Despite a decrease in the overall level of fraud recorded in 2010, study says the outlook is far from rosy
Despite a decrease in the overall level of fraud recorded in 2010, study says the outlook is far from rosy
CIFAS, the UK's Fraud Prevention Service, has today released Fraudscape: a 44-page report designed to throw light on the frauds recorded by over 260 CIFAS Members during 2010.
As previously revealed in CIFAS’ annual trends released in January, despite a decrease in the overall level of fraud recorded in 2010, the report found that outlook is far from rosy.
Decreases taken in context
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). And the misuse of facility accounted for 22% of all fraud cases, where 55% of these cases were associated with paying in false financial instruments. The agency said this could be potentially indicative of accounts being used for ‘money mule’ purposes, where funds are laundered or dispersed illegally through bank accounts.
It also pointed to the continuing migration of fraud to new sectors: fewer bank accounts and plastic cards were targeted by fraudsters (which saw 15% and 37% decreases respectively). This was only to be offset by increases of 30% in communications products and 34% in mail order, when compared with 2009 however.
Further analysis revealed that, while fraud targeting bank account products decreased by 15% in 2010, it still accounted for the largest proportion (31%) of all frauds recorded.
While the fact that nearly one in two 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.
Online shopping a target
The report largely attributed this 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.
Richard Hurley, CIFAS communications manager, commented: “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.”
