Australians lose around $1.4 billion to personal fraud each year and identity crime is one of the fastest-growing forms of fraud in the world.
Research by data analytics company Veda Group shows 41% of people would not know if their identity had been stolen. There has been a 72% increase in the number of identity takeovers in the last year and a 194% increase in the past five years.
To combat this, Veda has launched Knowledge Based Authentication (KBA), the latest feature to its IDMatrix
electronic identity verification service.
KBA is a type of electronic verification which adds an extra level of protection by using “out of wallet” knowledge questions to verify an individual’s identity, said Veda’s Fraud and Identity Solutions general manager Imelda Newton.
“It adds assurance that the person presenting the identity is indeed that person. Questions are generated dynamically and no established relationship with applicants is required.
“The way in which it breaks predictability for fraudsters means it is highly effective in minimizing fraud due to identity theft or takeover.”
Fraud expert Brett Warfield said recent Australian research indicates the most prevalent forms of fraud involve finance service industry employees assuming the identity of customers to raid their bank accounts and term deposits, and employees creating fraudulent loans.
More than 50% of the frauds identified in the Warfield & Associates research had identity crime at their core.
“Whether it is from staff assuming their customers' identities, criminal groups conspiring to steal identities or create false identities, or even individuals misrepresenting their identity, the ability of organisations to know their customers has never been greater,” said Warfield.
“The criminal gangs, in particular, are adept at finding vulnerabilities in identification and authentication processes and exploiting them. Organisations have to be constantly vigilant about managing their risk and developing new methods and processes to mitigate their exposures.”