There has been a significant rise in detected and prevented fraud attempts in the second half of 2013, as financial services providers push forward in the fight against credit application fraud.
According to Experian’s latest Fraud Index, the overall level of detected and prevented fraud attempts rose by 18% in 2013 across all credit products.
In 2013, an average of 21 in every 10,000 applications for loans, credit cards, mortgages, savings accounts, current accounts and insurance were detected as fraudulent compared with an average of 18 in 10,000 fraudulent attempts in 2012.
The level of detected and prevented fraudulent applications for credit cards reached peak levels in the final quarter of 2013 (October – December 2013), the highest level recorded in the last three years. During 2013, 25 in every 10,000 applications were found to be fraudulent compared to 15 in every 10,000 applications for the previous year.
In the insurance market, the number of insurance applications found to be fraudulent reached its highest recorded level in 2013, with 17 cases detected in every 10,000 applications in 2013, compared with 12 in every 10,000 in 2012, a rise of around 40% on the previous year.
Third party fraud (identity theft) accounts for over a third (37%) of all fraud cases uncovered in the last six months of 2013, up 2% on the previous period in 2012.
The Index also suggested that the industry is continuing to make headway in tackling first party fraud, with nearly two-thirds of detected fraud cases (63%) accounting for first party fraud, similar to the same period the previous year (65%), as the industry invests in better fraud prevention systems.
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