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The changing landscape of fraud

CIFAS, the UK’s fraud prevention service, has warned that there is no room for complacency despite the fact that overall fraud levels dropped by 16.5% between January and April when compared to the same period in 2012.

It points to an increase in the number of certain types of fraud recorded by CIFAS’ members, particularly those involving identity fraud.

Credit and store card fraud

One of the offences highlighted is fraud against credit and store card accounts, which increased by 28% over the period, when compared with the first four months of 2012. This type of fraud is now the most common type of fraud, accounting for 25% of all fraud recorded in 2013 between January and April.

Many frauds against plastic card accounts are the result of identity fraud, in which cards are obtained in the name of a third party, leaving that third party with the bill, and the goods in the hands of the perpetrator.

Loan fraud

There has also been a rise in the number of fraud attempts against payday lenders and loan providers, says CIFAS. These now account for almost 7% of all frauds – and increased by 43% between January and April, when compared to the same period last year.

According to CIFAS, the increase might be related to the recent rise in prominence of payday lenders. It reckons that new and emerging businesses are always more likely to be targeted by fraud, in the expectation that their defences might be weaker, and that payday lenders are a prime example of this. 

Identity fraud

“The vast majority of loan related fraud involves identity fraudsters targeting payday lenders in order to obtain money using someone else’s identity details,” said CIFAS Communications Manager, Richard Hurley.

“This proves that – in spite of overall patterns – there is a constant shift in the fraud landscape. These findings therefore demonstrate that the overall decline in fraud levels is no cause for complacency. Identity fraud is still far too prevalent and accounts for those increases that have been seen,” he added. “This is a warning that neither organisations nor consumers can ignore.”


An earlier CIFAS report, Fraudscape, published in March, highlighted the fact that 80% of all identity related crime is perpetrated online.

The fact that cybercrime is big business for the modern fraudster is borne out by recent figures from the Federation of Small Businesses (FSB), which show that cybercrime, including fraud, costs its members around £785 million per year. 

According to the FSB, 41% of its 200,000 members have been a victim of cybercrime in the last 12 months, putting the average cost at around £4,000 per business. Around three in ten have been a victim of fraud, typically by a customer or client (13%) or through ‘card not present’ fraud (10%). 

The most common threat to businesses is virus infections, which 20% of respondents said they have fallen victim to; eight percent have been a victim of hacking and five percent have suffered security breaches.

The business group has called on firms to do more to protect themselves.

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