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UK identity fraud reaches record levels

The UK fraud prevention service is calling for better education about fraud and financial crime as identity fraud, which is often cyber-enabled, hits the highest levels ever recorded

A record 172,919 identity frauds were recorded in 2016, according to the latest figures released by UK fraud prevention service Cifas.

That represents an increase of nearly 2% compared with the year before, but is 68% up from the number of identity frauds recorded in 2010.

Identity fraud now represents just over half of all fraud recorded by Cifas, of which 88% was perpetrated online. 

Most identity fraud takes place when a fraudster uses the identity of an innocent individual to buy a product or take out a loan.

Often victims do not even realise that they have been targeted until a bill arrives for something they did not buy or they experience problems with their credit rating.

To carry out this kind of fraud successfully, fraudsters need access to their victim’s personal information such as name, date of birth, address, their bank and who they hold accounts with.

Fraudsters get this information in a variety of ways, including stealing correspondence, hacking, obtaining data on the “dark web”, exploiting personal information on social media, or though “social engineering” where innocent parties are persuaded to give up personal information to someone pretending to be from their bank, the police or a trusted retailer.

Growing numbers of young people are falling victim, according to Cifas, with almost 25,000 victims in 2016 being under 30. In particular, there was a 34% increase in under 21s.

Cifas is calling for better education around fraud and financial crime and urging young people to be vigilant about protecting their personal data.

2016 also saw increases in victims aged over 40, with 1,869 more victims recorded by Cifas members.

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“These figures show that identity fraud continues to be the number one fraud threat,” said Mike Haley, Cifas deputy chief executive.

“With nine out of 10 identity frauds committed online and with all age groups at risk, we are urging everyone to make it more difficult for fraudsters to abuse their identity,” he said.

Haley said there are three simple steps that anyone can take to protect themselves: use strong passwords, download software updates when prompted on your devices, and avoid using public Wi-Fi for banking and online shopping.

“We all remember to protect our possessions through locking our house or flat or car but we don’t take the same care to protect our most important asset – our identities,” he said.

“We all need to take responsibility to secure our mail boxes, shred our important documents such as bank statements and utility bills, and take sensible precautions online – otherwise we are making ourselves a target for the identity fraudster.”

Cifas also advises enabling privacy setting across all social media and protecting all devices with passwords and security software.

Poor security like an ‘unlocked house’

City of London Police commander Chris Greany, who is national co-ordinator for economic crime, said: “With close to half of all crime now either fraud or cyber crime, we need to make sure we protect our identity.

“Identity fraud is the key to unlocking your valuables. Things such as weak passwords or not updating your software are the same as leaving a window or door unlocked,” he said.

Organised cyber fraud gangs are turning their attention to online lenders and emerging financial services, potentially netting £8bn in 2016, according to a report published by security firm ThreatMetrix in February 2017.

Online fraudsters are exploiting the time delays inherent in reporting loan agreements to credit bureaus for substantial financial gain.

This attack method is expected to grow in 2017, with the number of attacks specifically targeting alternative lending up by 150% since the third quarter of 2016. ThreatMetrix detected 80 million attacks using fake or stolen credentials during 2016 in the finance sector alone.

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