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Companies told to set up fraud databases

With the number of cases of identity fraud rising sharply in the last year, the Fraud Advisory Panel is urging businesses to set up a database of known and suspected frauds.

Link: ‘Mindless’ identity checks must stop

A report by the ICAEW-sponsored Fraud Advisory Panel: Identity Theft: do you know the signs? revealed that cases of fraud had risen from 27,270 to 42,029, costing the economy £1.3bn a year. On average it takes 300 hours to set the record straight.

As a result, companies should set up a fraud database and explore the potential for sharing data with other companies in their sector and with the public sector to establish a central register of stolen identities.

The FAP also called on the government to clarify when it is lawful for businesses and the public sector to share such information.

Stephen Philippsohn, head of the working group that produced the report, said: ‘Fear of the regulators swooping down is hindering attempts to reduce fraud by means of data-sharing.

‘Many organisations and police investigators are unaware that section 29 of the Data Protection Act allows for certain exceptions to be made to its general principles when personal or financial data is processed for the purposes of crime prevention. This must be made clearer.’

The public are advised not to dispose of ATM slips in the receptacles provided and to consider investing in a home shredder.

The FAP identified four main kinds of identity fraud:

  • Application fraud – where a fraudster applies for payment cards and financial products in the name of his victim.
  • Account take-over – where the fraudster collates sufficient information about the victim to dupe the victim’s bank that they are the victim.
  • Wholesale assumption of the victim’s identity – obtaining false passports and identification documents or using the identity of a dead person, which may result in fraudulent claims for social security benefits.
  • The fraudulent use of a business identity – where a fraudster may use invoices or company stationery to obtain goods and services without paying for them or may create an entirely false trading history.

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