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ID Analytics uncovers more than 10,000 identity fraud rings in US

14 November 2012  |  1556 views  |  0 Source: ID Analytics

There are more than 10,000 identity fraud rings in the U.S. according to a new study released today by ID Analytics' ID:A Labs.

An identity fraud ring is a group of people actively collaborating to commit identity fraud. This study is the first to investigate the interconnections of identity manipulators and identity fraudsters to identify rings of criminals working in collaboration.

While many of these fraud rings are made up of two or more career criminals, surprisingly, others are family members or groups of friends. The ring members may be either stealing victims' identities or improperly sharing and manipulating personal identifying information such as dates-of-birth (DOB) and Social Security numbers (SSNs) on applications for credit and services.

The ID Analytics study examined more than a billion applications for bankcards, wireless services and retail credit cards and found identity fraud rings attacking all three industries, with wireless carriers suffering from the most fraudulent activity. Georgia and South Carolina were two noted hotbeds of fraudulent activities across all three industries. Two bankcard fraud rings in Gainesville and Orlando, Florida each filed 200 applications.

Other findings of the study include:

Hotbeds for Fraud Rings—States with the highest numbers of fraud rings include Alabama, the Carolinas, Delaware, Georgia, Mississippi and Texas. The three-digit ZIP codes with the most fraud rings observed are areas around Washington DC; Tampa, Fla.; Greenville, Miss.; Macon, Ga.; Detroit; and Montgomery, Ala.
Fraud in the Countryside—While many fraud rings occur in cities, a surprisingly high number were also found in rural areas of the country.
Bonding over Identity Manipulation—A large number of families are working together in fraud rings, even using each other's SSNs and DOBs. However, rings made up of friends are more common, with the majority of fraud rings made up of members with different last names.

"In this latest research, we have taken a broader approach, looking at connections among bad people rather than studying individual actival activity," said Dr. Stephen Coggeshall, chief technology officer of ID Analytics. "This information enables us to build new variables into our fraud models so we can help our customers to make better decisions and improve protection for consumers."

Each fraud ring can be examined in detail, showing the conspirators' locations, ages and relationships. For example, ID:A Labs identified a family of five in Florida involved in a fraud ring for more than three years. The family, with ages ranging from 24 to 37, had filed at least 130 fraudulent applications, using more than eight SSNs and 11 DOBs during that time period.

Understanding the Methodology

Leveraging data within ID Analytics' ID Network®, ID:A Labs looked at approximately 1.7 billion identity risk events including applications for credit cards, wireless phones, payday loans, utilities, and other financial services credit products. It also examined changes in personal identifying information among accounts such as changes in name, address, DOB and SSN. This information is supplemented with authorization requests and other third-party data. The study examined data in the ID Network from January 2009 to September 2012.

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