A new report by FICO has highlighted that nearly 1.9 million Brits may have fallen victim to identity theft and had their identities used by fraudsters to open financial accounts in 2023. This represents a significant decrease from the previous year, when 7.7% of respondents reported being victims of this type of fraud.
The report found that 4.3% of respondents in 2023 had their identities used to open financial accounts, but a further 5.4% think it is “probable” that their stolen identity has been used in this way. According to Sarah Rutherford, senior director of fraud marketing at FICO, the actual number of people who have been victims of identity misuse could be far higher, as many individuals may not even be aware that their stolen identity has been used for financial fraud.
Rutherford also emphasized that the value of the fraud committed with a stolen identity could be considerable, as fraudsters are unlikely to use a stolen identity only once. This type of fraud was found to be the most worrying financial crime for UK citizens, with 30% expressing concern about the misuse of their identity.
The report also highlighted the importance of strong fraud protection measures for financial organizations, as nearly a third of respondents ranked good fraud protection as their top consideration when choosing a new account provider. Additionally, 73% had it in their top three considerations, indicating that consumers prioritize security when selecting financial services.
However, the report also revealed that around 18% of respondents indicated that they would abandon opening a current bank account if identity checks were too difficult or time-consuming. This suggests that financial services firms need to find the right balance between security and ease of service to meet consumer expectations.
Encouragingly, the use of biometrics for authentication was favored by respondents, with 87% stating that it provides excellent security. Fingerprint scanning was the most popular biometric method, with 38% expressing a strong preference for its use, followed by face scan (34%) and iris scan (25%). In contrast, only 17% of respondents believed that username and password provides excellent protection.
Rutherford commented on the shift in consumer attitudes towards biometric authentication, noting that it is positive to see the resistance to the use of new verification tools such as iris, face, and fingerprint scans waning as individuals recognize the benefits.
The report’s findings highlight the prevalence of identity theft and the importance of robust fraud protection measures for financial organizations. As technology and cybersecurity continue to evolve, the use of biometrics and other advanced authentication methods may play a crucial role in mitigating identity theft and enhancing consumer security in the financial sector.