Identity and account takeover fraud constitute the majority of fraudulent activity

Analysis of the frauds recorded by Members of CIFAS – the UK’s Fraud Prevention Service during the first nine months of 2011 reveals that identity fraud remains the most virulent fraud currently being committed in the United Kingdom.

Most alarming is the fact that the total number of identity frauds being recorded in the first nine months of 2011 has increased slightly (by 2%) when compared with the same period of last year, proving that this most prevalent of fraud crimes shows no sign of abating and is helping to fuel an overall rise in fraud levels.

Confirmed fraud figures reveal true spread of data driven crime

Identity fraud can involve the use of a completely fictitious set of identities, or the impersonation of an innocent victim (using their details) in order to obtain products or services in the victim’s name. This is different from, but exacerbated by, account takeover fraud: where a criminal will have gained access (e.g. through computer hacking or interception of a credit card) to another person’s account details and taken over the account.

The range of criminal techniques used, however, will always have a devastating impact upon the victims: individuals and small and large businesses alike.

The most worrying fact is that identity fraud and account takeover fraud together constitute more than a half (nearly 57%) of all confirmed frauds that have taken place in the first three quarters of 2011.

CIFAS Communications Manager, Richard Hurley, states: “The fact that more than 1 in 2 of all frauds relate to the theft or misuse of data should send a crystal-clear warning to organisations and consumers alike: look after your personal data and information about you! Whether it is poor security settings on personal accounts, lack of verification processes, or not co-operating with other bodies to clamp down on organised fraudsters, we all have an important part to play in stopping information falling into criminals’ hands. Fundamentally, it’s time for everyone of us to start treating data in the same way that we would guard a prized possession; as something to be secured and protected.”

Fewer victims of impersonation is no cause for celebration

The number of people who have been fraudulently impersonated has decreased slightly; by 1% in the first three quarters of the year. As Richard Hurley explains: “This slight decrease may seem welcome, however the overall picture is anything but good news. The decrease in victims of impersonation masks an increase in the overall level of identity fraud: which means that criminals, therefore, are trying to ‘create’ identities to defraud organisations. In the end, it is still the innocent customer and consumer that suffer through higher premiums and prices, or the need to pay higher taxes or VAT to cover losses by the public sector.”

Fighting Fraud Together

Fighting fraud, by sharing information about confirmed frauds in order to prevent the fraudsters perpetrating further crime, is a key weapon currently used by businesses. Further participation in such schemes by the public sector would help prevent millions being lost to those fraudsters who attack the benefits system in the same way.

As Richard Hurley, concludes: “These figures prove irrefutably that the old maxim of ‘knowledge is power’ is correct. Knowing somebody’s personal or financial details is a licence to print money for the modern fraudster and the inexorable spread of data driven financial crime is deeply disturbing.

“We all have the right to demand that organisations which have our details are secure and look after them, but we also all have a responsibility to look after our own details. Without doing so, we are effectively handing access to our bank accounts over to a complete stranger.”

Notes to Editors:

1.      CIFAS is the UK's Fraud Prevention Service, a not for profit Membership organisation with over 250 cross sector Members including banking, credit cards, asset finance, retail credit, mail order, insurance and telecommunications with a number of public sector bodies preparing to join.  Members lawfully share information on frauds in the fight to prevent further fraud. 

2.      The following table shows a summary of fraud figures recorded by CIFAS Members from the first three quarters of 2010 and 2011.  Definitions are given below the table.

Number of frauds refers to the frauds recorded by CIFAS Members that have a legal 'standard of proof'. This means that participating organisations must file records that are composed of factual and accurate information only and have a sufficient legal standard of proof to confirm that the case is fraudulent. As a result, all figures are of confirmed fraud cases only.

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

Victims of Impersonation refers to the instances where a fraudster has used the identity details of an innocent party

Account Takeover or 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.

3.      CIFAS Protective Registration is a service that enables individuals to seek protection against possible impersonation attempts when they have good reason to believe that their details might be used by a fraudster. A Bulk Protective Registration Service is also available for organisations who have fallen victim to a data breach. Further details can be found at www.cifas.org.uk/pr

4.      CIFAS supports this year’s National Identity Fraud Prevention Week which commences on 17 October 2011. This year’s campaign is also supported by the Metropolitan Police, City of London Police, Fellowes, Norton, the National Fraud Authority, IFCAG, Equifax, Scottish Business Crime Centre, e-Crime Scotland, the Home Office and the Royal Mail.

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