A new report from a leading credit reference agency has found that identity fraud rose sharply lastyear. The research from Experian found that seven in every 10,000 loan applications were found tobe fraudulent, up from 5 out of 10,000 in 2009.
The data also found that insurance fraud rose by 11 per cent in 2010, reports the Guardian.
‘First party fraud’ accounts for over 50 per cent of fraud attempts
Experian found that first party fraud – where someone knowingly supplies false information –accounts for just over half of fraud attempts against credit card companies, banks and insurers.
The Guardian reports that ‘the biggest targets of first party fraud were insurers and mortgagebrokers, with 97 per cent of fraudulent mortgage applications and 80 per cent of bogus carinsurance claims committed by first party insurers.’
Mortgage and insurance fraud on the rise
Over a quarter of fraudulent insurance claims in 2010 involved items being added to a list ofgenuinely stolen goods or a staged incident, according to Experian’s research.
Mortgage fraud – up 14 per cent in 2010 – typically involved applicants hiding addresses or poorcredit or lying about their employment prospects.
The newspaper also reported that ‘motor insurers have been hit by applicants failing to discloseprevious convictions and penalty points. Young and high-risk drivers trying to get cheap carinsurance by falsely naming a parent or friend as a main driver in a practice known as “fronting”account for about 8 per cent of false claims.’
Nick Mothershaw, director of Identity and Fraud at Experian, said: “Fraud in the UK is a growingbillion-pound illegal business, with fraudsters resorting to innovation and inventiveness to target anyperceived weaknesses in the system.
“Fuelled by the recession’s aftermath, it is likely that financial service providers could see fraudattempts rise during 2011.
Organisations must ensure they have the right defences in place whilestill being able to provide the convenience and experience genuine customers expect.”
