87% of UK business leaders confirm identity fraud costs are being passed on to consumers
23 November 2022 – With UK Finance announcing that ‘the level of fraud in the UK is such that it must be considered a national security threat’*, independent research by GBG, the digital identity experts, has found that two in three (66%) people in the UK, nearly 36 million consumers**, think that businesses are cutting corners when it comes to protecting them from fraud by failing to check and verify people’s identities online. And 65% think this consequently costs businesses more in the long term.
They are right to be concerned with 94% of business leaders, c-suite chief security officers (CSO) and chief information security officers (CISO) surveyed confirming that businesses are indeed cutting corners and opening the door to more identity fraud by not having sufficient measures in place to check and verify identities online.
Despite this, only 34% of UK consumers think the cost of cutting corners is then passed to them. In reality, 87% of business leaders confirm that identity fraud costs are passed onto consumers in the form of increased prices. According to the business leaders surveyed, nearly a fifth (17%) of the total cost of identity fraud, on average, is passed on to consumers.
In the last 12 months, business leaders estimate that identity fraud has on average cost their business £398,520, meaning £67,748 of this cost has been picked up by consumers in the form of increased prices. According to CIFAS, 2022 has already seen rising levels of identity fraud with fraud cases set to soar amidst the cost-of-living crisis.
Gus Tomlinson, Chief Product Officer, EMEA at GBG, said: “By cutting corners in identity verification and authentication, businesses are leaving the door open to fraudsters to use stolen identities to obtain goods and services by deception. As well as harming their own business reputationally and financially, identity fraud causes huge financial harm and emotional distress, and can negatively impact its victims for years – preventing access to credit and putting them at risk of being chased for fraudulent unpaid debts.
“More businesses need to put themselves into the shoes of victims and ask themselves ‘how would I feel if I was at the receiving end of this experience?’ and reflect on whether cutting corners is worth the risk.”
The GBG research also found that if people knew a business or organisation didn’t have sufficient measures in place to check and verify identities online, and thus prevent fraud, it would have the following impact on consumers**:
Gus Tomlinson concludes: “When transacting online, people put their trust in a business and assume that checks are in place to verify a person is genuinely who they say they are. Unfortunately, this isn’t always the case and as a result they are at risk of losing the trust of their customers and incurring higher rates of fraud. Technologies exist today that can combat this type of fraud, making customers feel secure in their digital transactions. Now more than ever, organisations should be investing in these solutions.”
Notes to editor
*UK Finance https://www.ukfinance.org.uk/news-and-insight/press-release/uk-finance-calls-urgent-action-all-sectors-fraud-continues-threaten
**Based on a population of 54,098,971 x 16+ year olds in the UK (ONS data).
About the research
The independent research commissioned by GBG and undertaken by Censuswide with 2,000 general consumers and 126 CIO and CISOs in the UK between 21.09.22-23.09.22. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles and are members of The British Polling Council.
We are the experts in digital location, identity and managing fraud risk and compliance. Helping organisations across the globe eliminate customer friction and fraud from their digital experiences. GBG develop and deliver digital identity, address verification, fraud prevention and compliance software to businesses globally.
Through the combination of the latest technology, the most accurate data and our unrivalled expertise, GBG helps organisations ranging from start-ups to the largest consumer and technology brands in the world deliver seamless experiences, so their customers can transact online with greater confidence.
To find out more about how we help our customers establish trust with their customers visit www.gbgplc.com and follow us on LinkedIn and Twitter @gbgplc.