Whatever you do in life and no matter how careful you are with your personal details, it can happen to everyone: the theft and misuse of your identity. Like Alf Göransson, chairman of the board of the Swedish security firm Securitas. He didn’t find out his identity had been stolen until the court in Stockholm declared him personally bankrupt. It emerged his personal details had fallen into the hands of criminals and they used them for months, undisturbed. It wasn’t until a loan taken out in Göransson’s name was not paid off that the theft came to light.
Identity theft on the rise
How exactly these criminals got hold of Alf Göransson’s personal details is not clear. But what is clear is that he’s not the only person to experience this. Around the world, the theft and subsequent misuse of personal details are on the increase. In 2016, 15.4 million Americans were hit by identity theft. That is 2 million victims more than the year before. They suffered losses to the extent of 16 billion dollars. It’s a major problem in Europe too: in 2017, 5.7% of adult Dutch people were a victim of identity fraud one way or the other. In 2015, the figure was 3.4%. In England, about 90,000 cases of identity theft were registered in the first half of 2017. Most of them took place on the Internet. Criminals pose as someone else in order to steal money, buy goods or to take out car financing or car insurance.
Undetected for a long time
A lot of people don’t even realize they are victims of identity theft. Often, they don’t find out until the bank or credit card company contacts them about ‘suspicious account activity’ or when amounts are debited that look unfamiliar. In other cases, the theft is not discovered until people start receiving unexpected invoices or demands. Sometimes, there are months between them.
Car insurance taken out with stolen identity
In England, nearly 2,500 cases of identity theft in connection with motor vehicle insurance were discovered in the first half of 2017. The year before, that figure was less than 100. This sharp rise may indicate that insurers have improved their risk detection methods but that the number of attempts is also rising sharply.
In the past, an applicant often manipulated his own details to try and get (cheaper) insurance. These days, a lot of fraudsters use potential ‘gaps’ in the checks conducted by insurers. They pose as ‘regular drivers’, whereas the policy is in the name of a completely unknown yet existing person who resides in a low-risk area, a person whose personal details have been stolen. It may take a long time for the fraud to come to light and in the case of a loss event, the unsuspecting policyholder has a big problem.
A fairly new phenomenon that has been detected in various countries is false car insurance sold via a ghost broker. So-called insurance brokers offer cheap car insurance, often via social media. The policies are often obtained from legitimate insurers using false details and are then edited and sold. The owner of the vehicle thinks he is insured but he does not appear in the register of the insurance company. In the case of a loss event, the consequences can be dramatic.
Information easy to obtain
In order to be able to carry out this kind of fraud successfully, criminals need personal information such as name, date of birth, address, bank details, passport number and credit card details. It is quite easy to get those details and there are various ways to go about it. Using the mail box, for instance. They steal post from the bank and copy the details. By hacking e-mail or by buying stolen personal details on the Dark Web. Some people do make it very easy for criminals by sharing every detail of their private lives on social media. There are known cases of people who became victims of identity fraud after proudly sharing a photo of their new credit card on Facebook, Twitter or Instagram.
Quick acceptance demands automated screening
A lot of car insurance is taken out online. The applicant expects an immediate decision about the acceptance and wants to receive confirmation of that there and then. From a commercial point of view, the company wants to comply with this. With such speed and commercial pressure, there is a high risk of certain screening steps being skipped. With a well-organised automated risk analysis and fraud detection, the chances of fraudsters getting into the portfolio become considerably smaller, while the application can still be processed quite fast. All kinds of relevant details can be verified in almost real time: are the applicant and the owner the same person? Does it concern a ‘regular driver’ and how is he connected to the applications? The screening result directly contributes to the result of the overall motor vehicle portfolio, it prevents the company from gaining a reputation as ‘an easy target’ and it helps to prevent innocent citizens from becoming victims of identity fraudsters.