Financial fraud doubles in three years

Research by Credit Industry Fraud Avoidance shows that the number of fraud applications approved in the UK has more than doubled.

In 2004 CIFAS says it found 7,200 cases where fraudulent applications were successful in obtaining an insurance policy or credit agreement.

By 2007 though the number of successful fraudulent applications had rocketed to a whopping 14,500.

The research has also found people are being turned on to fraud sooner, getting into debt quicker and fraud at a younger age.

Figures are based on application fraud cases filed on the investigators database.

The number of application fraud cases filed on the CIFAS database increased more than 24% in 2007 compared to 2004, a rise of 15,000 cases.

In each case individuals lied or used false documents to support an application for credit, insurance and other products.

Products where fraudsters have seen increasing success since 2004 include: bank accounts, plastic cards and to a lesser extent mortgages, although communications products and loans have seen improved prevention rates.

Lies frequently included on applications attempt to conceal poor credit history or exaggerate the time spent by an applicant at a specific address.

In addition, the use of false documents to support an application has increased considerably since 2004. The false documents most frequently used to support an application are passports, utility bills and bank statements.

In 2004, the average age of an application fraudster was, for men, just over 38, and for women, 37 and a half. By 2007, that had reduced to 35 years for men, and for women, just under 34 years of age.

Peter Hurst, chief executive of CIFAS, says: “This research shows very clearly that all organisations need to be vigilant when looking at applications.

“The increased use of false documents means that front-line staff must be trained to spot them.

“This training should not be confined to identity documents like passports, where guidance in how to spot fraudulent ones is readily available. It should also concentrate on other documents such as utility bills and bank statements.”

“Those who think that lying on application forms will give them any advantage need to realise that their efforts are counter-productive.

“Fraud data sharing means that such lies are easy to detect and, far from enhancing an applicant’s chances, will be detrimental to their application. We are all determined to make the UK a hostile place for crime of this type.”