There’s a whole range of financial products just waiting for fraudsters to try their luck.
But it’s the normal current account that remains the most targeted one – with fraud rates surging last year.
New figures from Experian reveal that fraud rates more than doubled in 2015, rocketing from 73 in every 10,000 applications in January to 156 in December.
According to Experian, current accounts are still the most targeted financial product when it comes to fraud – not only presenting the immediate threat of emptying a person’s overdraft facilities, but also often acting as a ‘gateway’ to further fraudulent activity.
This happens when fraudsters use information they get from a successful attempt to open other financial products such as loans or credit cards.
The surge in current account fraud has also contributed to pushing up the amount of fraud attributed to identity fraud compared to first party fraud.
First party fraud involves an individual who makes a promise of future repayment in exchange for goods or services without the intent to repay.
Identity or ‘third party’ fraud is when criminals get hold of their victims’ personal information and then borrow money or run up debts in their names.
At the start of 2015, 51% of detected and prevented fraudulent applications across all financial products were attributed to first party fraud whilst 49% were a result of identity fraud.
By the end of the year this balance tipped significantly, with 59% of fraud now accountable to identity thieves.
According to the information, based on 2015 Experian fraud data, while fraud across most other financial products has remained at a consistent rate in the last year, credit card and insurance policy fraud also saw a substantial increase.
The credit card fraud rate stood at 36 in every 10,000 applications in January 2015 but increased over the course of the year to 55 in every 10,000 applications.
Similarly, insurance policy fraud stood at 37 in every 10,000 applications at the beginning of the year but increased to 68.
According to Experian, as with current account fraud, credit card fraud was also largely driven by identity theft.
Nick Mothershaw, from the data company, said: “Current account fraud really came to the fore in 2015, with identity thieves acting as the chief culprits.
“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 advises several steps to help people avoid being victims of identity fraud.
They include always shredding or destroying documents that contain personal information, never responding to cold calls or emails asking for information, avoiding giving too much away on social media, always using secure, unique passwords, and not storing account names and passwords on your smartphone.
Other steps include registering to vote at your current address, monitoring your post regularly so you know when to expect important documents, redirecting mail via the Post Office, checking all bank and card statements regularly, and checking your credit report.
Experian said it works closely with fraud prevention system National Hunter, which allows financial institutions to cross-match applications against more than 100m previous application records to spot signs of potential fraud.