Credit card application fraud climbed to its highest ever recorded level in 2022, according to new analysis by Experian.

According to the credit reference firm, credit card application fraud rose by 18% in the fourth quarter of 2022, as fraudsters looked to take advantage of people’s Personally Identifiable Information (PII) to take out borrowing in their name.

The rise means the overall fraud rate for 2022 was the highest yearly rate recorded by Experian in the last 10 years.

When looking at loans, Experian’s figures indicate that fraud in this space has more than doubled over the last two years, with the fraud rate in Q4 among the highest seen in the last three years.

First party fraud, which involves 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% of all applications.

Experian said its figures, which are based on data from the National Hunter Fraud Prevention Service, suggested that households were looking to obtain additional borrowing over the Christmas period in order to cover costs.

Managing director of identity and fraud at Experian, Eduardo Castro, commented: “Our latest figures show the scale of the fraud epidemic facing consumers and financial services companies.

“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.”

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