Young the biggest victims as ID fraud hits 5.7 million

Nearly one in ten smartphone users in the UK, as many as 5.7 million people, have fallen victim to identity fraud in the past 12 months, with those aged 18 to 24 the hardest hit as Brits fear that becoming a victim of fraud is inevitable.

So says GBG’s State of Digital Identity Report 2022, which reveal that almost a fifth (18%) of young adults were victims of identity fraud compared to 9% of 45-to-54-year-olds, and just 3% of consumers aged 55 and over.

The research also uncovered high levels of anxiety, with a large majority of the Brits surveyed worrying that becoming a victim of fraud is inevitable. Some 93% of respondents (94% of 18 to 24-year-olds) felt concerned that they will fall victim to fraud in the future.

According to the GBG report, among those British consumers personally impacted by identity fraud, 44% had their bank account accessed and money taken; 28% had their credit card/bank account stolen and used; 23% had their name used to open new credit card/bank account; 19% had a new utility account opened in their name; 5% had their mobile phone number stolen and cloned; and 4% had a new loan taken out in their name.

The research, conducted by Censuswide on behalf of GBG, surveyed both consumers, that own a smartphone, and business leaders across Europe – UK, France, Germany and Spain – revealing that fraud is major concern across the continent, with 9% of EU consumers also being hit in the last 12 months.

Almost half (42%) of European businesses surveyed said they had experienced known or suspected attempted fraudulent activity in the past 12 months, with 33% saying it had increased compared to the previous year.

Those experiencing a known or suspected fraud attempt said the average transactional value of a breach was £16,000, while a quarter (25%) claimed each fraud breach cost their business between £10,000 and £35,000.

Despite this, almost a third of businesses (31%) do not use technology to verify the identity of consumers. As a result, firms are putting both themselves and consumers at risk of fraud, including the growing threat of increasingly sophisticated fraud attempts such as social engineering, SIM swap and synthetic fraud.

GBG EMEA chief product officer Gus Tomlinson said: “By accurately identifying and authenticating an individual, businesses can stop fraudsters in their tracks and consumers are actively looking to businesses to protect them. There is a real opportunity for businesses to step up – to not just see fraud as just a threat but as an opportunity to build trust, better protect their customers and business, and grow their customer base.”

The report reveals that around two thirds (66%) of European consumers signed up to at least one new online account in the past 12 months, with 67% doing the same in the in the UK.

The research reveals that when signing up for a new account, consumers think it is important that the process is easy (99%), secure (98%) and quick (97%).

Tomlinson said: “It appears that many consumers are now more than willing to ditch a brand if they have a poor onboarding experience. Most people in the UK, and indeed across Europe, have signed up for goods and services online over the past few years but the fact that so many consumers have opened completely new accounts in the past 12 months may indicate that we’re witnessing ‘The Great Switch.’ With people spending increasingly more time online, they’ve begun to re-evaluate if they’re getting the best service possible – or whether it’s time to try a new provider.”

Consumers now demand a smooth switch-over experience, Tomlinson claimed, adding that they expect to be able to transact online securely. It’s all about finding that balance between fraud prevention and friction online.

He concluded: “By understanding more about digital identities, layering the right data and having the best technology in place, companies can keep consumers safe in a digital world and keep up with evolving consumer expectations.”