Current account fraud up by 23% in 2012

A new study from data firm Experian suggests that current account fraud is increasing.

The study says that fraud is at a three-year high and that one of the main reasons is individuals lying about their finances.

Experian’s data says that 44 out of every 10,000 current account applications were fraudulent in the first three months of 2012, a 23 per cent increase on the final quarter of 2011.

This is the highest rate since Experian began collecting data for current account fraud in 2009 and was the most significant contributor to the 16 per cent overall increase in financial fraud rates in the period.

The most common form of financial fraud is when individuals do not reveal certain personal circumstances such as bad credit history so that they are not turned down for a bank account, mortgage or overdraft or when they exaggerate income or other data to be accepted for overdrafts or other financial products.

The most common type of current account fraud involves individuals trying to use an account to pay for goods or services, knowing that there are not enough funds in it to cover the payment.

Meanwhile, there has been an increase in credit card fraud in the first quarter of 2012. It has risen from 10 cases in every 10,000 applications to 14 and attempted identity fraud on credit cards went up from five to eight cases per 10,000 applications.

Insurance fraud also increased in the period with 13 in every 10,000 applications found out to be fraudulent, the highest level since late 2009.

However, fraudulent loan applications fell to the lowest level ever recorded by Experian since it began collecting data on loans in 2006. Four in every 10,000 applications were deemed to be fraudulent, a drop of 38 per cent on the previous quarter. Attempted mortgage and savings fraud also fell compared to the previous quarter.

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