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UK identity fraud reaches record level

The level of identity fraud has reached its highest level to date, a UK fraud report shows

Overall UK fraud cases have dropped 6% in the past year, but identity fraud reached a record level, according to the latest report by fraud prevention service Cifas.

Identity fraud continued to rise in 2017, hitting an all-time high of 174,523 cases, with 95% of them involving the impersonation of an innocent victim, the Fraudscape report shows.

Although the rise in identity fraud is only 1% up compared with 2016, it is a 125% increase on the figure for 2007.

The difference this year, the report said, is that the rise is not down to increases in fraudulent applications for plastic cards and bank accounts, which are the products most frequently targeted by identity fraudsters, but due to targeting of other sectors, such as telecoms, online retail and insurance.

This “retargeting” by identity fraudsters can be seen as a shift towards more accessible products, such as mobile phone contracts, online retail accounts, retail credit loans and short-term loans, the report said.

The report is based on analysis of more than 300,000 cases of fraudulent conduct recorded in 2017, with data drawn from 306 organisations, including many major UK brands.

Other key findings are that 80% of fraudulent applications were made online, there was a 27% increase in 14 to 24-year-olds being recruited as “money mules” for cyber criminals for money laundering, and that the number of bank accounts identified as “mule” accounts was up by 11%.

Individuals are being targeted online by criminals promising “easy cash”, or encouraged by an acquaintance to transfer funds for them in exchange for a payment. 

The report also shows that more than one-third of bank account takeover victims were over 60 years old, and that organisations prevented more than £1.3bn in fraud losses through non-competitive data sharing.

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Cifas deputy chief executive Mike Haley said: “It is clear from this year’s Fraudscape that fraud in the UK continues to evolve, and as some targets become harder to crack, criminals turn to what they consider softer targets.

“Fortunately, many of these sectors, such as telecoms and insurance, share their fraud data through Cifas and are detecting more fraud attempts. As fraudsters see their attempts to obtain these products become more difficult, the question will arise about what they will target next.”

Although the small reduction in the overall number of detected frauds is welcome, Haley said it is hard to say whether the tide is beginning to turn.

“The absolute volume of fraud is still frighteningly high and much more still needs to be done to reduce its prevalence, including greater collaboration and sharing of fraud risk data between industry, government and law enforcement,” he said.

Conor Burns MP, chairman of the All-Party Parliamentary Group on Financial Crime and Scamming, said: “Fraud is the 21st century volume crime and the issue is not going to go away. With more and more people sharing data, transacting, setting up businesses, dating and chatting online, this trend is only going to continue.

“That is why I set up the APPG on Financial Crime and Scamming last year, to raise awareness of this issue within parliament. Fraudscape shows how prevalent this crime is and all of us – government, industry, third sector and individuals – have a role and responsibility in preventing it.”

Cifas supports the Take Five campaign, which asks consumers to protect themselves from financial fraud by remembering some simple advice:

  • Never disclose security details, such as your PIN or full password.
  • Do not assume an email request or caller is genuine – people aren’t always who they say they are.
  • Don’t be rushed. A bank or genuine organisation will wait to give you time to stop and think.
  • Listen to your instincts. If something feels wrong, then it is usually right to pause and question it.
  • Stay in control. Have the confidence to refuse unusual requests for information.

In response to increasing numbers of young people affected by fraud, last month Cifas and the PSHE Association launched four anti-fraud education lesson plans.

Read more on Hackers and cybercrime prevention

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It is not just the living that need to worry about having their identity stolen. It is also the deceased. Our research shows that criminals also target people that have passed away as it is considered an easy fraud to commit - plus it goes undetected for longer, meaning that the potential gain is much greater than traditional ID fraud. This is a real issue for businesses that provide credit - such as mobile phone companies, cataloguers, financial services etc as they are being hook winked into providing millions of pounds of bogus credit each year. This is why such organisations need to put safeguards in place to ensure that suspicious applications are flagged at source.

Karen pritchard, Halo Fraud Prevention
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