The analysis of fraud trends during 2009 reveals a nine per cent increase in the overall level of fraud when compared with the previous year according to CIFAS, the UK's Fraud Prevention Service.
This rise has been driven by some particular factors, most notably the unwelcome return of identity fraud which has lead to a 31 per cent escalation in the numbers of victims of fraud and a 55 per cent increase in false insurance claims and a change in the nature of them as the effects of the recession intensify
Identity fraud - the use of a stolen or false identity to obtain goods or services by deception – was up 32 per cent in 2009 from the level recorded in 2008.
CIFAS believes this rise has a direct link to the recession. Fraudsters have seen the reduction in the overall amount of lending taking place during 2009, discouraging many from attempting to commit application fraud (e.g. the use of lies and forged documents in an attempt to obtain products or services).
This has led to a 25 per cent reduction in application fraud but has meant that they have returned to stealing the identities of others in order to gain products and services.
With over 85,000 victims of impersonation, and 24,000 victims of takeover (whose accounts have been hijacked by fraudsters) recorded in 2009 (increases of 35 per cent and 16 per cent respectively on 2008 and an overall increase in victims of 31 per cent), the very real impact of fraud is underlined.
While
insurance fraud has long been difficult to prove (for instance, adding to claims for stolen cars or laptops other items such as mp3 players, mobile phones, cameras and wallets), the 55 per cent increase in cases filed by CIFAS Members during 2009 reveals a trend towards claimants being even more dishonest.
The 55 per cent increase in fraudulent claims is driven more by a surge in claims for staged or completely fictitious events than inflated claims for damage and losses actually incurred.
Facility takeover fraud (where the fraudster uses an account, policy or other facility for a fraudulent purpose such as receiving fraudulent payments into a bank account, or evading payments on
credit card or loan accounts) rose by 16 per cent from 2008. This means an increase of over 250 per cent during the past 24 months.
A significant contributory factor to this trend is the prevalence of ‘phishing' emails (sent by fraudsters to look as though they come from a bank or credit card company, for example, asking for personal details which are then used to plunder the victim's account).
"It’s well-known that a rise in fraud goes hand in hand with a recession,” said Peter Hurst, chief executive at CIFAS. “The trends identified by CIFAS Members during 2009, however, demonstrate that it’s not just a few thousand extra people turning to crime to make ends meet. It is a whole criminal element changing its behaviour. Fraudsters adapt their methods in response to changes in the economy, finding and exploiting any area of weakness.”
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