Telecommunications providers look set to face a significant spike in bad debt as the iPhone 5 enters Australian stores, according to business research specialists, Dun & Bradstreet.
Identity fraud, or identity manipulation or fabrication on a credit application to purchase an iPhone rose by more than 150 per cent in the days that followed the launch of the iPhone 4S, with significant fraud hotspots across the eastern seaboard.
Research by Dun & Bradstreet indicates one in every six applications for an iPhone 5 flagged as suspicious by telecommunications companies will include an address from areas along the east coast where fraud crime syndicates are known to be active.
Key areas for fraudulent activity include suburbs 30km west of Sydney around the Blacktown and Mt Druitt region. The Dun & Bradstreet research reveals telecommunications providers recorded a 156 per cent spike in falsified applications for credit to purchase the popular phone, leading to non-payment for an order or default in the two days following the iPhone 4S launch.
The number of people who applied for credit but never paid a single instalment remained elevated for a further two weeks, at 26 per cent above trend. Dun & Bradstreet CEO, Gareth Jones, says the findings should act as a warning for telecommunications providers.
“Credit providers need to be mindful of their vulnerability to various forms of fraud when high-demand products enter the market. The significant rise in incidents of application fraud, which occurred when the iPhone became available last year, provides strong evidence to suggest that similar activity will occur in the coming weeks,” Mr Jones said.
“This is certainly a time when we know fraud syndicates become incredibly active. In those areas designated as ‘hot spots’ we are seeing concentrated patterns of highly organised, abnormal credit behaviours indicative of professional fraud organisations.”
Incidents of fraud peaked mid-week following the release of the iPhone 4S, with never-pay applications most likely to be submitted on a Wednesday or Thursday.