London is the capital of the UK for identity fraud, according to Experian, the credit information checking company. Altrincham has become the top location for identity fraud in the UK outside parts of London. The Cheshire town recorded 13 fraud attempts for every 10,000 adults, with residents targeted at over three times the national average (four in every 10,000 adults). This compares with 11 attempts per 10,000 adults for London as a whole although there are areas of the capital with significantly higher rates of ID fraud. Altrincham’s neighbour, Stretford, in Greater Manchester, also appears in the UK’s top ten target location for fraudsters doing identity theft. London as a whole saw 11 attempts for every 10,000 adults, but some inner-city boroughs had significantly higher rates; East Ham recorded 27 fraud attempts for every 10,000 adults in 2012, the highest in the UK, with individuals targeted at almost seven times the national average.
Residents in Romford and Bexleyheath were also targeted at around five times the national average. Other hotspots: the London commuter towns of Hatfield, Dartford and Camberley although the previous rise in fraud in Thames Valley and the Home Counties has slowed overall in 2012.Experian’s Mosaic geo-demographic profiling analysis reveals that victims of identity theft are highest amongst the inner-city ‘Terraced Melting Pot’ group, typically those living in mixed urban neighbourhoods with low to middle incomes. The company also suggests that identity fraud victims are being targeted from more affluent towns in the vicinity of UK major cities such as Manchester, Birmingham and London. These people fall into the ‘New Homemakers’ Mosaic group, and comprise younger couples living in new starter homes on the outskirts of major towns and cities, typically with average incomes and a high demand for credit.
Nick Mothershaw, UK&I director of identity & fraud at Experian, says: “It comes as no surprise that the capital remains a target for third-party fraudsters – particularly around densely populated inner-city boroughs where identities are easier to steal. However, fraudsters are clearly attracted to rich pickings in more affluent areas, where access to an identity might be harder to obtain but the prize makes it worth the extra effort. In this respect, more affluent locations in close proximity to major cities such as Altrincham in Cheshire, Sutton Coldfield in the West Midlands, Hatfield and St Albans by London, have become key targets for identity thieves. Clearly identity theft is not just confined to inner-city areas but is a UK-wide problem and a symptom of tougher economic times, highlighting the need for people everywhere to be increasingly vigilant.”
Mapping first-party fraud
London is still the leading location for first-party fraud with 19 cases per 10,000 adults with East Ham by far the worst with 78 cases per 10,000 adults. First-party fraud has risen in and around major UK cities including Birmingham, Manchester, London and Glasgow, and also in less affluent areas like West Bromwich, with 14 fraudulent applications recorded for every 10,000 adults. First-party fraud is where genuine individuals attempt to change their circumstances or hide adverse financial information to obtain credit which they may not be in a position to afford.
Nick Mothershaw adds: “Our analysis of first-party fraud shows that, generally, it is those on low incomes, with thin or empty credit files, who are attempting to ease their financial position by misrepresenting applications or making exaggerated claims over their income and personal circumstances. However, a significant proportion of first-party fraud is now being perpetrated by the ‘Liberal Opinions’ Mosaic group. Typically these are young, well educated professionals living and working in London and other major cities. “Across the financial services sector as a whole, it is vital that firms and other providers of credit recognise the financial and reputational risks associated with fraud, and put in place increasingly sophisticated identity verification and anti-fraud measures to combat the threat. Fraud prevention and detection tools which allow organisations to detect, monitor and assess risk will help firms identify anomalies within applications and check for signs of adverse credit histories. Individuals also have a role to play fighting the fraudsters by taking steps to protect their personal information.”
Experian’s Fraud Index is based on data derived from National Hunter and Insurance Hunter, the UK fraud prevention systems, operated by Experian on behalf of members. These systems enable financial institutions to cross-match applications against over 100 million previous application records to seek commonalities and anomalies that are potentially indicative of fraud for further investigation.
Notes
First party fraud refers to fraud committed against a financial institution by the real consumer using their own identity. Typically it involves individuals changing their circumstances or hiding adverse financial information in order to obtain credit which they may not be able to afford. Third- party fraud (identity theft) is fraud committed by a fraudster using some else’s details to obtain goods or services. The hotspots identified in the research are where victims of identity theft are located, not where fraudsters originate. The analysis covers first and third party frauds attempted during 2012.
