Identity theft has risen 12 percentage points in the past year, now accounting for more than half of all detected frauds .
Experian’s annual fraud report revealed a marked shift in the level of third-party or identity theft – when a victim’s identity is stolen – as a proportion of all detected fraud cases. It’s a trend that has been developing over the past year and now accounts for more than half (52 per cent) of all detected fraud cases.
The switch reflects a return to pre-downturn levels of identity theft when it previously eclipsed first-party fraud.
For retailers, identity theft is proving to be an increasing burden on operations with card ID theft up 14% to £36.7m in 2013 .
It’s predicted that £116bn will be spent online in 2015 . With ever more people using online as their chosen channel to purchase, the issue of card ID theft is only set to get bigger as more sophisticated deception crimes and the use of online attacks such as malware and data hacks continue to threaten the safety of e-commerce sites.
So, what can retailers do to minimise the risks and costs of identity theft to their customers and to their business?
Increase security without compromising your customer journey
In order to combat losses to fraudsters who are using stolen identities, retailers are forced to consider extra security steps. The trick is to ensure that these additional steps do not lengthen and damage the customer experience – if the balance between security and service is not maintained people will simply go elsewhere to get what they want.
In some instances, it is possible to replace existing security measures with newer and more robust methods – security becomes different rather than additional. So, what if a robust layer of security could be added when customers sign-up and check-out one that is transparent and does not involve the collection of personal data?
By analysing the credentials, setup and usage patterns of the devices your customers use to access their accounts you will gain valuable insight. Understanding your customers’ mobile phones, tablets and PC’s and the way in which they are used will help you to spot your legitimate customers and speed them through a fast and friction-free route to purchase. This can all be managed without demanding additional information, asking customers to complete more security procedures, or taking up more of their time.
Layer up checks for added confidence in your customers identities
These two stages need different approaches. For example, a solution based on checking data can give you confidence in the identity of your customer. To be sure that the payment details belong to that individual means further verifying those payment details against their identity.
Ensure identity checks work across all devices
People do not like prolonged and complicated identity checking. They are accessing services through multiple channels; online, via mobile, over the telephone and face-to-face, and they expect the same high level of customer experience across them all. It is vital that the identity checking solutions you use work seamlessly without causing friction across the different channels to purchase.
1 – Experian annual fraud report 2014
2 – Fraud The Facts 2014 – Financial Fraud Action UK.
3 – Capgemini News Blog