Identity Fraud Cases at All-Time High

Identity fraud is now one of the biggest fraud threats to the UK public, with cases soaring by nearly a quarter over the last year, recent figures show.

The latest Fraudscape report by UK fraud prevention membership organisation Cifas revealed that identity fraud rose by 23% in 2022 and now accounts for almost 70% of cases filed to the National Fraud Database (NFD). 

Last year saw an unprecedented 409,000 cases of fraudulent conduct recorded by the NFD, the highest number ever recorded.

The Fraudscape report found that the banking sector continued to be heavily targeted. However, in 2022, there was a significant increase in cases of identity fraud attempted against the plastic cards and telecoms sector.

Of the total cases recorded, 68% (277,234) were reports of identity fraud, with the majority (74%) relating to current address fraud, up 16% on 2021. This filing reason is linked heavily to the plastic card sector, which saw a 37% increase in 2022.

Threat actors continue to target plastic cards in order to purchase goods that can be sold on. There has also been a rise in identity fraud against telecom products, where victim identities are used to purchase mobile phones to sell on.

False application reports increased by 40% compared to 2021, with nearly 24,000 cases, with increases seen within the bank account sector, mortgage sector, asset finance and loans.

77% of false applications came through online channels, but there has been an increase in applications coming through combined channels, such as online applications being finalised in branch (+188%, +261). There has also been a rise in false face-to-face applications, up 27% from 2021.

A large proportion of false documents identified in false applications are utility bills (40%), followed by bank statements (22%). The rise in false utility bills mainly relates to applications for bank accounts.

The report believes that continuing uncertainty around the UK economy and the cost-of-living crisis is responsible for the rise.

High inflation in the UK may lead to more consumers becoming susceptible to phishing and smishing campaigns offering services to help with finances, said the report.

There is an increased risk that threat actors will target consumers with existing products as lenders tighten affordability criteria on new applications due to economic uncertainty and high interest rates, it continued.

The report’s authors have called on businesses to use a layered approach to customer verification, particularly through digital channels.

Mike Haley, CEO of Cifas, 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 our personal information to obtain phones, loans and retail accounts in our names, 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 hiding adverse credit.

“Criminals are ruthlessly targeting everyone with fraudulent communications by phone, email or SMS text message in order to steal their personal details and account passwords, pin numbers or other credentials,” he said.

“The current surge in fraud means it is crucial that individuals and businesses take extra care to protect their personal information, and never divulge financial details or credentials that can be later used to commit fraud.” 

For more information and to read the full Fraudscape report, click here.

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