News Article


Fraud continues to pose problems in 2010

By CreditMan Thursday, April 29, 2010

The analysis of fraud trends during the first quarter of 2010 by CIFAS - The UK''s Fraud Prevention Service - reveals some notable facts:

A 19.86% increase in identity fraud when compared with the same period in 2009

The number of victims of impersonation increased by over 20% compared with the first quarter of 2009

Overall fraud levels remain consistent, with nearly 60,000 proven frauds identified in the first three months of 2010.

Identity fraud threat more insidious than ever

Identity fraud has always been a sinister crime – fraudsters using the names and details of innocent victims to generate their criminal cash-flow. An increase in identity fraud of 19.86% in the first quarter of 2010 (compared with the same period in 2009), therefore, is cause for concern. As CIFAS has previously reported, however, the surge in identity frauds that make use of the victim’s current address details (which are therefore more sophisticated and difficult to detect) is a trend that has become more pronounced during the past 12 months. A 44.73% increase in identity frauds where the facility, product, policy or claim was granted (fraud was proved when it was too late, only after the facility had been offered,) is proof of this sinister development.

CIFAS Communications Manager, Richard Hurley, comments: “The increase in the use of a victim’s current address and details makes the ‘impersonation’ seem more realistic and, therefore, difficult to detect and prevent due to the applications seeming so plausible. The challenge for us all, therefore, is to battle against the sophisticated criminals that perpetrate these crimes.”

Number of victims continues to rise

Unsurprisingly, in light of this increase in identity fraud, the number of victims of impersonation has also continued to rise. Nearly 27,000 victims of impersonation were recorded by CIFAS Members during the first three months of 2010: an increase of just over 6,000 (22.86%). Victims of impersonation frequently report feelings of uncertainty, helplessness and not knowing who to trust – on top of the financial impact suffered and the time taken to rectify the damage. The impact of fraud, therefore, must always be seen as something far greater than just a financial one.

Fraud figures remain constant

The first three months of 2010 actually saw a slight decrease (-1.37%) in the frauds recorded, when compared with the first quarter of 2009. This figure, unfortunately, must be seen in context. Between January and March 2010, CIFAS Members recorded 59,650 frauds – which is actually an increase of 350 on the frauds identified during the previous quarter (October to December 2009). Richard Hurley notes: “The fight against fraud is “a war of attrition”. The changes in the types of fraudulent activity witnessed in the past two years demonstrate that fraud does not disappear – it simply adapts. While any decrease in fraudulent activity can be seen as a good thing, we must not lose sight of the fact that the figures remain consistently high and that fraud remains rife in the UK.”

Comment from the CIFAS Chief Executive

Peter Hurst, CIFAS Chief Executive, comments: “In the run-up to the election, as the UK economy tentatively edges itself out of recession, and where all sectors of society have to look at becoming more prudent, these figures show that preventing fraud must become a priority. The National Fraud Authority estimated the cost of fraud to the UK economy at £30 billion per year - and the best way to reduce this is to prevent fraud. Our figures demonstrate that fraud is endemic in the UK. The damage inflicted by fraud is far more than just financial - its repercussions reverberate throughout the economy and society. In the coming months we hope to see the prevention of this crime being given the attention that it demands by a new Government.”