Card fraud soared by 18 per cent in fourth quarter of 2022
Credit card application fraud rose to its highest-ever recorded level in 2022, according to analysis by Experian.
The consumer credit reporting company found that credit card application fraud rose by 18 per cent in the final quarter of 2022, with fraudsters taking advantage of people’s personally identifiable information and borrowing in their name.
The analysis was based on data from the National Hunter Fraud Prevention Service and compared the fourth quarter of 2022 with the third.
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The rise means the overall the fraud rate for 2022 was the highest yearly rate recorded by Experian in the last 10 years, indicating the scale of the problem for both consumers and financial services firms looking to prevent fraudulent activity.
Fraud in the loans space has more than doubled over the last two years, with the fraud rate in the fourth quarter among the highest seen in the last three years.
First-party fraud – where an individual gives false information or misrepresents their identity to access a product on more favourable terms, with no intention of paying it back – now accounts for 27 per cent of all applications.
Experian said the figures suggest that households were looking to obtain additional borrowing over the Christmas period to cover costs.
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“Our latest figures show the scale of the fraud epidemic facing consumers and financial services companies”, said Eduardo Castro, managing director of identity and fraud at Experian UK&I.
“The rise in first party fraud is also striking, as it suggests that households are misrepresenting their financial situation to meet additional costs, or even cover everyday expenditure.
“It’s an ongoing, evolving battle, with fraudsters always looking at new ways to dupe victims. However, lenders are deploying new technology to help them identify potentially fraudulent activity as early as possible, preventing it, and minimising losses to both them and their customers.”
Experian prevented more than £1.8bn of fraudulent transactions in 2021.
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