Identity fraudsters are increasingly applying for loans and credit cards, with instances of insurance and first party fraud also rising, says Experian
The number of attempts by fraudsters to take out loans using stolen identities rose sharply last year, according to a report by Experian.
Seven in every 10,000 loan applications were found to be fraudulent, up from five in 2009. Insurance fraud on the whole has risen by 11% and experts fear this figure could rise further as people struggle in the aftermath of the recession.
Young single people living in rented and shared accommodation, and wealthier people in fashionable inner London suburbs, were found to be those most targeted by ID fraudsters.
First party fraud, when a person knowingly supplies false details, is rising and now accounts for slightly more than half of fraud attempts against credit card companies, insurers and banks. The biggest culprits are thought to be single people on limited incomes living in rented accommodation, as well as young professionals with university education.
Overall, London remains the fraud capital of the country, with Slough and Birmingham the only areas in the top 10 first party hotspots outside the M25. There were seven attempts for every 10,000 adults in Greater London during 2010 ? more than twice the number than the north-west, the next busiest region. East Ham in London recorded the most incidents, with 29 attempts for every 10,000 residents, followed by Stratford with 14.
The biggest targets of first party fraud were insurers and mortgage brokers, with 97% of fraudulent mortgage applications and 80% of bogus car insurance claims committed by first party insurers.
Mortgage fraud attempts, which increased by 14% last year, typically involved people lying about their employment prospects and personal finances, or trying to hide previous addresses or poor credit histories; more than a quarter of fraudulent home insurance claims made last year involved a staged incident or items being added to a list of otherwise genuinely stolen goods.
Motor insurers have been hit by applicants failing to disclose previous convictions and penalty points. Young and high-risk drivers trying to get cheap car insurance by falsely naming a parent or friend as a main driver in a practice known as "fronting" account for about 8% of false claims. Experian said fraudsters are also increasingly staging accidents and then claiming on insurance policies set up in a different name.
Nick Mothershaw, director of Identity and Fraud at Experian, said: "Fraud in the UK is a growing billion-pound illegal business, with fraudsters resorting to innovation and inventiveness to target any perceived weaknesses in the system.
"Fuelled by the recession's aftermath, it is likely that financial service providers could see fraud attempts rise during 2011. Organisations must ensure they have the right defences in place while still being able to provide the convenience and experience genuine customers expect."
Source: http://www.guardian.co.uk/money/2011/apr/13/identity-fraud-continues-rise
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