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Portrait of a fraud victim

From one extreme to another, the individuals targeted by fraudsters range from tech-savvy consumers to the digitally excluded and struggling low-income families. Amber-Ainsley Pritchard investigates which demographics are most affected



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Struggling families are becoming the prime targets of financial fraud, according to research from credit reference agency Experian.

 

In April this year, Experian found struggling families are typically in their 20s and 30s, have very low incomes, or are unemployed or in low-skill and low-wage jobs. The company said they usually rent their homes from a social housing landlord and have very limited savings, investments, pensions or retirement provisions.

 

Experian said this vulnerable group represents more than four million people in the UK and have experienced the highest growth rate in fraud between 2014 and 2016.

 

It said criminals are recognising these families are often dependent upon credit and loans, and likely to make several credit applications per year, and are using this intelligence to their advantage.

 

At the opposite end of the scale, households with high salaries, large disposable incomes and accruing assets remained another priority target for fraudsters. This group accounted for 35 percent of all identity fraud in 2016.

 

Further research from Experian last year found that tech-savvy consumers are more likely to be victims of ID fraud compared to other, less technologically-literate users.

 

It found consumers who spend the most time on mobile devices and social networks made up almost a quarter of all ID fraud victims in 2015.

 

Mothershaw said: “Those who embrace technology most enthusiastically make tempting targets for ID fraudsters, even though one might assume that tech-savvy users would be more aware of security risks and safeguards.”

 

Experian carried out research into people’s attitudes and use of technology and data in Britain which combined consumer surveys, together with measurement of web traffic and geo-demographic databases.

 

It was conducted using Mosaic Digital, a consumer classification technology that enabled Experian to build consumer profiles.

The research split the population into three levels of engagement with the digital world and then split all three groups into a total of 11 different types of users – Experian classed these user groups as “tribes”.

 

As for the three level of engagements, they were split into the following groups:

  • The ‘Digital Dawdlers’ thought to be part of the population being left behind in the digital revolution, either because of old age or lack in know-how of technology.
  • The ‘Digital Devotees’ who are said to be leading-edge users of digital technology. They have the most devices, spend more time on-line and use digital services for the widest range of activities.
  • The ‘Day-to-Day Doers’ are defined as practical day-to-day users of the internet and digital services with an enthusiasm for the latest technology.

Experian said the two most popular tribes targeted by fraudsters were as follows:

  • Mobile City: Members of diverse urban communities who are avid users of social media and mobile with their key channel of communication being smartphones.
  • Beyond Broadband: Older and retired households enjoying life in isolated rural areas beyond broadband with limited interest in technology using more traditional communication channels such as phones or personal computers.

These results echo the contrasting findings of Experian’s study, which found both low and high-income families the prime targets of financial fraudsters.

 

Beyond these reports, others indicate the age groups affected. As pointed out on p22 by John Marsden, head of fraud and identity at Equifax, the Cifas 2016 Fraudscape Report shows that most victims of identity fraud tend to be male and the majority of victims are aged between 31 and 50 years. While there was a 34 percent increase of impersonation fraud for those under 21, this was still only a small portion of reported frauds.

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