutch and 85% of the Irish).

Figures from the Government paint a pretty poor picture, with identity fraud costing the UK economy over £1.2 billion annually, sometimes with terrible consequences on those businesses which are effected.

But of course it’s not only businesses which are affected. Figures from UK’s Fraud Prevention Service, CIFAS, reveal that so far in 2009, some 60,000 UK residents have already fallen victim to ID fraud this year. And this represents a 36% increase over the same period last year.

Given this situation, it’s still hard to believe say the people behind National Identity Fraud Prevention Week, that 44% of Britons do not shred documents containing sensitive information before placing them in the bin. Furthermore, only 54% of them routinely check their financial statements, just 45% follow-up missing post and 69% report lost, or stolen documents.

Supporters of this year’s campaign are the Association of Chief Police Officers, Metropolitan Police, Fellowes, the National Fraud Authority, the Federation of Small Businesses, Equifax, CIFAS – The UK’s Fraud Prevention Service, Callcredit, Experian, the Home Office’s Identity and Passport Service, the British Chambers of Commerce, the British Retail Consortium and the Royal Mail.

Guest Article by Neil Camp