Credit, Collections & Insolvency News
With UK Finance announcing that ‘the level of fraud in the UK is such that it must be considered a national security threat’ independent research by GBG has found that two in three (66%) people in the UK, nearly 36 million consumers, think that businesses are cutting corners when it comes to protecting them from fraud by failing to check and verify people’s identities online. And 65% think this consequently costs businesses more in the long term.
They are right to be concerned with 94% of business leaders, c-suite chief security officers (CSO) and chief information security officers (CISO) surveyed confirming that businesses are indeed cutting corners and opening the door to more identity fraud by not having sufficient measures in place to check and verify identities online.
Despite this, only 34% of UK consumers think the cost of cutting corners is then passed to them. In reality 87% of business leaders confirm that identity fraud costs are passed onto consumers in the form of increased prices. According to the business leaders surveyed, nearly a fifth (17%) of the total cost of identity fraud, on average, is passed on to consumers.
In the last 12 months, business leaders estimate that identity fraud has on average cost their business £398,520, meaning £67,748 of this cost has been picked up by consumers in the form of increased prices. According to CIFAS, 2022 has already seen rising levels of identity fraud with fraud cases set to soar amidst the cost-of-living crisis.
Gus Tomlinson, Chief Product Officer, EMEA at GBG, said “By cutting corners in identity verification, businesses are opening the door to fraudsters to use stolen identities to obtain goods and services by deception. As well as harming their own business reputationally and financially, identity fraud causes huge financial harm and emotional distress, and can negatively impact its victims for years – preventing access to credit and putting them at risk of being chased for fraudulent unpaid debts.”
“More businesses need to put themselves into the shoes of victims and ask themselves ‘how would I feel if I was at the receiving end of this experience?’ and reflect on whether cutting corners is worth the risk.”
“When transacting online, people put their trust in a business and assume that checks are in place to verify a person is genuinely who they say they are. Unfortunately, this isn’t always the case and businesses need to be more transparent about the checks they put in place or risk losing the trust of their customers and incurring higher rates of fraud.”
“One key way to do this is to build ‘positive friction’ into their customer journey with more robust digital identity verification so fraudsters are deterred and consumers have a much better and secure online experience.”