Financial fraud increases by 33% during April

Financial fraud rates in the UK rose by 33% in April when compared with previous monthly averages, new analysis from Experian has revealed.

The credit ratings agency suggested that fraudsters had targeted a “myriad” of financial products during April, including current and savings accounts.

Data from Experian and the National Hunter Fraud Prevention Service indicated a rise in fraud rates after the UK had entered lockdown in March, with criminals looking to take advantage of the disruption to both businesses and their customers.

Experian said its figures were analysed by comparing the fraud rate in April 2020 against the previous average monthly fraud rate, from February 2019 to January 2020.

The largest increase during April was in car and other asset finance applications, which saw a rise of 181%, and this was followed by current accounts (35%) and then saving accounts (28%). Fraudulent credit card applications (17%) and unsecured loans (10%) also saw increases.

While the figures point to an increase in the proportion of fraudulent applications, Experian said it also signals that fraud teams have been able to successfully “identify and investigate” questionable account openings since the pandemic began, in part due to a decrease in total applications.

Experian managing director of identity and fraud, Micah Willbrand, commented: “The rise in fraud rates across each category is a warning that banks, building societies and other financial providers need to be as alert as ever in identifying fraudulent applications, even in the unique circumstances the country finds itself in.

“Its likely fraudsters have been looking to take advantage of the situation and submitting higher volumes of applications under the belief that the disruption would give them a better chance of success.

“But they have been largely disappointed. Fraud teams have had greater capacity to flag and investigate openings that otherwise may have gone unchecked, resulting in incidents of fraud being successfully identified.”

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