The analysis of fraud trends during the first quarter of 2010 by CIFAS - the UK's Fraud Prevention Service - reveals some notable facts: 

• a 19.86% increase in identity fraud when compared with the same period in 2009,
• the number of victims of impersonation increased by over 20% compared with the first quarter of 2009, and
• overall fraud levels remain consistent, with nearly 60,000 proven frauds identified in the first three months of 2010.

(Numerical tables are included in the Notes for Editors below).
 
Identity fraud threat more insidious than ever
 
Identity fraud has always been a sinister crime - fraudsters using the names and details of innocent victims to generate their criminal cash-flow. An increase in identity fraud of 19.86% in the first quarter of 2010 (compared with the same period in 2009), therefore, is cause for concern. As CIFAS has previously reported, however, the surge in identity frauds that make use of the victim's current address details (which are therefore more sophisticated and difficult to detect) is a trend that has become more pronounced during the past 12 months. A 44.73% increase in identity frauds where the facility, product, policy or claim was granted (fraud was proved when it was too late, only after the facility had been offered,) is proof of this sinister development.

CIFAS Communications Manager, Richard Hurley, comments: "The increase in the use of a victim's current address and details makes the 'impersonation' seem more realistic and, therefore, difficult to detect and prevent due to the applications seeming so plausible. The challenge for us all, therefore, is to battle against the sophisticated criminals that perpetrate these crimes."

Number of victims continues to rise
 
Unsurprisingly, in light of this increase in identity fraud, the number of victims of impersonation has also continued to rise. Nearly 27,000 victims of impersonation were recorded by CIFAS Members during the first three months of 2010: an increase of just over 6,000 (22.86%). Victims of impersonation frequently report feelings of uncertainty, helplessness and not knowing who to trust - on top of the financial impact suffered and the time taken to rectify the damage. The impact of fraud, therefore, must always be seen as something far greater than just a financial one.
 
Fraud figures remain constant
 
The first three months of 2010 actually saw a slight decrease (-1.37%) in the frauds recorded, when compared with the first quarter of 2009. This figure, unfortunately, must be seen in context. Between January and March 2010, CIFAS Members recorded 59,650 frauds - which is actually an increase of 350 on the frauds identified during the previous quarter (October to December 2009). Richard Hurley notes: "The fight against fraud is "a war of attrition". The changes in the types of fraudulent activity witnessed in the past two years demonstrate that fraud does not disappear - it simply adapts. While any decrease in fraudulent activity can be seen as a good thing, we must not lose sight of the fact that the figures remain consistently high and that fraud remains rife in the UK."

Comment from the CIFAS Chief Executive
 
Peter Hurst, CIFAS Chief Executive, comments: "In the run-up to the election, as the UK economy tentatively edges itself out of recession, and where all sectors of society have to look at becoming more prudent, these figures show that preventing fraud must become a priority. The National Fraud Authority estimated the cost of fraud to the UK economy at £30 billion per year - and the best way to reduce this is to prevent fraud. Our figures demonstrate that fraud is endemic in the UK. The damage inflicted by fraud is far more than just financial - its repercussions reverberate throughout the economy and society.  In the coming months we hope to see the prevention of this crime being given the attention that it demands by a new Government."

Notes for Editors

1.   CIFAS is the UK's Fraud Prevention Service with over 265 Member organisations spread across banking, credit cards, asset finance, retail credit, mail order, insurance, investment management, telecommunications, factoring and share dealing.  Members share information on frauds in the fight to prevent further fraud.  CIFAS is unique and was the first data sharing scheme of its type in the world.  Other schemes modelled on CIFAS have been set up in Southern Africa and Germany.
 
2.  The following tables show a summary of the statistics and the number of fraud cases recorded by CIFAS Members during the first three months of 2010, broken down by the type of fraud identified.  Definitions are given below the table.

Fraud Cases Identified refers to each proven instance of fraud identified by CIFAS Members and filed to the CIFAS database.  Members must have sufficient evidence to take the case to the police although it is not mandatory that they do so.  A fraud case can involve multiple subjects and multiple addresses.

Identity Fraud cases include cases of false identity and identity theft.
 
Application Fraud/False Insurance Claim relates to applications or claims 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.
 
Asset Conversion relates to the sale of assets subject to a credit agreement where the lender retained ownership of the asset (for example a car or a lorry).
 
Misuse of Facility is where an account, policy or other facility is used fraudulently.

3.  CIFAS press release: Identity fraud victims increasingly targeted at their current address (8 April 2010)

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