ID fraudOn the plus side, fraud went down in 2013 by 11 per cent from the levels recorded in 2012 – the first year-on-year drop since 2010 – but fraud remains at a much higher rate than in pre-recessionary times.
Explaining the decrease
CIFAS says that the 11 per cent decrease in fraud levels is proof of the positive preventative impact of counter fraud measures such as data sharing.
Richard Hurley, CIFAS communications manager, noted: “The decrease in fraud comes on the back of The Audit Commission’s Protecting the Public Purse 2013 which also reported a reduction in the number of frauds, and is good news for those who participate in the collective effort to prevent fraud.
“On the other hand, the fraud has not necessarily ceased to exist. Much comment has been made over the past year by senior police and business figures that fraud has increased.
“What this demonstrates, therefore, is that fraudsters have turned their attentions to targets that they deem to be more vulnerable: namely those who are not making best use of existing systems: meaning that public and private money is effectively being left unguarded for criminals to take.”
Identity crime: still the biggest problem
Over 221,000 confirmed frauds were identified during 2013 and 60 per cent of these are down to identity crimes – where fraudsters use a person’s identity data to impersonate them (identity fraud) or hijack an individual’s existing account (facility takeover fraud).
There were more than 108,000 individual instances of identity fraud, a drop of 12 per cent on the year.
Hurley said: “This is the third year that identity crimes have accounted for such a huge chunk of fraud in the UK. Sadly, it also confirms that still not enough is being done by individuals and organisations.
“Consumers have the right to demand that organisations handle their data securely, and increase their anti fraud efforts and stop fraud before someone financially loses out. But collectively, every one of us has to be expected to take responsibility to do all that we can to keep ourselves safe.
“Disabling firewalls, not installing anti-virus software, using good online practice and strong passwords: these have long been messages that CIFAS and others have delivered. This is why our guide Protecting Your Online Information has been released to support the Home Office’s Cyber Street campaign. The figures, however, indicates that there is still much to do.”
Changing times, changing targets
Frauds against mail order and bank accounts have experienced sizeable decreases, while loan and plastic card (including store and credit cards) accounts have seen notable surges. Plastic cards are now the product most commonly targeted by fraudsters - up by 24 per cent from the levels of 2012 and accounting for 30 per cent of all confirmed fraud in 2013.
As CIFAS has long commented, changes in annual patterns of fraud occur each year: 2013, however, was notable. While bank accounts are the most commonly targeted product, levels of fraud have reduced when compared with 2012.
Similarly, mail order account providers have reaped the benefit of enhancing their security procedures by seeing much less fraud in 2013. Fraud targeting credit or store cards went up by 24 per cent and loan accounts jumped by 55 per cent – this included secured, unsecured and payday loans).
CIFAS chief executive Simon Dukes concluded: “The fact that recorded fraud has gone down is great news, but this is no cause for complacency. Fraudsters have turned their attention to organisations who are not making best use of existing solutions, and will continue to look for new products or channels and opportunities to attack once again.
“In 2010, CIFAS saw a similar reduction in fraud: and warned that this could just be the calm before the storm. What followed was two years of unprecedented surges. The figures for 2013 contain many variations and – therefore – similar caution must be exercised; as fraudsters will not have disappeared completely, but will have sought out new targets.
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