CIFAS report: data-driven ID crime at “unprecedented” levels

130,706 confirmed frauds were recorded to the National Fraud Database by CIFAS members in the first half of 2012: a 5% increase from the second half of 2011.

The use of fake identity details, or the impersonation of an innocent victim (Identity Fraud), now accounts for one-in-two of all frauds identified.

Account – or facility – takeover frauds, meanwhile, constitute 15% of all frauds, meaning that nearly two thirds of all frauds (65%) now relate directly to the abuse of identity details such as dates of birth, postcodes, e-mail addresses and passwords.

Fraudulent misuse of an account by the account holder constitutes 20% of all frauds, demonstrating that the economic conditions facing many continue to have a knock-on effect in terms of fraudulent actions.

Also, bank accounts and plastic card accounts (eg credit or store cards) remain the most popular targets for fraudsters; though bank account fraud has decreased by 13% while plastic card fraud increased by 15% during the first half of 2012 when compared with the previous six-month period.

These are the key findings of the Fraudscape Bulletin 2012, just published by CIFAS (the UK’s dedicated Fraud Prevention Service).

Personal details “the most valuable” for fraudsters

While the 5% increase in overall fraud levels during the first half of 2012 is noteworthy enough, the fact that identity fraud (the use of a false identity or the identity details of another person) now accounts for 50% of all frauds is unprecedented.

In addition, 15% of all recorded frauds in the first half of 2012 related to the takeover or hijacking of a customer’s account. This means that frauds relating to the misuse of identity details now account for an astonishing 65% of all fraud.

CIFAS communications manager Richard Hurley commented: “CIFAS has long highlighted that data is the cornerstone of the fraudster’s trade, but with nearly two thirds of all recorded fraud now relating to the abuse of identity details, the message is clearer than ever before. Organisations and individuals must develop new ways of safeguarding their personal data, account log in details and more. Otherwise, easily compromised data effectively provides the fraudster with a licence to steal money.”

Account misuse: the recurring threat

The misuse of accounts for fraudulent purposes is nothing new, but the level of this type of fraud remains worrying. While the first half of 2012 saw a decrease from the last half of 2011, the fraudulent use of an account still constitutes one-in-five of all frauds.

Hurley noted: “Circumstances can understandably lead people to consider desperate actions, from evading payment on an account through to using an account for a fraudulent purpose (including paying in cheques and making payments for third parties). People must remember, however, that fraud can have some profoundly devastating consequences – from criminal charges or convictions to withdrawal of existing services and refusal of new applications.”

Bank accounts and plastic cards still a fraudster’s favoured target

Industry initiatives such as improved security for online transactions and Chip and PIN have undoubtedly prevented much fraud. In spite of this, however, both bank account and plastic card (eg credit and store cards) fraud remain the most popular targets for fraudsters.

While bank account fraud has decreased during the first six months of 2012, fraud against plastic card accounts rose by 15% in the first six months of 2012 (compared with the last six months of 2011).

The CIFAS report shows that 94% of all plastic card frauds targeted credit cards, with a vast proportion of this increase driven by identity fraud – in turn demonstrating that fraudsters will always favour the products that give them access to funds that can be easily used.

Fraud landscape is volatile

In conclusion, Richard Hurley stated: “What Fraudscape Bulletin 2012 demonstrates is that the fraud landscape may be volatile, but that the overall pattern is a sobering warning to organisations and individuals. Identity details and personal data are now driving the vast majority of fraudulent activity, and this signals the need to change processes, protection and attitudes fundamentally.”

He added: “Regardless of the product targeted, or the motivation of the fraudster, in a data-dependent society the innocent consumer and individual is vulnerable to those looking to steal and abuse the data that we all rely upon. Organisations and individuals absolutely must find a way of fighting back.”