In an analysis that tallied 10,000 identity fraud rings in the United States, ID Analytics made a couple of surprising findings — about where the crime is taking place and who's committing it.
"In my previous research into identity fraud, most ID fraudsters have tended to be in urban areas, in high-population-density areas," says Dr. Stephen Coggeshall, ID Analytics' chief technology officer.
"I expected the fraud rings to be there, too, but it turned out to be the opposite — these groups of people tend to be in rural areas," Coggeshall continues. "There's a striking belt of fraud that cuts across the Southeast, going from Virginia across the Carolinas, across Georgia and into Alabama. It's the rural parts of those states where this fraud belt is occurring."
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, D.C.; Tampa, Fla.; Greenville, Miss.; Macon, Ga.; Detroit; and Montgomery, Ala.
Coggeshall expected the typical ring to be made up of a handful of unrelated people, but many of the rings turned out to be family operations. Rings made up of friends were also common.
Asked if the weakened economy and high unemployment rates may be driving such crime, Coggeshall said he thought it probably was.
ID Analytics found the rings after studying 1.7 billion credit card and cellphone account applications and finding similar names, addresses and email addresses. The security company provides the engine behind the LifeLock data protection service for consumers and was recently bought by LifeLock.
ID Analytics works with large banks, cellphone companies and retail card companies to analyze their card and phone contract applicants for signs of fraud. It gets half of all credit card applications and most cellphone applications, Coggeshall says.
The ID Analytics service compares incoming credit card and phone applications against a database of similar applications, and pulls any matches of similar personally identifiable information for further attention. It provides fraud scores for new customers that's similar to a credit score, that puts a number on a new customer's likelihood of perpetrating fraud.
Coggeshall makes a strong case for use of services like ID Analytics'.
"You could look for unusual activity that indicates fraud in your own shop, but to really counteract fraud, you need a broader point of view," he says.
Experian offers a Precise ID service that looks for signs of application and authentication fraud. Guardian Analytics analyzes automated clearing house activity for signs for fraud.