Are the victims of fraud being inadvertently excluded from financial products and services?

Let’s peek beneath the headline figures of ‘Billions of pounds in fraud losses per year to the UK economy’ and ‘Billions of pounds expended in combatting fraud’ and take it to a personal level. Many of us know, or have been the victim of a fraudster. The financial losses and personal anguish at that moment in time are palpable. What we need to ensure never happens is that the victim of these often life-changing events, becomes marginalised from mainstream financial services as a result of poor data capture.


So how do you protect the innocent with something as simple as a data consortium?

The insurance industry and respective National SIRA users faced this exact same problem just a few years ago. The victims of ID Theft and Impersonation were priced out of, or even excluded from insurance quotes due to the practise of marking an Application/ Enquiry as ‘Fraud’ (or Inconsistency) and the victim therefore inheriting the same Action Status.

We consulted and worked in partnership with the insurers to find a solution. We developed the ability for our members to mark the innocent party and their associated entity data with an action status of “Victim”. This piece of functionality has been used to great effect by our insurance clients. They can now provide a frictionless onboarding journey for previous victims of certain fraud typologies whilst still maintaining robust defences against the perpetrators. Two very welcome by-products being the opening up of new avenues of customers and help reducing premiums.

38,000 victims in two years – a drop in the ocean?

Over the last two years 38,000 individuals have been logged as victims of ID Theft or Impersonation in National SIRA by insurers having had their personal details mis-used by fraudsters. This is likely to be a drop in the ocean compared to the number of actual victims but it is still 38,000 customers who have been fairly treated and who have benefited from being correctly identified as a victim.


So why should National SIRA members log victims of fraud?

It’s good business sense

We know that good business from victims of ID Theft or impersonation fraud is being lost, simply because they [the victims] are unable to become a customer with an active fraud marker against them.

Within the insurance world, drivers who purchase a policy from a ghost broker (knowingly or otherwise), are driving uninsured vehicles. They lose an average of £599 in premium costs for their fraudulent policies and are potentially liable for a minimum six penalty points and fine of £300 if caught. They are also negatively impacted for the next six years by putting a significant fraud marker against themselves. This makes it difficult to obtain future insurance policies, or get credit in the form of cards, loans or mortgages.

It’s about integrity – business, personal and data

There is an ever-increasing reliance on data to make automated, real time decisions on the provision of financial products and services to customers. As this trend increases the accuracy of the underlying data becomes exponentially more important to ensure the innocent victims of the fraud do not become isolated from mainstream financial services through no fault of their own.

For the victims themselves, the benefits are more obvious. When a victim is correctly logged as such, they’re treated as ‘clear’ and are not negatively impacted when they next attempt to buy insurance or obtain credit. This is crucial when you consider the rise in victim numbers of fraud typologies like ghost-broking.

Join the debate

We recognise the potential operational impact of marking Action Status’s at party level as opposed to the current practice of Application level. We also fully acknowledge the use of the ‘Victim’ Action Status may not apply to all financial products or fraud typologies. However, the insurance industry has seen significant gains by adopting a relatively minor change in process. Join the conversation, learn about the Pros, Cons and best approaches to using ‘Victim"; Action Status.


Make a stand for financial inclusion, it makes good business sense

Synectics stands for financial inclusion as much as we stand for fraud detection and prevention.

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