Fraud increases 20 per cent in one year

Overall fraud rate continued to rise, spurred on by current account and credit card fraud

Nottingham, UK 05 May 2016 – The overall fraud rate during Q1 2016 continued to grow reaching 54 in 10,000 (compared to 45 in 10,000 during Q1 2015), spurred on by fraudsters focusing their efforts on current accounts and credit cards.

The latest Fraud Index from Experian has also revealed an increase in ID theft within mortgage applications.  Historically, third party fraud has accounted for around 4 per cent of all mortgage application fraud.  During Q1 2016, the proportion of mortgage fraud committed by ID thieves increased to 6 per cent, the highest since 2012.

Nick Mothershaw, fraud expert from Experian, commented: “The increase from 4 to 6 per cent is worrying.  This is because third party mortgage fraud is very complex and not as easy to commit on a large scale as fraud related to other financial products, such as current accounts, can be. Because of the values involved, the impact on people’s lives can be devastating.  In many cases, fraudsters have either hacked databases or intercepted emails between individuals and their solicitors.  Large payments have been diverted and fraudsters have disappeared with the money.  We’d urge anyone who has fallen victim to these kinds of scams to contact Action Fraud.

“We are also seeing an increase in impersonations of the deceased within mortgage fraud.  Fraudsters use the ID of people who have recently passed away but who previously lived at a property.”

Other highlights include:

  • Despite the increase in the ID theft in mortgage fraud, the index revealed that overall mortgage fraud attempts dropped significantly during January, February and March this year, compared to the same period in 2015.  Falling from 83 in every 10,000 applications in Q1 2015 to 66 in every 10,000 applications in Q1 2016, it represents the biggest quarterly fall seen by the mortgage industry in the last three years.
  • Current accounts continued to top the charts for fraudulent applications at a rate of 126 in every 10,000 applications, compared to 81 in 10,000 in Q1 2015.
  • Credit card fraud took place at a rate of 46 in every 10,000 applications. This type of fraud has seen a steady increase in the past two years from the Q1 2014 figure of 33 in every 10,000 applications.  
  • The balance of fraud remains tipped towards identity theft with 56 per cent of all fraudulent activity in Q1 attributed to third party fraud, with 44 per cent classed as first party fraud.

Nick said: “Our latest fraud rate represents the amount of fraud that has been detected and prevented.  Fraudsters are not going to stop looking for new and evolving ways to scam people.  Fraud itself is viewed by many organisations as one of the biggest threats they are facing. Regardless of size, they are being targeted and the individuals that they service are bearing the brunt as much as the organisations themselves are.  Everyone has a responsibility and a role to play when it comes to tackling fraud.”

-ENDS-

 

 Notes to Editors

  • Nick Mothershaw is the UK&I Director of Identity and Fraud at Experian.
  • Nick is available for media interviews upon request.
  • Information is based on 2016 Experian fraud data. Experian works closely with National Hunter, the UK’s leading fraud prevention system, operated by Experian on behalf of members. It enables financial institutions to cross-match applications against more than 100 million previous application records in order to spot commonalities and anomalies that are potentially indicative of fraud for further investigation.
  • Once fraud is confirmed, people should contact our VOF team by emailing identityfraud@uk.experian.com or calling freephone 0800 0155 556.

Contact

Serj Hallam

Experian
0115 9922773

serjeet.hallam@experian.com

About Experian

We are the leading global information services company, providing data and analytical tools to our clients around the world. We help businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. We also help people to check their credit report and credit score, and protect against identity theft. In 2015, we were named by Forbes magazine as one of the ‘World’s Most Innovative Companies’.

We employ approximately 17,000 people in 37 countries and our corporate headquarters are in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil. Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2015, was US$4.8 billion.

To find out more about our company, please visit http://www.experianplc.com or watch our documentary, ‘Inside Experian’.