Current account fraud surged again in 2015, as new figures show it continues to be the most targeted financial product.
Detected fraud rates for current account applications soared last year from 73 in every 10,000 applications in January, to 156 in every 10,000 applications in December.
Current account fraud not only poses the immediate threat of emptying a customer’s account and any overdraft, but also often acts as a springboard to other lucrative financial products and further fraudulent activity. Fraudsters can use information gained from a successful attempt to then go on to open loans or credit cards.
The rise in current account fraud has also been a factor in tipping the overall balance between first-party fraud and identity fraud.
At the start of 2015, more than half (51%) of detected and prevented fraudulent applications across all financial products were attributed to first-party fraud while, just below half (49%) were a result of identity theft – or so-called third-party fraud. But by the end of the year the balance tipped significantly the other way, with 59% of fraud now accountable to identity thieves.
Current account fraud really came to the fore in 2015, with identity thieves acting as the chief culprits. The positive side to this is that the numbers represent detected and prevented fraud attempts, demonstrating the robustness of the protection systems in place for financial products. While it’s clear that the systems are working, both companies and consumers need to remain vigilant and alert to the evolving tactics of fraudsters which continue to get more sophisticated.
While fraud across most other financial products has remained at a consistent rate during the past year, credit card and insurance policy fraud also saw a substantial increase.
Credit card fraud stood at 36 in every 10,000 applications in January 2015, but steadily increased during the course of the year to 55 in every 10,000 applications. Similarly, insurance policy fraud stood at 37 in every 10,000 applications at the beginning of the year, but increased to 68 by the close of 2015. As with current account fraud, credit card fraud was also largely driven by identity theft.
To find out more, click here to view our interactive fraud dashboard, which provides the latest insight for anyone wishing to stay up to date with the latest fraud trends. It is the first of its kind in the UK and shows fraud rates by financial product as well as regional hotspots and high profile fraud facts.
Experian works closely with National Hunter and Insurance Hunter, the UK’s leading fraud prevention systems, operated by Experian on behalf of members. The systems enable financial institutions to cross-match applications against more than 100 million previous application records in order to spot commonalities and anomalies that are potentially indicative of fraud for further investigation.