Communications fraud rockets as economy bites

Analysis of the frauds recorded by the 260 Member organisations of CIFAS – the UK’s Fraud Prevention Service during the first nine months of 2011 reveals a 34% increase in fraud related to communications products, when compared with the same period in 2010.

That communications products (e.g. smartphone handsets, mobile broadband accounts, etc.)  should experience an increase in fraudulent activity is, perhaps, unsurprising considering that they are increasingly viewed as an essential rather than a luxury item. More alarming, however, is the 64% surge in identity fraud committed or attempted by individuals trying to gain a communications account.

Who pays the bill?

The surge in identity fraud on communications products is accounted for by massive rises in the levels of both impersonation of the victim at their current address (also known as current address fraud – a 93% increase compared with the first three quarters of 2010), and the use of completely fictitious identities (an 85% spike).

CIFAS Communications Manager, Richard Hurley, notes: “The rise in current address fraud alarms because it signifies either that fraudsters are becoming increasingly sophisticated (as it is more difficult to impersonate someone at their address and then try to intercept goods or paperwork), or it demonstrates that friends, family and co-habitees are involved. Allied to the similarly enormous increase in the use of completely false identities, this surely indicates that communications products have become so essential that fraudsters not only obtain goods or handsets to sell on but will also attempt to use any identity in order to avoid becoming liable for bills.”

Communications products unlikely to be sacrificed in times of economic hardship

An obvious explanation for the increase in communications related identity fraud is the current economic situation. Further evidence of this is provided by the 20% increase in misuse of facility cases. Richard Hurley comments: “nearly 100% of this increase can be accounted for by regular payment fraud – where fraudulent direct debit instructions are given in an attempt to evade the payment of bills. The reality of the situation is that the communications product, device or service has become so embedded in our lives that many of us seem unable to do without them. With sacrifices having to be made by most individuals and households, these figures depressingly indicate that many people feel that, economically, they have no choice but to attempt fraud in order to continue receiving such services.”

Notes to Editors:

1. CIFAS is the UK's Fraud Prevention Service, a not for profit Membership organisation with over 260 cross sector Members including banking, credit cards, asset finance, retail credit, mail order, insurance, telecommunications and the public sector.  Members lawfully share information on frauds in the fight to prevent further fraud. 

2. The following tables show a summary of communications fraud cases recorded by CIFAS Members, broken down by the type of fraud identified.  Definitions are given below the table.

Application Fraud relates to applications with material falsehood (lies) or false supporting documentation where the name has not been identified as false.

Facility Takeover Fraud occurs where a person (the 'facility hijacker') unlawfully obtains access to details of the 'victim of takeover', namely an existing account holder or policy holder (or of an account or policy of a genuine customer or policy holder) and fraudulently operates the account or policy for his own (or someone else's) benefit.

Identity Fraud cases include cases of false identity and identity theft.

Misuse of Facility is where an account, policy or other facility is used fraudulently.

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