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Surge in number of fake current account applications

The rate of fraudulent current account applications has more than doubled over the last year, a credit checking company has warned.


Figures from Experian – which cover thwarted fraud attempts – show that by December 2015, 156 current account applications in every 10,000 were fraudulent, up from 73 in every 10,000 in January 2015.

A surge in fraudsters attempting to open current accounts using someone else’s stolen personal details is behind the figures.

In January 2015, 45% of detected current account frauds involved identity theft – but by December nearly two in every three (63%) fraudulent current account applications being detected involved ID theft.

Criminals see current accounts as a lucrative target as they can max out an overdraft as well as using the accounts as a “gateway” to commit other frauds, including making bogus loan and credit card applications.

The increase in current account fraud being detected has meant that overall, more than half (59%) of fraud attempts across all financial products covered in Experian’s report are attributed to identity fraud, up from 49% at the start of 2015.

The financial products covered include mortgages, credit cards, loans, savings accounts, insurance policies and insurance claims as well as current accounts.

Current accounts remain the financial products most targeted by fraudsters, according to Experian’s report.

While fraud across most other financial products has remained consistent, rates of credit card fraud and insurance policy fraud have also seen big increases over the last year.

By the end of 2015, 55 in every 10,000 credit card applications were detected as fraudulent, up from 36 in every 10,000 in January.

As with current account fraud, the increase was largely driven by fraudsters trying to use someone else’s stolen identity, the report said.

Insurance policy fraud rates increased from 37 in every 10,000 applications to 68 in every 10,000.

Explaining the rising insurance policy fraud detection rate, Experian said that more “ghost brokers” – people who sell cheap but bogus motor insurance policies – are being stopped in their tracks.

Nick Mothershaw, UK and Ireland director of identity and fraud at Experian, said: “Current account fraud really came to the fore in 2015, with identity thieves acting as the chief culprits.

“The positive side to this is that these numbers represent detected and prevented fraud attempts, demonstrating the robustness of the protection systems in place for financial products.

“While it is clear that the systems are working, both companies and consumers need to remain vigilant to the evolving tactics of fraudsters which become more sophisticated with each passing day.”

Experian’s fraud index is based on information from fraud prevention system National Hunter, which Experian operates on behalf of members.

It enables financial institutions to cross-match applications against more than 100 million previous application records to weed out potential frauds.