Fraud increases with credit crunch
Fraud prevention service Cifas has warned the slowing economy is leading to more cases of fraud.
Fraud increases with credit crunch" class="imageframe alignright" height="200" src="http://pictures.directnews.co.uk/liveimages/card+fraud+protection_1455_18576559_0_0_7011276_300.jpg" width="200"/>Fraud prevention service Cifas has warned the slowing economy is leading to more cases of fraud.
In the first quarter of 2008, fraud cases rose ten per cent, and 52,286 cases were reported in total.
Cifas chief executive Peter Hurst said: "These figures demonstrate how, in a time of economic change and uncertainty, patterns in fraudulent activity also change.
"The increase in application fraud (often to hide adverse credit history) demonstrates that because people are getting into debt earlier, and because the 'credit crunch' has diminished their access to finance, they are now resorting to fraudulent applications for funds."
Criminals are also getting increasingly sophisticated with their methods, Cifas said.
A 146 per cent rise in 'facility takeovers' – where a criminal impersonates a victim in order to take over and control one or more of their existing accounts – was recorded.
Kate Beddington-Brown, Cifas head of communications, said: "Although it is difficult to know the reasons for this increase, it could be attributable at least in part to the prevalence of online 'phishing'.
"The use of an increasing number of sophisticated spoof emails and websites designed to deceive recipients into divulging personal financial data such as credit card or bank account numbers and passwords was highlighted in a recent report by APACS - The UK Payments Association. This demonstrates how important it is for the general public to be aware of such scams."
Identity fraud cases fell 19 per cent, but fraudsters are now switching to 'previous address fraud' where the fraudster steals another person's identity and falsely claims that the victim has recently changed address.
Due to the short time at the alleged 'new' address, any credit reference agency checks are performed primarily against the 'previous' address.