Current account fraud at new high

 

Current account fraud has reached its highest level in at least
three years, mainly due to people lying about the state of their
finances, a study suggested today.

A rate of 44 in every 10,000 current account applications were found to be fraudulent in the first quarter of this year, a 23% rise on the last three months of 2011, Experian said.

The rate is the highest since Experian's records began in spring 2009 and was the biggest driver behind a 16% jump in financial services fraud rates generally compared with the previous quarter.

Nineteen in every 10,000 applications for financial services generally were found to be fraudulent in the first three months of this year.

The study found that current account fraud often involved "financially stressed" people exaggerating or hiding aspects of their personal circumstances, such as not revealing bad credit histories when trying to open an account or apply for an overdraft.

Around four in 10 current account frauds involved payment abuse, including people trying to make payments from accounts when they knew they did not have enough money to cover the costs.

Attempted insurance fraud increased by 37% quarter-on-quarter to reach its highest point since late 2009, with 13 in every 10,000 applications and claims detected as fraudulent.

Credit card fraud has also seen a resurgence, increasing from 10 cases in every 10,000 applications in the final three months of 2011 to 14 in the first quarter of 2012. Attempted identity frauds on cards leapt from five to eight in every 10,000 applications over the same period.

Nick Mothershaw, UK director of identity and fraud services at Experian, said: "Experian's data shows further growth in current account fraud during the first quarter of 2012, mostly emanating from individuals providing false information attempting to open new accounts or obtain overdrafts or making payments they knowingly couldn't afford...

"Credit cards have seen a resurgence in identity fraud, while a growing number of financially stressed individuals consider misrepresenting their personal or payment information when applying for insurance, contributing to a significant fraud upswing in the first quarter of 2012."

The number of fraudulent loan applications reached the lowest point ever recorded by Experian, which began recording its loan figures in 2006. Four in every 10,000 applications were discovered to be fraudulent, 38% lower than during the previous quarter.

Attempted mortgage fraud and savings account fraud also fell compared with the previous quarter.

Experian's fraud index is based on information from fraud prevention systems National Hunter and Insurance Hunter, which Experian manages on behalf of its clients.

PA

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