IDENTITY FRAUD - WHAT ABOUT THE VICTIM? MARCH 2006

Introduction

CIFAS is the UK's Fraud Prevention Service and is a not for profit membership association solely dedicated to the prevention of financial crime. As part of that role CIFAS undertakes research to develop new insights into fraud-related offences.

An offence that has been the cause of growing concern for CIFAS in recent years is that of identity theft. It is estimated that identity theft in the UK costs the British economy £1.7 billion annually (Taken from ‘Updated estimate of the cost of identity fraud to the UK economy: 2nd February 2006,’ the Home Office Identity Theft website: www.identitytheft.org.uk)

As part of its commitment to developing a better understanding of identity theft CIFAS commissioned Perpetuity Research & Consultancy International (PRCI) Ltd to conduct a study to assess the impact of identity fraud on victims. It includes a focus on the victims’ experiences, and specifically the process of victimisation and the aftermath, and collects victims’ views on their treatment by the service providers and law enforcement agencies. The study incorporates the findings and makes recommendations that may help to inform future responses to identity theft.

Findings from the CIFAS database of Victims of Impersonation

• Assessing all of the 55,548 victims of impersonation recorded on the CIFAS database as at the end of July 2005, 67 per cent were male and 32 per cent female. The most common age categories were from 31 to 40 years of age (28 per cent) and 41 to 50 (23 per cent); thirteen per cent were over 64 years of age.
• Although most victims lived in London the rate of offence per 1,000 population was more common in Manchester and Nottingham. Victims’ details were most likely to be used to obtain credit cards (50 per cent); however it is worth noting that the database incorporates information from CIFAS Members and may not be representative of all types of organisations.
• Analysis of the CIFAS database and survey respondents supports Newman and McNally’s (2005) conclusion that all persons are potentially vulnerable to identity theft.

Findings from consultation with service providers

• Those helping victims felt that improvements in services could involve: further assessment of applications to detect potential identity frauds and deter offenders; credit agencies working more closely together; and training staff to distinguish the genuine victim from the fraudster.
• One popular idea was to provide a dedicated individual within each organisation to liase directly with the victims.
• The police respondents accepted that the quality of their response to identify theft varies. The factors that will influence this include the force crime screening policy, their own working priorities, the amount of evidence there is and its quality (and that which is provided by the victim is crucial).
• A police interviewee admitted a view that was backed up by victims’ experiences - identity theft cases are often not a high priority even where there is evidence to pursue a case. Often there will be insufficient grounds to pursue an investigation.

Findings from the Victim Consultations

Victimisation

• The survey sample was broadly representative of the victims of impersonation database provided by CIFAS.
• Respondents’ details were most likely to have been used to apply for a store card (56 per cent), credit card (43 per cent) and mobile phone account (35 per cent).
• Over three quarters of victims had experienced more than one offence against them.
• In many cases respondents’ personal details were used to open a number of different accounts, for example to apply for both a store card and a mobile phone account.
• Victims aged 31 to 40 were most likely to be repeat victims.
• In 14 per cent of the cases victimisation involved money being used / removed from respondents’ personal accounts or credit cards.
• Half (51 per cent) of the respondents did not know how documents were obtained, however for 15 per cent their documents or details were stolen and for 13 per cent mail was stolen.
• In 15 per cent of the cases it was known that counterfeit documents were used; however 55 per cent of victims did now know what documents had been used by the fraudster.
• Fraudsters tended to use a number of pieces of documentation including credit or bank cards, driving licences, bank statements, utility bills and passports. It was rare for just one piece of documentation to be used, however when this was the case it tended to be a driving licence.
• In 84 per cent of cases victims did not know the offender. Those that did (11 per cent) pointed to friends and family members especially partners and ex-partners.
• Almost half believed that they had been impersonated on more than one occasion by the same offender.
• Over half of the survey respondents found out they were victims of identity theft after receiving documentation through the post for accounts that they had not opened.
• A quarter of victims first heard about the offences committed against them when contacted by another organisation, invariably the service provider.
• On discovering they had been a victim, or on suspecting that they might have been, most initially reported their suspicions to their service provider (e.g. mobile phone providers, store card providers, banks, building societies, credit card companies and other financial institutions). In addition 58 per cent informed the police and 34 per cent of respondents contacted CIFAS, sometimes after receiving advice to do so.

Institutional Response

• Of those who contacted mobile phone companies, 72 per cent of respondents were content with the service they received, but 28 per cent reported that the response was ‘very bad’ or ‘bad.’ Complaints centred on the fact that they were not kept informed of progress, they had difficulties making contact and they kept receiving bills which should have been stopped.
• When victims were asked how mobile phone companies could improve their performance suggestions included: keeping the victim updated; better co-ordination between departments; better co-ordination between mobile phone companies so that repeat victims do not have to contact every phone company to cancel fraudulent contracts; and better and more staff education.
• 62 per cent of respondents were very positive about the services provided by the financial institutions, this compares to 26 per cent for mobile phone companies. However a quarter of the respondents reported that they received a bad or very bad service from financial institutions.
• When victims were asked how financial institutions could improve their performance suggestions included: keeping the victim updated; safer delivery of cards; being more supportive of and sympathetic to victims (perhaps via the development of a protocol and use of reference numbers for each victim to track progress more easily); more vigilant security and improved investigations; as well as more staff education.
• Repeat victims were less likely to report that they received a positive response from a service provider than those who suffered only one incident.
• Victims had quite different perceptions of the police. Over a third rated their service ‘good’ or ‘very good’ (36 per cent), a third were dissatisfied (33 per cent); and more than a quarter (28 per cent) considered the service adequate.
• Those victims that reported that they received a good response from the police also received a good response from the service provider.
• Only seven of the 212 victims who responded reported that they were aware that there had been an arrest, an impending arrest or a prosecution.
• When victims were asked how the police could improve their performance suggestions included: a quicker response; keeping the victim updated; being more supportive of and sympathetic to victims perhaps via providing information leaflets on where to get help; advising on risks of identity theft; better and more successful investigations; and better communication across forces.
• From the 34 per cent of victims that contacted CIFAS, the perception of the service was very positive; three quarters rated their service as ‘good’ or ‘very good,’ and only four percent rated it as ‘bad’ or ‘very bad.’
• When victims were asked how CIFAS could improve its performance suggestions included: improve the website and permit completion of forms on-line; provide more targeted information; provide access to former victims; and make financial institutions pay for any costs incurred.

Impact

• Rectifying cases of identity theft took anything between making one phone call and six months.
• Over half of the respondents spent less than 24 hours rectifying the situation, 16 per cent took one to two hours and 12 per cent three to four hours. However, for 11 per cent it took longer than a week.
• Although the average amount of time the respondents spent undoing the damage following the theft of their identity was 201 hours, this figure is skewed by the few who reported that it took many months. Based on the inter-quartile range, a victim of identity fraud can typically expect to spend between 3 and 48 hours rectifying the fraudster’s handiwork. This is significantly less than previous estimates derived from experiences in the US.
• About a half of the victims said that their experience had a big impact on their stress and health levels, and slightly more claimed that it caused them great inconvenience.
• Identity theft was more likely to have a big impact on health or stress levels and cause more inconvenience for repeat victims than for those who experienced only one incident.
• Those aged 61 and over were least likely to report that the experience impacted their health or stress levels.
• Levels of inconvenience caused and impact on health or stress levels increased with the time it took to rectify the situation.
• Victims with a high income were more likely to report that the identity theft did not have a big impact on their health or stress levels.
• When asked about personal losses, 17 per cent stated that they had suffered financial repercussions through having to pay for postage, telephone calls, printer ink and travel in contacting agencies about their case and in replacing documentation. Many claimed that it took a lot of time. Assessed in this way presumably nearly all victims could have claimed the same.

Summary

In summary whilst identity theft is a significant issue for the victims, in the majority of cases they were reasonably satisfied with the way they were treated, although less so with the service provided by the police. Often the experience was annoying and could be stressful but it was often possible to deal with the matter quickly. Some though suffered considerably both from being repeat victims, and/or via poor treatment by the organisations involved. However, it is clear that as awareness of identity fraud grows so the response from organisations has sharpened.

What Victims Want

The top 5 changes that victims of identity theft would like to see implemented by the service providers are:

• An individual/personal case worker within each organisation to help victims.
• Keeping the victim regularly informed about progress and what is actually being done to rectify the situation.
• Service providers to be more understanding and sympathetic towards victims.
• Staff to be better trained in how to deal with identity theft victims.
• Better and clearer information on identity theft e.g. if you become a victim, what action you should take to clear your name and where to go to get support.

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