Fraud Rings Rampant in U.S., Especially Southeast
A study of more than a billion applications for credit cards, bank cards and cell phone accounts found more than 10,000 identity-fraud rings.A study of more than a billion applications for credit cards, bank cards and cell phone accounts uncovered about 2.9 million fraud events linked to 10,000 identity-fraud rings, information protection firm ID Analytics stated in a report. The research examined the interconnections between the people committing fraud and found that some 10,000 groups, consisting of identity fraudsters who are collaborating to commit the crime, exist in the United States. Rather than sophisticated organized criminal groups, most rings are small and consist of family members working together. In addition, while many believe that identity fraud is an urban crime, most groups came from rural areas, especially in the Southeastern United States, said Stephen Coggeshall, CTO for ID Analytics, which released the report Nov. 14. "Urban areas have the higher fraud rates, and that makes sense, but what surprised me in the fraud rings—people collaborating together to commit identity fraud—the higher activity tends to be in rural areas," he said. "In particular, there is a 'Belt of Fraud' from the Virginia through the Carolinas, across Alabama and into Mississippi." This is the first time that anyone has done a systematic study of collusion and collaboration in identity fraud, Coggeshall said. ID Analytics offers services to businesses to verify the legitimacy of credit applications. About 2 percent of all applications are fraudulent, the company said.
Previous surveys of identity theft have found that the crime peaked in 2009, but costs for victims continue to climb. Smartphone users tend to have a higher incidence of identity fraud, due to lost and stolen devices, according to Javelin Strategies, an analyst firm.