News Article


Fraudscape: report depicts the UKs fraud landscape in 2009

By CreditMan Monday, March 1, 2010

CIFAS - the UK''s Fraud Prevention Service, today releases Fraudscape: a 48-page report that lays bare the frauds recorded by the 265 CIFAS Members during 2009. Building on the trends previously identified in CIFAS Annual Fraud Trends press releases, Fraudscape is the result of the work undertaken by CIFAS Members, together with cross-sector collaboration and research into the reasons why these frauds are taking place. It also notes some particularly revealing facts about fraud in the UK today.

Fraudscape reveals some notable patterns

Fraudscape analyses fraud data, by type of fraud committed and product targeted by the fraudster, and presents some key findings:

· Total frauds increased by nearly 10% in 2009 compared with 2008.

· A 32% increase in identity fraud (where a fraudster applies in the name of an innocent victim or uses an entirely fictitious identity) has been driven by identity fraudsters targeting bank accounts, communications, and mail order products.

· Application fraud (the use of material falsehoods lies on applications or false documentation) has decreased by over 25% from levels seen in 2008.

· The typical victim of identity fraud is still the man in his forties, though the increase in women being impersonated, or having their accounts taken over, indicates that now, as never before, anyone can be a potential target.

· Bank accounts, communications and mail order are the product types with the greatest proportionate increase in fraud in 2009 compared with 2008.

Further analysis

Fraudscape also identifies other, sometimes uncomfortable, realities about fraud in the UK today. For example:

· The huge proportion of identity frauds and facility takeovers perpetrated through the internet demonstrates that, for all of the convenience that the online world offers genuine, honest consumers, the World Wide Web is increasingly the channel of choice for those who wish to commit fraud. Over 74% of identity frauds and 76% of facility takeovers for bank accounts alone in 2009 were perpetrated online.

· Consumers and businesses are increasingly conscious of the threat posed by plastic card fraud, so the near 10% decline in fraud on these products is welcome. However, as with the decrease in application fraud, this reduction masks an offset effect: fraud levels rising by almost 10% for bank accounts in particular. This can be considered proof that fraudsters adapt by turning their attentions from one product to another.

· A general increase in the level of identity frauds committed through current address fraud: where the fraudster applies in the name of an innocent victim, and uses the victims real address as opposed to a fake or previous address on the application. For example, 63% of the identity frauds committed on loan accounts in 2009 were current address frauds. Fraud of this type has a greater chance of working as the application will look normal to the lender and is often the preserve of the organised criminal (requiring a sophisticated approach that enables them to intercept the post that would otherwise reach their victim, for instance). This is a solemn reminder of the criminal networks that use fraud. Equally, however, this type of fraud can be perpetrated by individuals connected to the victim of impersonation (e.g. friends and family) on the assumption that the victim will not be held responsible.

· Misuse of facility where a product or service has been gained legitimately but used fraudulently is another fraud that has seen a massive increase in 2009. Over 50,500 cases of misuse of facility (across all products) were identified in 2009 a 28% increase from 2008. As with other types of fraud, this increase will be driven as much by individuals feeling the economic pinch e.g. doctoring cheques or avoiding payments on card accounts as it will by organised criminals using individuals and their accounts to launder criminal funds.

Other trends and explanations such as the notable increase in staged accidents for false insurance claims are presented throughout Fraudscape. In addition, CIFAS once again collaborates with Ordnance Survey to produce maps that reveal the national fraud picture.

Comment from CIFAS

Peter Hurst, CIFAS Chief Executive, comments: At a time when every responsible member of society feels the strain of current economic conditions, the findings presented in Fraudscape not only reveal the true nature of the frauds identified but also reveal many of the problems and challenges ahead. This, however, is only the tip of the iceberg. Over and above the frauds recorded by CIFAS Members, there is an additional and unquantifiable volume of fraud that, due to tighter lending criteria, never got as far as the fraud department.

The findings presented in Fraudscape, however, clearly demonstrate the benefits that mutual collaboration brings. By sharing knowledge and pooling resources, CIFAS Members have prevented millions of pounds of fraud year after year and also increased the knowledge of the methods used to defraud businesses, consumers and society equally. This approach can only bring further benefits if further cooperation and responsible data-sharing takes place across all sections of society.

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