‘Bogus credit card applications surged towards end of 2021’

Experian said the detected fraud rate for cards rose by 42% between October and December 2021 compared with the previous quarter.

Credit card application fraud attempts surged at the fastest rate in five years in the last three months of 2021, according to Experian (Dominic Lipinski/PA) (PA Archive)

Credit card application fraud attempts surged at the fastest rate in five years in the last three months of 2021, according to a credit reference agency.

The detected fraud rate for cards rose by 42% between October and December 2021 compared with the previous quarter, marking the highest rate since 2017.

The data, taken from the National Fraud Hunter Prevention Service, was analysed by Experian.

Nearly three-quarters of detected cases involved fraudsters using the victim’s current address to apply for credit, Experian said.

These figures should serve as a warning as to how important it is that people look after their personal information

Eduardo Castro, Experian

Eduardo Castro, managing director, identity and fraud, Experian UK & Ireland, said: “Genuine applications for credit tend to rise as we enter the busy Christmas shopping period, but the extent to which fraudsters tried to take advantage this year is truly eye-opening.

“These figures should serve as a warning as to how important it is that people look after their personal information. We need to be more vigilant online.

“For example, oversharing personal details on social media platforms is easily done, but the consequences can be dire, with nearly three-quarters of the cases we found using the victim’s current address.

“Meanwhile, businesses need robust fraud prevention systems in place to protect customers and technology is helping in the battle. Identifying fraudulent activity at the point of application frees up time and resources for fraud teams to investigate more complex cases.”

The rise in rates can also be in part attributed to financial services’ fraud teams using a sophisticated combination of technologies, Experian added.

This has allowed lenders to decline questionable applications rapidly and efficiently, rather than flagging them for manual review.

New forms of authentication, such as biometrics systems, are also becoming more widely-used, it added.