The latest Fraud Index from Experian reveals that identity fraud attempts doubled in the first half of 2011, compared to Q4 2010.
This pushed up the overall level of application fraud attempted against UK financial services firms for the third successive quarter. Identity fraudsters were responsible for eight in every 10,000 applications made in Q2 2011 (April – June 2011), double the number of fraudulent applications recorded in the final quarter of 2010. This was driven by a 340 per cent increase in current account identity fraud, from five to 22 in every 10,000 applications.
Experian’s analysis also highlights that 18 in every 10,000 applications for automotive finance, credit cards, insurance, loans, mortgages, current accounts and savings products made in the second quarter of 2011 were found to be fraudulent. These were five per cent higher than January to March 2011, and up nine per cent on the year.
Over the same period the number of first-party fraud attempts – where a genuine individual misrepresents their circumstances – remained constant at 10 in every 10,000 applications. Forty two in every 10,000 applications for current accounts were detected as fraudulent between April and June 2011, up 20 per cent on the first three months of 2011 and 59 per cent higher than during Q2 2010. For the second quarter in a row, current accounts were the most targeted financial product by fraudsters.
Nick Mothershaw, director of identity and fraud at Experian UK & Ireland, comments: “Identity fraud is back with a vengeance. Our analysis shows that we are witnessing a surge in the number of detected identity frauds, with current accounts the number one target in the UK. Fraudsters see the current account as an easier option, giving them a springboard for money laundering and from where they can also target more lucrative credit products such as mortgages, credit cards and loans.”
“Our latest figures suggest that, across the financial services industry, application fraud will increase by at least nine per cent this year,” he says.
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