Sharp increase in financial fraud

by Gill Montia

Story link: Sharp increase in financial fraud

CIFAS, the UK’s Fraud Prevention Service, has published data showing a sharp rise in financial fraud during the first-half of 2007.

During the first six months of this year, 37,357 cases of application fraud were detected. Application fraud involves submitting application forms with false information, to obtain a credit facility or insurance). The figure represents a 19% increase on the same period in 2006.

The number of insurance claims found to be false also increased during the first-half of 2007, by 10%.

Whilst figures for identity fraud remained flat, with the number of cases detected at 39,261, the number of victims increased from 32,039 to 33,411.

In this area there has been a swing towards what is known as current address identity fraud, which in the first six months of 2007 made up 35% of identity fraud cases, compared with 25% during the same period of 2006.

In this type of fraud the victim lives at the same address as the one given on the fraudulent application form. The fraudster is often resident at the same property and will have access to the victim’s post.

So called previous address fraud involves the fraudster stealing another person’s identity and falsely claiming that the victim has recently moved house.

Credit reference agency checks are likely to be performed against the victim’s previous address, where in reality he or she is still resident.

The reasons for the swing towards current address identity fraud are unknown but the trend indicates the emergence of a particularly anti-social type of thief.