One in seven smartphone users say they have been a victim of identity fraud in the past year

20 June 2023, LONDON: One in seven smartphone users have knowingly been a victim of identity fraud in the past year, reveals new research report from GBG, the global expert in digital location, identity verification and fraud software.

GBG’s Global State of Digital Identity 2023 report surveyed consumers that own a smartphone, and business leaders across the UK, France, Germany, Spain, US, and Australia. Among those consumers personally impacted by identity fraud:

• 40% had an unauthorised online purchase made using their credit or debit card number
• 31% had money transferred out of their bank account
• 28% had their physical credit or debit card stolen and used
• 24% has their mobile number stolen or cloned

Building back trust

GBG’s report reveals a current landscape of mistrust for consumers. More than two thirds (67%) of consumers are worried their personal details are available for sale to fraudsters on the internet, and more than half (57%) mistrust eCommerce sites, believing their data is “not at all secure” or only “somewhat secure”.[1] The level of anxiety is high among consumers globally with over nine in ten (92%) concerned of falling victim to fraud in the future.

The battle to beat fraud has also intensified for businesses. More than half of business leaders (55%) have experienced any known or suspected fraud attempts in the past 12 months, with half (49%) of those saying it has increased compared to last year.  

For over a third (38%) of these business leaders, the average fraud breach cost their business between £10,000-£50,000. However, financial damage isn’t the only concern – nearly half (43%) of businesses saw lasting damage to brand reputation as one of the biggest potential risks of fraud.

The top three fraud risks for businesses are:

• Synthetic identity fraud – the creation of a fake digital identity using a combination of fake and real identity data – 68% of businesses reported sustained or increased annual instances.
• Promotion abuse fraud – instances of scammers successfully signing up to a service multiple times to exploit marketing offers for new customers – 64% of businesses reported sustained or increased annual instances.
• Account takeover – instances of scammers successfully gaining access to an individual’s online account – 68% of businesses reported sustained or increased annual instances.

Changing consumer sentiment: onboarding is good friction

GBG’s 2022 State of Digital Identity report revealed a growing trend of ‘The Great Switch’ where consumers were more than willing to ditch a brand if they have a poor onboarding experience. However, this year’s data reveals consumer sentiment is turning towards a desire for greater security over a frictionless experience when it comes to onboarding. When asked about the importance of speed, ease and security, consumers rate security the highest: 64% stating it is extremely important vs 32% stating speed is extremely important.

As a result, the protection of a consumers’ identity is becoming increasingly critical for businesses to win and retain customer trust: more than four in five (83%) consumers believe it is a businesses’ responsibility to protect their personal identity data and 85% consumers around the world prefer brands that offers advanced identity verification tools as part of a commitment to fighting identity theft and fraud.[2]

When comparing consumers’ expectations and businesses’ current onboarding priorities on a scale of high to low friction, there is a disparity of opinion. Consumers are tilted toward accepting ‘good’ friction in favour of robust fraud prevention, at the top of the table (52%), while businesses are weighted towards speed and simplicity (63%).[3]  

Gus Tomlinson, Chief Product Officer at GBG, said, “In today’s digital world consumers and businesses are facing increasingly sophisticated fraud carried out by a growing army of tech-savvy scammers adept in the social engineering and illegal use of digital identity data. People are right to be wary in the current landscape and it’s not surprising more consumers want the reassurance of more checks from businesses when accessing good and services online.”

“While most companies understand the increasing threat of fraud, and in particular identity fraud - 95% of organisations we surveyed use identity verification solution – businesses now need to work to strike the right balance in customer onboarding to adjust in real time to offer great speed or greater scrutiny depending on fraud signals.[4] Only then will businesses begin to build back consumer trust and benefit from attracting and retaining customer.”

For more findings and to download the full report, visit: https://www.gbgplc.com/en/reports/the-state-of-digital-identity-2023/

About the research

The research was conducted via online survey by Censuswide with two groups: a sample of 5,362 smartphone owners aged 18+ across UK (1403), France (552), Germany (288) and Spain (335), US (1,408) and Australia (1,376) and a sample of 321 Decision makers aged 18+ across the UK (78), France (35), Germany (25), Spain (26), US (79) and Australia (78) within the following job role/responsibility: Fraud/Risk, Compliance/Regulatory, Product, Operations, Technology. The survey fieldwork took place between 13.03.2023 - 23.03.2023. 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. 

About GBG 

GBG is the leading expert in global digital identity. We combine our powerful technology, the most accurate data coverage, and our talented team to deliver award-winning location intelligence, identity verification and fraud prevention solutions. 

With over 30 years’ experience, we bring together a team of over 1,250 dedicated experts with local industry insight from around the world to make it easy for businesses to identify and verify customers and locations, protecting everyone, everywhere from fraud. 

Learn more at www.gbgplc.com and follow us on LinkedIn and Twitter @gbgplc. 

Contact

Kerry Rothery, Communications Manager

Kerry.rothery@gbgplc.com

[1] 66.54% smartphone owners surveyed said they were either ‘worried’ or ‘very worried’, and 91.63% said they were ‘extremely’ or ‘very’ or ‘somewhat’ concerned.

[2] 82.62% smartphone owners surveyed said they ‘somewhat’ or ‘strongly’ agree, 85.40% said would be ‘influential’ or ‘very influential’.

[3] 51.75% of smartphone owners scored 0-4 (out of 10) in favour of more checks – robust fraud prevention, 63.24% of business leaders surveyed scored 6-10 (out of 10) in favour of frictionless user experience.

[4] 95.02% - Inverse proportion of 4.67% of business leaders survey who do not use identity solutions and 0.31% who prefer not to say