Identity fraud cases reach all-time high as cost-of-living crisis bites deep

That alarming statistic is revealed in the latest edition of Fraudscape, which identifies and analyses the latest fraud trends based on 409,000 cases of fraudulent conduct recorded to the National Fraud Database in 2022.

The report reveals that last year witnessed the highest volume of cases of fraudulent conduct ever recorded to the National Fraud Database. Cases involving identity fraud soared by 23% and now account for circa 68% of all cases filed by Cifas members.

Although the banking sector continued to be heavily targeted, in 2022 there was a significant increase witnessed in cases of identity fraud attempted against the plastic cards and telecoms sectors.   

Over the last couple of years, the demand for credit card use has grown as a result of households becoming increasingly reliant on credit as the cost-of-living crisis deepens. In turn, this has made individuals more susceptible to approaches by criminals who offer fake deals for products and services in order to steal personal and financial information.  

For its part, the telecoms sector has been the target of a surge in attacks by fraudsters, with a noted increase in ‘fake phone dealer’ fraud whereby victims are duped into revealing their personal information after being offered upgrades or discounted offers on contracts.

Most victims of identity fraud are over 31 years of age, while the data shows that there has been a significant rise in victims aged 61-plus as criminals turn their attentions towards targeting older consumers.

False application

The squeeze on living standards has resulted in a sharp increase in cases of false application. This refers to where a product or service is applied for using fake supporting information in order to make the individual appear credit worthy or when an applicant hides previous adverse information.

This type of fraudulent conduct rose by 40% in 2022 when compared to the previous 12 months as individuals altered bank statements or other official documents to inflate their income in a bid to secure mortgages, loan products or goods.

Loan companies and plastic card issuers saw the biggest increases in cases of misuse of facility, which was the second highest recorded case type in 2022.

However, a large proportion of these cases continue to relate to bank accounts, with nearly 40,000 cases indicating money mule behaviour – where an individual allows someone else to use their bank account to transfer money, often keeping some of it for themselves.

The key age range for mule activity continues to involve those aged from 21 to 25, with social media remaining a key enabler in the recruitment of mules.

As the economic crisis deepens, loan products were also prone to first party fraud, with a 114% increase noted in cases of misuse of a facility in 2022.

Significant surge  

Mike Haley, CEO at Cifas, explained: “The cost-of-living crisis has fuelled a significant surge in fraud, with cases filed to the National Fraud Database now at an all-time high. Criminals and career fraudsters have honed their techniques to steal and exploit personal information in order to obtain phones, loans and retail accounts in our names, subsequently leading to the biggest growth in identity fraud in a decade.”

Haley continued: “In addition, we’ve seen a rise in individuals committing fraud to obtain loans and credit cards by using false documents or otherwise hiding adverse credit histories.”

In conclusion, Haley observed: “Criminals are ruthlessly targeting everyone with fraudulent communications by phone, e-mail or SMS text message in order to steal their personal details and account passwords, PIN numbers or other credentials. The current surge in fraud means it’s crucial that individuals and businesses take extra care to protect their personal information and never divulge financial details or credentials that can be used to commit fraud.”