Nine per cent of smartphone users in the United Kingdom, as many as 5.7 million people, have fallen victim to identity fraud in the last 12 months, according to research by digital identity firm GBG.
GBG’s State of Digital Identity Report 2022 reveals young adults aged 18-to-24 were hardest hit with 18 per cent becoming victims of identity fraud compared to nine per cent of 45-to-54-year-olds, and just three per cent of consumers aged 55 and over.
The GBG research also uncovered high levels of anxiety, with a large majority of the Brits surveyed worrying that becoming a victim of identity fraud is inevitable. Virtually all (93 per cent) of respondents (94 per cent of 18 to 24-year-olds) felt concerned they will fall victim to fraud in the future.
According to the GBG report, among those British consumers personally impacted by identity fraud:
- 44 per cent had their bank account accessed and money taken;
- 28 per cent had their credit card/bank account stolen and used;
- 23 per cent had their name used to open new credit card/bank account;
- 19 per cent had a new utility account opened in their name;
- Five per cent had their mobile phone number stolen and cloned; and
- Four per cent 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 in the UK, France, Germany and Spain. The report revealed identity fraud is a major concern across Europe – with nine per cent of consumers across the continent also being hit in the last 12 months.
More than two in five (42 per cent) of European businesses surveyed said they had experienced known or suspected attempted fraudulent activity in the past 12 months, with 33 per cent saying it had increased compared to last year. Those experiencing a known or suspected fraud attempt said the average transactional value of a breach was £16,000. While one quarter (25 per cent) claimed each fraud breach cost their business between £10,000 and £35,000.
Despite this, almost a third of businesses (31 per cent) don’t use technology to verify the identity of consumers, leaving them at heightened risk of identity fraud. 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.
“By accurately identifying and authenticating an individual, businesses can stop fraudsters in their tracks and consumers are actively looking to businesses to protect them,” Gus Tomlinson, chief product officer, EMEA at GBG, said. “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 66 per cent of European consumers signed up to at least one new online account in the past 12 months, with 67 per cent doing the same in the UK. When signing up for a new account, consumers think it’s important that the process is easy (99 per cent), secure (98 per cent) and quick (97 per cent).
“It appears that many consumers are now more than willing to ditch a brand if they have a poor onboarding experience,” Tomlinson sdded. “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.”
“The modern consumer demands a smooth onboarding experience and expects to be able to transact online securely. It’s all about finding that balance between fraud prevention and friction online. 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.”