Mail order companies are most likely to be hit by
identity fraud, which rose by 69% last year compared with
2005.
According to research by credit reference agency Experian, mail
order firms were by far the hardest hit in terms of fraud volumes,
accounting for about 60% of total cases.
In terms of financial value, the biggest losses were suffered by
credit and store card issuers. These accounted for about 28% of the
total financial losses, at an average cost per case of £1,548,
while loan providers suffered 19% of total losses at an average
cost per case of £4,797. With an average cost per case of £229,
mail order companies suffered 15% of total financial losses.
Experian public affairs director Peter Brooker said companies
were most likely to accept liability if their customers were
victims of fraud, which made a direct impact on revenue.
However, he said firms were beginning to use more sophisticated
approaches to verify customer identity when applications were
made for credit cards or store cards. These include cross
referencing previous credit applications to check for changes in
other key identifiers such as mobile or daytime telephone
number.
“If they get through all the checks at the application stage,
fraudsters often bide there time for six or nine months and work a
credit card just as you or I would, spending reasonable amounts.
Then they max-out the card and disappear.”
Preventing fraud after the application stage involves using
software packages to detect anomalous spending patterns on cards,
Brooker said.
Consumers could also protect themselves by registering with
agencies such as
Credit Expert, which can alert individuals
when credit checks are made against their names, as occurs
during a credit card application.
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