An analysis of fraud trends during the first half of 2010 reveals an alarming and continuing surge in identity fraud. The 265 organisations that are Members of CIFAS - The UK's Fraud Prevention Service - report:

• a 14% jump in identity fraud compared with the same period in 2009,
• a 22% increase in the number of victims of impersonation compared with the same period in 2009, and
• the likelihood of more problems in the future.

(Numerical tables are included in the Notes for Editors below).

Identity fraud increases despite better awareness

The recent media attention given to identity fraud - particularly the theft of a real person's identity by an anonymous attacker - has helped to ensure that knowledge and fear (of the effects) of identity fraud are now greater than before. Despite this, there has been a 14% increase in identity fraud; demonstrating that, behind the stories, lies a very large problem. CIFAS Communications Manager Richard Hurley explains: "There is no doubt that the phrase 'identity fraud' is commonly understood and appreciated in today's world. In spite of our increased awareness and understanding of some of the steps we can take to help prevent falling victim to identity fraud, however, the numbers continue to rise."

The human impact
 
Looking at this increase in terms of the number of victims provides even greater clarity. Over 50,199 victims of impersonation were recorded by CIFAS Members during the first six months of the year: an increase of 22% from the same period in 2009. This represents more than 275 instances of an innocent victim's identity being abused every day.

Victims of identity theft commonly describe feelings of helplessness, vulnerability and not knowing who to trust. This is in addition to the financial impact and time taken to rectify the damage.

Decrease in overall fraud levels no cause for complacency

The overall level of fraud recorded by CIFAS Members decreased by a little over 3% during the first six months of 2010 (in comparison with the same period of the preceding year). While such a decrease may seem like good news, this overall decrease only serves to highlight how prevalent identity fraud is currently, and there is very real cause for concern in the future.

Richard Hurley explains: "The past few years have seen the UK enter a period of recession and begin a slow climb out of it. Over this same period, there have been changes in the overall patterns of the fraudulent activity taking place: from a peak in the levels of application fraud (telling lies on applications for products or services), followed by a phenomenal surge in facility takeover (or account takeover) fraud and the re-emergence of identity fraud. With the first real signs of economic recovery beginning to be reported, there is every reason to assume that fraudsters will be taking notice and redoubling their efforts to take advantage."

Comment from CIFAS

Peter Hurst, CIFAS Chief Executive, warns: "The impact of fraud can often be difficult to quantify, but these figures really demonstrate that - in a landscape where overall fraud levels appear to have decreased slightly - there remains a high level of fraud, particularly identity fraud, taking place. The number of victims, too, only underlines the scale of the impact that fraud has.

"Headlines over the past year have been dominated with news telling us that banks and other financial services providers are being more careful about lending. As tentative steps to economic recovery are taken, therefore, and as political pressure to lend increases, what we can expect to see is some relaxation of the strict lending criteria that are currently in place. As a result, there is a danger that all lenders will see the fraud floodgates opened once again."

Notes to Editors:

1. CIFAS is the UK's Fraud Prevention Service with over 260 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 identified 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 six months of 2009 and 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.

Financial Benefits CIFAS Members have reported that in the last 5 years, they have prevented fraud worth £4.1 billion, by sharing data about fraudsters through CIFAS.

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.

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