Fraud levels surge upwards

Nia Williams

January 26, 2012

CIFAS said the key findings present a stark picture of the economic crime landscape in the UK:

• Over 236,500 frauds were identified during 2011 by CIFAS members, the highest number of frauds ever recorded by CIFAS members and over 120,000 individual cases with an identifiable victim.

• The continued blight of identity fraud accounts for over 113,000 fraud cases (a 10% increase from 2010 levels and representing 48% of all frauds).

• An 18% surge in facility takeover fraud (where a fraudster gains access and fraudulently uses a victim’s account such as a credit card, bank account or mobile phone), meaning that this type of fraud has rocketed by nearly 300% in just five years.

• A 13% rise in misuse of facility fraud (where an account, policy or other facility has been legitimately obtained but is later used fraudulently).

CIFAS communications manager, Richard Hurley, said: “It is vitally important to remember that fraud and economic crime are offences with a range of motivations.

“Many of these frauds will undoubtedly be committed by organised criminal elements, but many will also be committed by people who seemingly feel that their circumstances leave them no choice.

“Equally, financial desperation leaves many susceptible to potential scammers.

“Untangling the mess that fraud causes irrespective of motivation, however, is time-consuming, damaging and costly to businesses, to the public sector and to individuals.

“Rather than being the ‘victimless crime’ it is sometimes heralded as, fraud actually makes victims of us all.”

The fraudulent use of identity details (either those of an innocent victim or completely fictitious ones) continues to be the biggest fraud threat. Nearly 1 in 2 of all frauds identified during 2011 relate to the impersonation of an innocent victim or the use of completely false identities.

Richard Hurley noted: “The value of personal data to fraudsters has never been questioned, but the continued increases in the levels of identity fraud and account takeover warn us all that not enough is done to combat fraudsters.

“All organisations must recognise this threat, and review how they try to prevent such frauds: whether that is by reviewing their security procedures and increasing identification requirements when dealing with applications, or by ensuring that individuals regularly change passwords and PIN numbers.

“It is obvious that fraud relating to personal data is an immense criminal trade so, fundamentally, it’s time for every one of us to start treating data in the same way that we would guard a prized possession; as something to be secured and protected without complacency.”

CIFAS chief executive, Peter Hurst, concluded: “With the cost of living increasing, pay levels frozen for many, and tax and VAT changes taking effect, perhaps it is unsurprising that fraud has rocketed again.

“Prevention, however, remains better than cure and it is time for all organisations and consumers to start reviewing their approaches to preventing fraud rather than trying and failing to recover losses.”

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