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Identity fraud is one of the crimes of the moment. We hear lots about it in the press, whether it’s advice to shred documents at home or about financial institutions giving the thieves a helping hand via their rubbish bins.
But research shows that this isn’t an entirely random crime. The identity thieves, rather like car thieves, know where the best pickings are to be had, and the results may prove surprising.

Wealthy Londoners are the most common victims of identity fraud.

Experian, best known as a credit reference agency but also a global information solutions provider, has revealed the results of extensive research into the victims of identity fraud. It turns out that the likeliest victims include the wealthiest and the most successful homeowners, as well as those living in rented accommodation

Geographically, London is overwhelmingly the identity fraud capital of the UK. The risk of becoming a victim of fraud for a Londoner is more than four times greater than the UK average. Residents of Kensington are the most at risk, being almost five times more likely than the average to become a victim of identity fraud.
If you thought that cunning devices attached to ATMs or the internet were the most likely places to have your identity stolen, you may be shocked to discover that the most common form of identity fraud is for the perpetrator to misuse someone’s previous address.

And it is credit and store card issuers that are the hardest hit financial organisations involved.

The results of this research have been published in the Experian Victims of Fraud Dossier. The study sought to highlight identity fraud trends by analysing the experiences of 4,000 victims who had been helped by Experian’s free Victims of Fraud service and by CreditExpert.co.uk, Experian’s online credit monitoring service, which enables members to spot any attempted identity fraud very quickly.

More than half of all victims fall within the 30–50 age group and are almost equally male and female. Experian analysis shows that the likeliest victims include the wealthiest and the most successful homeowners, as well as those living in rented accommodation.

The groups at most risk of ID fraud include: privately-renting, high-flying graduates; thriving young couples with children and high outgoings; young singles in shared, rented accommodation earning reasonable wages; extremely successful people from very wealthy households; and high income earners living in premium-price city residences.

Of the 54 UK areas classified as being very high risk, 34 are within the M25 and 20 of those are in London itself.

In 82 per cent of identity fraud cases recorded by Experian, the crime was not reported to the police. Of those cases that were reported, at the time of undertaking this research, only seven per cent had led to a prosecution; 29 per cent of cases reported to the police were not pursued.

The most popular modus operandi for fraudsters over the past four years has been the fraudulent use of the victim’s present or previous address. The first is where the victim’s details are used by someone living at the same address or the fraudster places a postal redirect on the address; the second involves the fraudster using the victim’s name and their previous address to take advantage of any credit history that has not been transferred to a new address.

In most cases of identity fraud, although there is a cost to victims in terms of distress and time spent reclaiming their identity, most people do not suffer a direct financial loss as a result of a fraud being perpetrated in their name – the financial loss is borne by the companies involved. Despite this, people often discover they have become a victim while making an important credit application, such as to buy a house or a car, and this can result in significant inconvenience, especially if the deal is delayed or falls through.

Hardest hit financial organisations in terms of volume are mail order companies – more than 60 per cent of all fraudulent accounts identified during the 2005/06 financial year by Experian were mail order accounts. However, in terms of actual value, the biggest losers were credit and store card issuers, who suffered approximately 35 per cent of the Experian-identified fraud losses during that 12-month period.

In terms of the average cost per fraud case, hire purchase and personal loan accounts are worst affected, with an average loss of £10,200 per HP account and of £7,019 per loan account between April 2005 and March 2006. Telecoms and mail order companies fare much better, with average losses per victim of £195 and £253 respectively over the same period.
Experian company CreditExpert.co.uk encourages people to help protect themselves against identity fraud by taking extra care with their sensitive personal information. For instance, no personal information, let alone secret data such as passwords or PINs, should ever be divulged to unsolicited emailers or callers. People should be especially careful if they have had a burglary or if their wallet has been stolen. Personal documents should always be shredded before being thrown away.

Another important measure people should take is regularly checking their credit report, preferably using a monitoring service such as CreditExpert. This enables people to quickly spot any unfamiliar activity on their credit report, such as a fraudulent loan application, and to notify CreditExpert immediately so that they can help sort it out. CreditExpert members also receive an alert by text or email when something significant changes on their credit report, such as a lender carrying out a search following a new application for credit.

Jill Stevens, director of consumer affairs at Experian, says, “The Victims of Fraud Dossier is the first major project of its kind. We hope it will provide everyone concerned with a better understanding of identity fraud, the crime and its victims.

“The information willingly given to us by those people we have helped through our free Victims of Fraud service has enabled us paint a startling picture of identity fraud today.

“It takes an average of 450 days to discover you’ve been the target of identity fraud and you can then face up to 300 hours putting the record straight, so it makes sense to take every precaution. If you do become a victim, you can remove a lot of the hassle by contacting our Victims of Fraud team. They will give you expert advice and help you mend the damage caused by fraudsters.

“It is important that people take steps to minimise the chances of becoming a victim of identity fraud. Checking your credit report regularly through a service like CreditExpert is a simple way of making sure nobody has hijacked your credit history.”