BUSINESS
UK consumers 'banking blindly,' report says
05-08-2005
by Ciara O'Brien
UK consumers are ignoring the danger of identity theft, despite evidence that the fraud is on the rise.
New research from consulting firm Unisys revealed that complacency and poor security education is helping to create ideal conditions for identity theft and fraud, with more than half of consumers unwilling to learn of the risks. one in 10 UK customers have fallen victim to identity theft and fraud, which is estimated to be costing UK businesses STG1.3 billion each year, Unisys claimed.
Yet almost two-thirds of those surveyed by the company had no concerns about the safety of their bank or building society accounts. Surprisingly, offering better security protection wouldn't entice customers to switch bank or building society, with 50 percent content to remain where they are.
The figures may come as a shock, with significant numbers of customers are choosing to bank online. Up to 30 percent of consumers use the internet to check account balances or conduct routine transactions. Men are more likely to use the internet for financial maintenance, with 34 percent choosing to do so compared to 26 percent of women.
Only a third are willing to pay for additional security services and fraud protection; most consumers believe destroying personal information, such as bank statements, will help protect their accounts.
The survey follows a similar study carried out in the US by Unisys found that only 49 percent of US respondents were unconcerned about their cash. A mere 9 percent of UK consumers worry significantly about identity theft, compared to almost twice that figure in the US.
However, some of the blame can be laid at the doors of the financial institutions, with three out of four customers claiming they had never been contacted by the bank to discuss potential fraud. Less than 10 percent had heard of "phishing" -- a practice which involves the use of bogus e-mails and websites to steal personal information. This is despite a recent report from IBM that revealed phishing attacks, which attempt to steal financial details from consumers though bogus webstes, rose by 226 percent in May.
"UK consumers appear to be happy to continue banking blindly, regardless of the threat of identity theft," Nigel Moden, retail banking partner at Unisys. "This laissez-faire attitude not only encourages increasingly audacious and industrial-scale fraud but also translates into millions of pounds being stolen each year from customers in the UK."
The study comes a matter of months after the Honeynet Project reported that bot nets -- which are collections of computers under the control of a person or group -- are increasingly focusing on identity theft. The Honeynet Project was set up to improve security on the internet by recording attacks on monitored systems.
In the US, identity fraud topped the list of complaints made to the Federal Trade Commission in 2004, accounting for 39 percent of fraud reports. This was the fifth successive year that identity theft came out on top of the list, with credit card fraud the most common form of reported ID theft (28 percent) in 2004. This was followed by phone or utilities fraud (19 percent), bank fraud (18 percent), and employment fraud (13 percent).
There have also been a number of high-profile incidences of companies having their data compromised by security breaches. In June, Citigroup made a public apology after it lost personal data for 3.9 million US customers. The information was on computer tapes, which were lost by a courier in transit to a credit office. In the same month, Mastercard admitted that an unidentified person had gained access to the computer of a third-party payments processor, putting some 40 million cards at risk of fraud.
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