Recession pushes up fraud

Friday, 30 October 2009 06:40

Financial fraud is rising as the recession forces some people to take desperate measures and criminal gangs expand their reach.

Data from the UK fraud prevent service Cifas saw an 11.4 per cent rise in fraudulent activity over the first nine months of the 2009.

A total of 175,836 cases were identified causing losses of £637.6 million.

Cases of identity fraud are up 33.1 per cent, false insurance claims were up 62.9 per cent and facility take-over fraud was up 23.1 per cent.

Richard Hurley, at Cifas, said: "These figures can partly be explained by the recession.

"As economic conditions constrict cash-flow, changes are seen in fraudulent behaviour and the overall level of fraud increases."

However, he added: "What should not be forgotten, however, is that organised crime no longer strictly means syndicates of criminals with personal interaction.

"Organised crime can equally mean the sale of identity information online to an anonymous bidder, who then uses this information to impersonate an innocent victim and make fraudulent transfers into this account before withdrawing them - without the fear of being traced."

The statistics also show a 38 per cent rise in 'misuse of facility fraud', where a bank account or credit card is used to receive fraudulent payments, indicating that the recession is "revealing a network of rogue transactions across the economy", Cifas claimed.

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