New figures from Experian show the overall rate of fraud at point of application for financial products increasing by 4% in 2011, to just over 17 in every 10,000 applications.
In addition to record cases of mortgage application fraud, the rise was fuelled by growth in both insurance and current account application fraud.
Last year, current account fraud increased to 36 frauds in every 10,000 applications, up from 23 in every 10,000 in 2010, with 60% of the attempted frauds committed by first parties.
Demographically, Experian puts almost a quarter of current account application fraud down to young, poorly-educated individuals living in small towns, while 40% emanated from third-party identity fraudsters seeking to open accounts as a springboard to obtain other credit products, or for money laundering purposes.
Meanwhile, insurance fraud increased to 11 in every 10,000 applications in 2011, with the proportion up 23% on 2010, and fraudulent applications for mortgages increased by 8%.
Not all financial products saw fraud rates increase: credit card fraud continued to fall, from 19 in every 10,000 applications in 2010 to 12 in every 10,000 in 2011.
The rate at which fraudsters target new credit cards is now almost a quarter of the level seen 2006, when 45 in every 10,000 applications were fraudulent.
Automotive finance providers have also seen fraud rates fall, to 23 in every 10,000 applications, down from 38 in every 10,000 during 2010.
Nick Mothershaw, UK&I director of identity & fraud at Experian, comments: “It is vital that financial service firms accurately validate and verify the identities of the people they interact with and use every technique at their disposal which includes validating income claims and checking for signs of an adverse credit history.”
Comments (0)