Combatting Identity Fraud: Insights and Strategies for Payroll & HR Professionals

1. Payroll professional developmentIdentity fraud Linda Pullan Head of Content, Training & Qualifications Payroll Alliance

2. Identity fraud • The Fraud Advisory Panel (FAP) is an independent body of volunteers from public & private sectors • FAP is a registered charity • Its aim is to raise awareness of the social & economic damage caused by fraud • 100,000 people are affected each year by fraud

3. Identity fraud • Identity fraud costs the UK over £1.7 billion per year • Experian Information Services reported identity fraud up 70% in second half of 2006 • Companies are often targeted for information or documentation

4. London remains the identity fraud capital of the UK

5. Identity fraud • Top 25 at risk areas for fraud found within M25 • People living in the capital are two and half times more likely to be hit by identity crime • 50% unaware that they are victims

6. Identity fraud • Common definitions of fraud are: - forgery- deception - false pretence- false accounting - to gain a pecuniary advantage

7. Identity fraud • Fraud is often perceived as perpetrated by one or two employees for personal gain over short periods of time • Fraudsters are often coerced into obtaining information and documentation • Organised crime is often behind the fraud on a massive scale!

8. Profile of a fraudster • Under 25 or over 40 • 80% of fraud involves an employee of the company • 90% are with the company over a year • 32% are with the company 10 years+

9. Identity fraud • In a recent study it was revealed that 66% of those under 30 have at some time given friends or family details of • PIN numbers • Full bank account details • Online banking passwords • This compares with 40% of 30 – 50 and 33% of over 50s

10. Identity fraud • Martin Gill, an identity theft specialist & professor of criminology, said that the number of ID thefts was far higher than reported • Official figures have risen from 20,000 in 1999 to 137,000 in 2005 • However according to Professor Gill many cases go undetected

11. Identity fraud • Those under the age of 30 are more at risk because they change their addresses more frequently & post is not redirected • Experian said present address fraud has increased 45% • This provides potential fraudsters with valuable information

12. Identity fraud • All frauds have three things in common:- Inducement- The deceit- The result or effect • Many crimes require a constant supply of clean personal identities to remain undetected

13. Identity fraud • To gather information people are placed in employment positions within organisations where useful databases exist (most UK businesses) • Their aim is to capture any personal data

14. Identity fraud They rely on the fact that CVs & previous employment records of applicants are not thoroughly checked

15. Identity fraud • Fraudster’s remit is to capture the data of a company’s: • Clients • Customers • Staff

16. Identity fraud Payroll & HR departments are particularly vulnerable to fraudstersbecause they hold information useful to them

17. Identity fraud • This information includes: • Dates of birth • NINO • Addresses • Bank details • Details of earnings including P60s • Employment history

18. Identity fraud • Fraudsters need the info to: • Obtain benefits, tax credits or loans applicants/claimants • To make a claim, applicants must produce certain documentation: • Passport, payslips, P60s, birth certificates, utility bills, bank statements

19. Identity fraud • The biggest problem in the fight against fraud is sometimes your employees! • This is because they fail to protect themselves against fraud • They often insist on additional personal details being held on their payslips • Such as bank details, NINO, address

20. Identity fraud • How to minimise the risks: • Dispose of all sensitive data by cross shredding it. Don’t just put it in the bin! • If data is disposed of by contractors they must be licensed by the local authority • Don’t put employee’s full bank details on the payslips

21. Identity fraud • How to minimise the risks: • Ensure CVs & employment histories are checked for new staff • Keep strict control of passwords & access to sensitive data • Ensure leavers & transfer’s passwords are deleted from the payroll/HR system

22. Identity fraud • Many people believe that national ID cards will solve the problem • But that it might mean that fraudsters only have to produce one piece of ID not several • One of the main obstacles has been cost £93-£300 each • Newspapers are reporting that the Government will be charging banks etc to access info

23. Personal Security • Fraudsters have found ways of withdrawing cash without PIN numbers • This can be done at the majority of banks if they have secondary proof of ID such as a second credit card • One victim lost £1250 in this way

24. Personal security • Never reveal PIN numbers & passwords • Avoid using cash machines in public places on a Friday afternoon • Check your bank/credit card statements

25. Personal security • Check your bank/credit card statements • Never confirm passwords etc in an email from the ‘bank’ – it’s bogus • Don’t agree to help foreign businessmen get money out of the country using your bank account

26. Payroll security • Section 8 Asylum & Immigration Act requires you to make checks on potential employees & copy that info • Always make sure that the documents are originals not photocopies

27. Payroll security • Employees provide documentary evidence to claim a variety of things • For example statutory payments e.g. MATBI to claim SMP • Passport or birth certificate for NI exemption • Always ensure they are original documents

28. Any questions?