February 24, 2021: Credit card application fraud hit a five-year high in the last three months of 2021, a new insight from Experian reveals.
The latest data from the National Fraud Hunter Prevention Service, analyzed by Experian, revealed that the rate of detected fraud for cards increased by 42% between October and December 2021, compared to the previous quarter, the highest rate since 2017.
Typically, an increase in fraudulent activity is detected during the holiday shopping season, but 2021 has proven particularly busy for organized fraudsters looking to take advantage of an increase in genuine inquiries to access credit using stolen or illegally obtained personal data.
Nearly three-quarters of cases detected involved the fraudster using the victims’ current address to apply for credit, underscoring the importance of people doing what they can to protect their personal information, especially when using of online applications and social media.
Existing and emerging fraud trends are expected to continue to grow in 2022. Experian predicts established cold calling and SMS scams, and nascent cryptocurrency schemes will become of increasing concern throughout the year.
Eduardo Castro, Managing Director, Identity and Fraud, Experian UK&I, said: “Genuine credit inquiries tend to increase as we enter the busy Christmas shopping season, but the extent to which scammers have tried to take advantage of them this year is truly telling.
“These numbers should serve as a warning about the importance of people taking care of their personal information. We need to be more vigilant online. For example, oversharing of personal data on social media platforms is easy, but the consequences can be dire, with almost three quarters of the cases we found using the victim’s current address.
“In the meantime, businesses need robust fraud prevention systems to protect customers, and technology helps in the battle. Identifying fraudulent activity at the point of enforcement frees up time and resources for anti-fraud teams investigate more complex cases.”
The rise in rates can also be partly attributed to financial services fraud teams using a sophisticated combination of technologies, such as Machine Learning-powered Fraud Probability Scores to successfully identify and prevent fraud, without affecting the experience of real customers.
This allowed lenders to further automate the application process and deny questionable applications quickly and efficiently, rather than flag them for manual review.
New forms of authentication are also becoming common. Personal identification numbers sent to a person’s mobile phone have become commonplace, while biometric systems – both physical and behavioral – are becoming more familiar and accepted by consumers as well.
How to protect yourself against identity theft
Don’t share too much personal information on social media, such as mother’s maiden name, home address, or when you’re away. It’s important to make sure your privacy settings are up to date on all platforms.
When you change your address, always re-register on the electoral lists as soon as possible. This ensures that your details are no longer stored at your old address. It’s a good idea to set up mail forwarding for a while too.
Make sure you have a unique password for each online account you have. This means fraudsters are less likely to have access to multiple accounts.
Make sure your home Wi-Fi network has a strong password, never log into password-protected accounts on unsecured public Wi-Fi, and make sure you have a up-to-date anti-virus software
If you receive emails or text messages, always pay attention to attachments, links or phone numbers. If in doubt, visit the company’s website and contact them directly.
Check your credit report, free of charge, at least once a year to look for anything suspicious. This will show any credit inquiries or new accounts. You can also monitor your free Experian credit score to look for any significant changes.
What to do if you are a victim of identity theft
Check your free statutory credit report with all three credit reference agencies. You can then consult all the information that does not belong to you.
Contact the affected lenders to inform them of the fraudulent information
Have Experian or a credit reference agency dispute the fraudulent information with all relevant companies and lenders. A counter notice will also be added to the fraudulent information.
Add a password to your credit file. this is called a password correction notice and should be unique and known only to you.
Add details for self-registration with Cifas, the UK’s fraud prevention service. A credit reference agency can sometimes do this for you.
Contact Action Fraud, the UK’s national reporting center for fraud and cybercrime.
Robert Goodman, PR Manager, Business and Business, UK&I, Experian
Tel: +44 7989 398 498 / Email: [email protected]
Experian is the world leader in information services. During life’s big moments – from buying a house or car, to sending a kid to college, to growing a business by connecting with new customers – we enable consumers and our customers to manage their data with confidence. We help individuals gain financial control and access financial services, businesses make smarter decisions and thrive, lenders lend more responsibly, and organizations prevent identity theft and crime. .
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