Fraudscape: report reveals the UK’s fraud landscape in 2010
CIFAS - the UK's Fraud Prevention Service, today releases Fraudscape: a 44-page report that lays bare the frauds recorded by over 260 CIFAS Members during 2010, and examines the patterns in the context of previous years.
As previously revealed in CIFAS’ annual trends press release (20 January 2011), despite a decrease in the overall level of fraud recorded in 2010, the outlook is far from rosy because:
- even after taking into account the 7% decrease in 2010, fraud has still increased by 25% over the past five years. In 2010, 217,385 frauds were recorded to the National Fraud Database by CIFAS Member organisations.
- identity fraud now accounts for nearly half of all frauds recorded (47% in 2010).
- misuse of facility accounted for 22% of all fraud cases, and 55% of these cases are associated with paying in false financial instruments – potentially indicative of accounts being used for ‘money mule’ purposes (where funds are laundered or dispersed illegally through bank accounts).
- the continuing migration of fraud to new sectors: fewer bank accounts and plastic cards were targeted by fraudsters (15% and 37% decreases respectively) only to be offset by increases of 30% in communications products and 34% in mail order, when compared with 2009.
The small decrease in fraud in 2010 is no cause for complacency. In the context of numerous shifts in fraudster activity during the last few years, the frauds recorded in 2010 reveal several complexities:
- While fraud targeting bank account products decreased by 15% in 2010, it still accounted for the largest proportion (31%) of all frauds recorded.
- The nature of many misuse of facility frauds points towards a rise in accounts being used for money laundering and the use of ‘money mules’. In 2010, this was associated with over half of all misuse of facility frauds.
- Furthermore, the increased use of savings accounts being misused to lodge unauthorised or fraudulent payments also marks a further shift in the way that such activity is carried out, with frauds targeting personal fixed notice savings accounts remaining relatively low in volume but more than doubling in 2010 from 2009 levels.
- While the fact that nearly 1 in 2 of all frauds recorded were identity frauds is alarming, the most worrying aspect is that more identity frauds were recorded as having been successful: almost two thirds in 2010 compared with 56% in 2009. This can be largely attributed to a decrease in frauds for those types of products that traditionally have lower success rates (such as bank accounts and plastic cards) and higher rates for those products which have different security checks or processes, such as online shopping, where there is less necessity to provide identifying documentation such as passports or utility bills. It also demonstrates the very real presence of data compromise; as fraudsters are able to amass large quantities of personal data, to use for impersonations.
Other trends and explanations – such as identity fraud on loan accounts being predominantly attempted online or by phone – are presented throughout Fraudscape, along with a range of maps, figures, analysis and definitions which reveal the truth about fraud in the UK today.
Comment from CIFAS – the UK’s Fraud Prevention Service
Richard Hurley, CIFAS Communications Manager, comments: “The findings presented in Fraudscape clearly demonstrate the benefits of mutual collaboration, in bringing about a holistic understanding of an immense problem. While the small decrease in fraud identified in 2010 is welcome, the threat has not gone away, and it must be viewed in its proper context: as the latest in a series of changes that have taken place over several years.
“Whether it is malicious software, data compromise, inflated insurance claims or money laundering through bank accounts, fraud is a pernicious crime whose effects are widespread and whose prevention can only come about through cross sector collaborative measures. The findings presented in Fraudscape can be considered a tip of the iceberg in terms of society at large, thus proving clearly that industries should not operate in silos, and other sectors would also benefit from pooling their resources in order to stop fraud.”
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 and the public sector. 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.
7 Mar 2011