Fraud at record level: the risks

There was a massive surge in the level of fraud in the UK in 2011. There were over 236,500 frauds identified during 2011 by CIFAS Members, the highest number of frauds ever recorded. It constitutes a 9% rise in the number of frauds compared to the previous year.

So what's going on, and what are the risks?

Desperation

CIFAS Communications Manager, Richard Hurley, says there's every chance that people are being pushed the wrong side of the law through desperation. He says: "Many of these frauds will undoubtedly be committed by organised criminal elements, but many will also be committed by people who seemingly feel that their circumstances leave them no choice."

He also warns that this same desperation is leaving more people vulnerable to attack. He explains: "Equally, financial desperation leaves many susceptible to potential scammers."

The major risks

The biggest and most serious threat is ID fraud - this can either be identity theft of an innocent victim, or the inventing of a new identity by a criminal group. Nearly half of all frauds identified during 2011 relate to the impersonation of an innocent victim or the use of completely false identities.

It goes to show how vital it is to keep our personal details safe: whether that's ensuring they are stored safely at home, disposed of carefully, sent through the post with all due safeguards, or simply that we are not careless about what we reveal online.

Account takeover

Meanwhile, one of the fastest growing types of fraud is account takeover. Here the fraudster gains access to another person's account details and takes over the account. This can be done in a wide variety of ways: from computer hacking to interception of your post. This type of fraud increased by 18% during 2011.

Again protecting yourself is a matter of keeping your details safe from interception, and never handing them over to anyone who approaches you: online, by phone or in person. Hurley adds that it's essential we keep online information safe, regularly changing passwords and PINs. He says: "It is obvious that fraud relating to personal data is an immense criminal trade so, fundamentally, it's time for every one of us to start treating data in the same way that we would guard a prized possession; as something to be secured and protected without complacency."

Money mules

One of the most disconcerting fraud types, however, remains misuse of facility fraud: where a legitimately obtained account is used fraudulently (such as to receive stolen funds, or evade payment of monies owed).

CIFAS has previously highlighted that a substantial proportion of such frauds bear the hallmarks of 'money mule' activity (where a fraudster recruits another - often innocent - party to use his or her account to launder money on the fraudster's behalf), demonstrating that organised criminals now have a three pronged attack on their victims' identities: either impersonating them, hijacking their accounts or tricking them into using their own details as a shield for criminal activity. Equally true, however, is that financial insecurity and the economic pinch will have been motivating factors for many of these frauds.

Hurley says: "Individuals must remember that fraud can have some profoundly devastating consequences: from criminal charges or convictions, to withdrawal of services and being unable to get new products or services. Circumstances, understandably, can lead people to consider a variety of actions, but when it comes to fraud, the advice is simple: fraud is a crime, and do you really want to become a criminal?"