An analysis of fraud trends during the first half of 2009 reveals a continuing surge in fraudulent activity. The 260 organisations that are Members of CIFAS - The UK's Fraud Prevention Service - report:

• a 43% jump in the number of victims of impersonation,
• a 74% increase in identity fraud compared with the same period in 2008, 
• and a continued rise in facility takeover frauds.

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

Number of fraud victims reaches worrying level

In the first half of 2009 over 52,000 victims of impersonation were recorded by CIFAS Members. This represents a truly alarming 43% surge from the first half of 2008. Richard Hurley, CIFAS Communications Manager, comments: "The traditional focus on the ways in which fraudsters operate draws attention away from the number of fraud victims being recorded, and these figures surely underline the very real human cost of fraud in the recession."

The ever-present scourge of identity fraud
 
A 74% increase in the level of identity fraud (which includes both victims of impersonation and the creation of a fictitious identity by the fraudster) indicates that, while this period of recession has revealed new methods of fraud, fraudsters return to 'old favourites' with a vengeance. Fraudsters look to swindle individuals and companies alike: filleting out profits and leaving a trail of damage in their wake. It is worth noting that forged or altered UK passports are the most commonly used document in support of fraudulent applications.

Facility takeover fraud continues its persistent rise

During the first half of 2009, a 40% increase in facility takeover (also known as account takeover) frauds - where the fraudster gains access to and pilfers the legitimately obtained monies or services of innocent victims - continued the alarming upward trend first witnessed in 2008. CIFAS Chief Executive Peter Hurst notes that "the human cost of facility takeovers cannot be underestimated as (like identity fraud) it attacks a victim's sense of security and undermines their confidence."

Glimmers of hope

As previous CIFAS fraud trends releases have noted, the economic slowdown goes hand in hand with the rise in fraud. The escalation in the numbers of victims, identity frauds and facility takeover frauds in the first half of 2009 confirms this.

Within the bad news, however, there is some much-needed good news. A 25% decrease in cases of application fraud (where fraud is committed by including material lies on application forms for finance, insurance or other products) demonstrates that the fight against fraud is succeeding on this front, as fewer people try to commit fraud through attempts to exaggerate income or hide bad credit histories.

In addition, an 11% increase in the financial losses avoided through fraud data sharing by CIFAS Members has been reported in the first six months of 2009, when compared with 2008.

Richard Hurley, CIFAS Communications Manager, explains: "Talk of an economic recovery may be premature but there is some good news. While fraud and fraudsters continue to wreak havoc on businesses and consumers alike, it is very reassuring to see that fraud departments are doing an excellent job in a period of unprecedented activity, accurately identifying frauds and preventing further losses."

Comment from the CIFAS Chief Executive

Peter Hurst, CIFAS Chief Executive, warns: "The recession has an impact throughout society. Fraudsters will not let this stop them, however, whether they are acting out of personal desperation or more sinister, organised, aims.

"The rise in the numbers of victims, and these very specific types of fraud demonstrate that fraudsters have no regard for economic, social and personal fragility. While we all look for solutions to the hardships imposed by the current climate, however, these figures focus attention sharply on what responsible businesses and public sector organisations can achieve through sharing data on proven frauds to reduce losses and ease the burden of the recession upon us all."

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, 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.  This is the amount of money that Members of CIFAS reported that they have saved through being alerted to previous frauds by CIFAS warnings. 

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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