Identity theft costs the UK economy an estimated £1.7bn per year according to the Home Office Identity Fraud Steering Committee and there is no denying that it is one of the fastest growing crimes in the UK. Identity theft can be described as the theft and use of personal identifying information of an actual person, as opposed to the use of a fictitious identity.
Identity theft can range from somebody using someone else’s credit card details illegally to make purchases over the internet or telephone; from having an entire business identity assumed by another person; to opening bank accounts and taking out loans; from making tax returns to conducting other business illegally in a company name. Anyone can be a victim of identity theft and the people committing the crimes can be located anywhere across the globe.
Both identity theft and identity fraud can pose a real threat to the financial health of an organisation and its business reputation. Unfortunately many smaller organisations fail to fully recover from this type of fraud and a number cease trading altogether.
UCLan has been working in the field of crime prevention since 2004 when the Crime Solutions initiative was launched to provide knowledge, support and expertise for those fighting crime in the business community. Co-ordinated by UCLan and in partnership with the University of Portsmouth, the initiative received funding from the former North West Regional Development Agency, the Higher Education Funding Council for England (HEFCE), and Government Office North West. As a result, 50 business-led projects were funded and the Crime Solutions initiative was designated a HEFCE Centre for Knowledge Exchange for the anti-crime sector.
This initiative led on to a European Regional Development Fund (ERDF) project which partnered UCLan and Bolton Metropolitan Council to support small businesses in the North West in reducing the impact of crime on their business and future development. Businesses were assisted in low-cost and easy to apply methods of crime prevention together with the development of several business-watch groups and cluster networks. As a result, more than 120 regional jobs were reported to be safeguarded, along with £13m worth of increased sales and more than £9m sales.
UCLan’s Crime Reduction Unit continues to lead the way and has recently delivered a number of UK-wide workshops on freight crime, a problem which is estimated to cost the UK economy up to an additional £250 million per year. Supported by funding from the Economic and Social Research Council (ESRC), organisations have been brought together to discuss the range and scope of road freight crime, culminating in an inaugural conference held in January 2012.
Dr Mahmood Shah, a Senior Lecturer in Business Systems at UCLan, is an expert in the field of identity theft and fraud. He took his PhD in e-banking and security and he has advised many businesses, consumers and policy makers about the impact of identity fraud and prevention strategies, not only on the individual or the business, but on the UK as a whole.
Research at UCLan began with identifying the extent of the problem and losses, not only in the UK but worldwide. This was followed with a review into common methods and approaches businesses use to address and reduce the impact of the problem. Much of the fraud in recent years has taken place within the on-line retail sector, with businesses and individuals becoming more reliant, and seemingly more confident with e-commerce and on-line communication. However, as technology becomes more sophisticated, so too do the fraudsters.
Dr Shah has been investigating how seriously companies are taking consumer safety. He doesn’t feel it is top of the agenda: many organisations bury their heads, or rather their policies, in the sand, perhaps feeling that if they inform customers too much about their policies on identity fraud, consumers will lose confidence and stop doing business with them. This is a risk in the current climate that organisations are not willing to take. However, Dr Shah argues, being open about this issue can actually help increase buyer confidence and educate the consumer in the part they need to play in protecting their identity.
Working with one of the largest UK-based on-line retailers Dr Shah’s research team has investigated the issue of consumer carelessness. He comments, “Consumers are so overloaded with having to remember too many different passwords and pin numbers that many don’t take their personal data seriously. They use information close to them such as a spouse or child’s name, and with the increase of social media this information can be easily found out. As we have seen, no one is immune to identity fraud.”
By working with UCLan, on-line retailers and other companies who handle sensitive data can implement strategies and policies to inform the consumer of the issues. This is one way of tacking the fraudsters. Dr Shah has also seen evidence of organisations working together to look at best practice models across sectors.
The research team has also been studying what is happening internationally, as this gives UK businesses collateral to manage the situation and minimise losses as best they can. Dr Shah adds, “This issue is not going to go away, and in some cases it is getting worse through the issue of internal fraud and the selling of data. This is an area which we are currently working on. Businesses that handle sensitive data need to ensure recruitment and monitoring policies are in place to prevent and tackle this growing issue.”
Research has shown that in countries such as France and Germany, businesses frequently use third-party interventions that are better equipped to handle secure information.
Dr Shah understands that this may not be an option for some UK companies as it may deprive them of the data they use to sell more products and services. However, Dr Shah feels strongly that “the very existence of e-communications is under threat if we don’t control this issue. Businesses need to take identify theft as seriously as they are taking other Corporate Social Responsibility issues.”
Research team includes:
Dr Matthias Meckel, Romanus Okeke, Ahmed Usman and Sandeep Sadyamarayan.