Understanding the challenges & progress currently being made to help combat fraud in the Financial Services sectors can provide powerful insight for the Telecommunications Industry. The trends seen in other sectors can often shed light on how fraud is/will impact others but may not be as obvious.
Here are four key things Telecoms can learn from the 2014 Financial Services Interim Fraud Report:
1. Identity theft now accounts for nearly half of all fraud cases detected and prevented
Within the financial services, the increase in identity theft (third-party fraud) was most prevalent on products that offered an instant return. This is particularly relevant when looking at the opportunist fraud that can exist when an expensive handsets is purchased on contract, but there is no intent to ever pay. Application fraud prevention continues to be critical for the Telecoms in order to combat those looking for easy money.
2. The rate of detected fraud and proven prevention methods are on the rise
The increase of detected and prevented fraud is not an indicator that fraud is getting worse, rather it is an indicator of the continued and significant progress being made in the fight against fraud. How is your fraud detection rate? Are you seeing an increase in detection? If not, perhaps it’s time to look at how you can boost your referral strategy.
3. The highest rates of third-party fraud was among young, single people in their 20s and 30s who rent from private landlords
The ‘Rental Hubs’, as the demographic is called, show the highest rate of third party fraud accounting for almost a fifth of all detected fraudulent applications. While that’s not to say we can’t trust Rental Hubs with handsets and contracts, this insight can help to identify demographics which can flag as higher risks for the Telecoms and therefore need a referral strategy to mitigate any increased risk.
4. First party fraud is on the rise in Greater London’s wealthier neighbourhoods and leafy commuter towns, like Dorchester & Farnborough
Latest fraud statistics continue to show the highest rates of first party fraud in concentrated inner-city areas and the trend is unlikely to change, however we are seeing an increase of fraud in areas that aren’t as expected. This trend highlights the need for a robust strategy that doesn’t just target those we expect to pose a higher risk but also those we don’t.
Fraud continues to be a serious threat to both consumers as well as businesses however it’s not all doom and gloom. With better fraud prevention systems available and proactive approaches by companies to create multi-layered strategies, we continue to see an increase in detection and prevention. Fraudsters won’t stop but they will change, so we need to ensure we have the necessary protection against them and for our customers.
To see what else you can learn, download the full Interim Fraud Report and get up to date with the latest fraud statistics