CIFAS' 270 Members have seen a 159% increase in facility takeover fraud (where a fraudster gains access to an innocent victim's account) in the year to date, compared with the same period in 2007.
Frauds of this kind are enabled through channels such as email (‘phishing') and telephone scams, or by the interception of credit cards and statements (for example) in order to take over an account, divert or fraudulently order goods.
CIFAS Members have also noted another simultaneous change in the fraud landscape, with a significant rise in misuse of facility cases. Misuse of facility is where the fraudster obtains an account, policy or other facility with the deliberate intent of using it for a fraudulent purpose. 2007 saw 23,400 misuse of facility cases filed by CIFAS Members, while 2008 (to the end of August) has already seen 26,055 cases. If this rise continues, by the end of the year this would mean an increase of 67%.
Bank account products are the most commonly misused (approximately 61%) with plastic cards, communications and mail order accounts also proving to be popular with fraudsters.
According to Peter Hurst, Chief Executive of CIFA, there may be various reasons for these increases. On the positive side, fraud investigators are now able to detect these types of fraud more successfully. But there is also evidence that fraudsters are increasingly turning to facility takeover fraud as a means of bypassing stricter lending criteria and verification processes at application - thus resulting in an account being hijacked and fraudulently used, without the actual fraudster being identified.
He comments: "As people feel the pinch in the economic downturn, many take more desperate measures to make ends meet. Whatever the root causes of this rise, fraud never goes out of fashion. The fight against fraud has to respond to the fraudsters' latest initiatives as well as remaining as attentive to older, more traditional, methods of committing fraud."
