UK credit card fraud rate jumps to five-year high

February 24, 2022: Credit card application fraud hit a five-year high in the last three months of 2021, new Experian insight reveals.

Latest data from the National Fraud Hunter Prevention Service, analysed by Experian, found the detected fraud rate for cards rose by 42% between October and December 2021, when compared to the previous quarter, the highest rate since 2017.

Typically, an increase in fraudulent activity is detected over the festive shopping period, but 2021 proved especially busy for organised fraudsters looking to take advantage of an increase in genuine applications to access credit using stolen or illegally obtained personal details.

Almost three-quarters of cases detected involved the fraudster using the victims’ current address to apply for credit, highlighting the importance of people doing what they can to keep their personal information safe and secure, especially when using online apps and social media.

Existing and emerging fraud trends are likely to continue to grow in 2022. Experian predicts established cold-calling and text scams, and fledging cryptocurrency schemes will become of increasing concern throughout the year.

Eduardo Castro, Managing Director, Identity and Fraud, Experian UK&I, 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 resource 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, such as fraud probability scores powered by Machine Learning to successfully identify and prevent fraud, without impacting the experience of genuine customers.

This has allowed lenders to automate more of the application process and decline questionable applications rapidly and efficiently, rather than flagging it for manual review.

New forms of authentication are also becoming prevalent. Pin numbers sent to a person’s mobile phone have become typical, while biometrics systems – both physical and behavioural – are becoming more familiar and accepted by consumers too.

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How to protect yourself protect yourself from identity fraud

• Don’t share too much personal information on social media, such as mother’s maiden name, home address or when you’re away. It’s important make sure your privacy settings are up to date across all platforms.
• When you move address, always re-register on the electoral roll as soon as you can. This helps ensure your details are no longer registered at your previous address. It’s a good idea to set up mail redirection for a while too.
• Make sure you have an individual unique password for each online account you have. This means fraudsters are less likely to gain access to multiple accounts.
• Ensure your home Wi-Fi has a strong password, never sign in into password protected accounts on unsecured public Wi-Fi and make sure you have up-to-date antivirus software
• If you receive emails or text messages always be cautious about attachments, links or telephone numbers. If in doubt, visit the company website and contact them directly.
• Check your credit report, for free, on at least an annual basis to look for anything suspicious. This will show any applications for credit or new accounts. You can also monitor your free Experian Credit Score to look for any significant changes.

What to do if you’re a victim of ID fraud

• Check your free statutory credit report, with all three credit reference agencies. You can then review all information that does not belong to you.
• Contact any relevant lenders to inform them of the fraudulent information
• Ask Experian, or a credit reference agency, to dispute the fraudulent information with all relevant companies and lenders. A notice of dispute will also be added to the fraudulent information.
• Add a password to your credit report. this is called a Password Notice of Correction and should be unique and only known to you.
• Add self-registration details with Cifas, the UK’s fraud prevention service. A credit reference agency can sometimes do this for you.
• Contact Action Fraud, the UK's national reporting centre for fraud and cyber crime.

Media contact:

Robert Goodman, PR Manager, Corporate & Business, UK&I, Experian

Tel: +44 7989 398 498 / Email: Robert.Goodman@Experian.com

About Experian

Experian is the world’s leading global information services company. During life’s big moments – from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers – we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organisations to prevent identity fraud and crime.

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