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The business of identity theft
It’s not just individuals who suffer from identity theft. Research at UCLan
shows that businesses need to take the threat more seriously.
Identity theft it is one of the fastest growing crimes
in the UK which, according to the Home Office
Identity Fraud Steering Committee, costs the UK
economy an estimated £1.7 billion per year.
Anyone can be a victim of identity theft,
described as the theft and use of personal
identifying information of an actual person, as
opposed to the use of a fictitious identity. People
committing the crimes can be located anywhere
across the globe.
Dr Mahmood Shah, a Senior Lecturer in Business
Systems at UCLan, is an expert in the field of
identity theft and fraud. He studied for 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.
Both identity theft and identity fraud can pose
a real threat to the financial health of an
organisation and its business reputation. Many
entrepreneurs are so focused on the basics of
getting a business up and running - and making
a profit - that they neglect to think through
appropriate security measures.
Unfortunately many smaller organisations fail to
fully recover from this type of fraud and many
have ceased trading altogether.
Dr Shah and his research team carried out a
major study to identify the extent of the problem
and losses incurred, not only in the UK but
worldwide. This was followed with a review into
common methods and approaches that
businesses use to address and reduce the impact
of the problem. Much of the fraud in recent years
has taken place within the online retail sector,
with businesses and individuals becoming more
reliant, and seemingly more confident with
e-commerce and online communication.
However, as technology becomes more
sophisticated, so too do the fraudsters. Dr Shah
has been investigating how seriously companies
are taking consumer safety.
“Many organisations bury their heads, or rather
their policies, in the sand, perhaps feeling that if
they inform customers too much about their
procedures 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 online
retailers, Dr Shah’s research team has investigated
the issue of consumer carelessness. “Consumers
are so overloaded with having to remember too
many different passwords and pin numbers that
many don’t take their personal data seriously,” he
added. “They use information close to them such
as a spouse or child’s name, and with the
increasing popularity of social media this
information can be easily discovered. As we have
seen, no one is immune to identity fraud.”
By working with UCLan, online 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
tackling 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 studied the problem
from an international dimension, as this gives UK
businesses collateral to manage the situation and
minimise losses as best they can.
Dr Shah continued: “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; an area we are now researching.
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 additional
products and services. “There is no ‘one size fits
all’ when it comes to identity theft,” Dr Shah
concluded: “Businesses need to take identify
theft as seriously as they take other corporate
social responsibility issues. The very existence of
e-communications is under threat if we don’t
resolve this issue.”
Pictured left: Dr Mahmood Shah, Senior Lecturer in Business Systems.
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