There are now plenty of signs of economic growth, from rising spending to a jump in job opportunities, but on-going financial pressures mean lenders need to continue to be vigilant against first-party fraud.
It is also reflected by the level of unrelenting fraud in the UK– across all demographics and consumer segments.
The trend is typified by ID theft, organised crime and a significant spike in attempted third-party fraud – notably across current accounts, credit cards, savings and insurance. Even the automotive sector, which has seen steadily falling fraud levels during the past few years, hasn’t gone untouched and also reported an uptick in fraud. Of course, as with fraud across all sectors, it could be argued the rise is due in part to increased vigilance and scrutiny, particularly when set against rising car sales and improving economic conditions.
In the latest edition of our Interim Fraud Report, we have outlined the main fraud trends noted during the first six months of 2103. A brief snapshot of our insights and views is outlined below:
• During H1 2013, nearly 19 in every 10,000 applications received by financial services providers were found to be fraudulent – representing a modest increase from 18 in every 10,000 fraudulent applications prevented during the same period in 2012.
• Savings and deposit taking products, insurance, current accounts and credit cards continue to come under acute pressure from fraudsters.
• Current account fraud has seen a marked overall fall in the number of fraud cases found with 20 in every 10,000 applications recorded as prevented frauds in H1 2013, compared to 44 in every 10,000 during H1 2012.
• Detected fraudulent credit card applications, primarily due to ID theft, rose from 14 in every 10,000 applications in H1 2012, to 25 in every 10,000 in H1 2013.
• The automotive finance industry saw an uptick in the number of known fraud cases in H1 2013, with 21 in every 10,000 applications discovered to be fraudulent, up from 17 in every 10,000 applications for the corresponding period last year. It coincides with a 3.3% rise in new car sales to 1.3 million vehicles, between January and August last year – up by more than 40,000 on 2011. Fraud is now growing at a faster rate than new car sales in this sector.
• The number of insurance applications found to be fraudulent reached peak levels in H1 2013 with 14 false claims in every 10,000 applications – compared with 11 in every 10,000 in H1 2012. Nearly two out of three (65%) were found to be by consumers, or so-called first-parties.
• Despite instances of mortgage fraud falling, the sector still sees the highest rate of prevented fraudulent applications across all financial services products.
• Savings has seen a modest increase and a shift towards even more third-party fraud, which continues to account for nine out of 10 incidents.
• Traditional blue collar and welfare-dependent groups continue to be among the most likely to attempt first-party fraud, as well as also being victims of fraud.
• High-earners are increasingly being targeted by fraudsters and are particularly vulnerable to ID theft, although there is also growing evidence some members of wealthier demographics are also willing to attempt fraud.
Detailed information highlighting how and where we’re leading the fraud fight on behalf of consumers, industry and commerce can be found in the latest edition of our Interim Fraud Report. To read more simply click here.