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Current-account fraud shows signs of massive growth

There has been a surge in the number of fraudulent attempts to open current accounts, with bank accounts now the most popular target for con artists.

The past 12 months have seen the number of fraudulent applications more than double, from 73 in every 100,000 applications to 156 – and it means that more than half of all financial fraud is now third-party (or identity) fraud rather than first-party fraud.

At the start of 2015, just over half of detected fraudulent attempts to apply for financial products were carried out by people using their own, real identities – lying about their individual circumstances, for example. But by the end of the year, nearly 60% of detected fraud attempts were being carried out by criminals attempting ID theft.

Successful current-account fraud not only allows a criminal to take out an overdraft in someone else’s name and then drain that account, but can also enable the fraudster to open further accounts, apply for credit cards or take out loans.

“Current-account fraud really came to the fore in 2015, with identity thieves acting as the chief culprits,” said Nick Mothershaw, of credit-reference agency Experian.

“The positive side to this is that these numbers represent detected and prevented fraud attempts, demonstrating the robustness of the protection systems in place for financial products.

“While it is clear that the systems are working, both companies and consumers need to remain vigilant to the evolving tactics of fraudsters which become more sophisticated with each passing day.”

Experian’s figures showed that credit-card and insurance-policy fraud rose significantly during 2015, too.

Mr Mothershaw offered some basic tips to help prevent you becoming a victim of ID fraud:

  • Always destroy documents that contain personal information rather than simply chucking them in the bin.
  • Don’t respond to cold calls or e-mails asking for account details or other personal information.
  • Make sure you’re listed on the electoral roll at your current address, not a former address.
  • Report any expected documents or statements that fail to arrive, and check all your statements carefully.
  • Don’t store account names and passwords on your phone, as it will prove to be a goldmine for fraudsters if your device is lost or stolen.