industry focus
Identity theft at an all time high
Identity fraud is now one of the biggest fraud threats facing members of the public, with cases soaring by nearly 25 per cent during the last year, according to the latest research from Cifas, the UK’s leading fraud prevention service which has seen a surge in cost-of-living scams.
The latest edition of Fraudscape identifies and analyses the latest scam trends based on 409,000 cases of fraudulent conduct recorded by the National Fraud Database in 2022.
The report reveals that last year witnessed the highest volume of cases of fraudulent conduct ever recorded to the National Fraud Database. Cases involving identity fraud soared by 23 per cent and now account for circa 68 per cent of all cases filed by Cifas members.
Although the banking sector continued to be heavily targeted there was a significant increase in cases of identity fraud attempted against the plastic cards and telecoms sectors during 2022.
Over the last couple of years the demand for credit card use has grown as a result of households becoming increasingly reliant on credit as the cost-of-living crisis deepens. In turn, this has made individuals more susceptible to approaches by criminals who offer fake deals for products and services in order to steal personal and financial information.
Most victims of identity fraud are over 31 years of age, while the data shows that there has been a significant rise in victims aged 61-plus as criminals turn their attention towards targeting older consumers.
The squeeze on living standards has resulted in a sharp increase in cases of false applications where a product or service is applied for using fake supporting information.
This type of fraudulent conduct rose by 40 per cent in 2022 when compared to the previous 12 months as individuals altered bank statements or other official documents to inflate their income in a bid to secure mortgages, loan products or goods.
Loan companies and plastic card issuers saw the biggest increases in cases of misuse of facility, which was the second highest recorded case type in 2022.
However, a large proportion of these cases continue to relate to bank accounts, with nearly 40,000 cases indicating money mule behaviour – where an individual allows someone else to use their bank account to transfer money, often keeping some of it for themselves.
The key age range for mule activity continues to involve those aged from 21 to 25, with social media remaining a key enabler in the recruitment of mules.
As the economic crisis deepens, loan products were also prone to first party fraud, with a 114 per cent increase noted in cases of misuse of a facility in 2022.
Mike Haley, Cifas’s CEO said: “The cost-of-living crisis has fuelled a significant surge in fraud, with cases filed to the National Fraud Database now at an all-time high. Criminals and career fraudsters have honed their techniques to steal and exploit personal information in order to obtain phones, loans and retail accounts in our names, subsequently leading to the biggest growth in identity fraud in a decade."
“In addition, we’ve seen a rise in individuals committing fraud to obtain loans and credit cards by using false documents or otherwise hiding adverse credit histories.”
He added: “Criminals are ruthlessly targeting everyone with fraudulent communications by phone, e-mail or SMS text message in order to steal their personal details and account passwords, PIN numbers or other credentials. The current surge in fraud means it’s crucial that individuals and businesses take extra care to protect their personal information and never divulge financial details or credentials that can be used to commit fraud.”
