Current account fraud is rising - how can your business spot fraudsters?

Fraudulent current account applications are on the rise. New statistics from Experian shows that criminals were behind 159 in every 10,000 current account applications in 2017, up from 138 in 2016 – helping contribute to the rate of all frauds which increased from 0.56% to 0.6%. This rise highlights a worrying trend of fraudsters heading back down a tried and tested route.

 Criminals are focussing on tenants that are particularly vulnerable because their post is often left in communal areas or in mailboxes which can be easily accessed from the street. Even locked mailboxes aren’t necessarily secure if a fraudster can fish post out or find a copy of the key. But, which renters are most at risk? Our research identifies a ‘tale of two tenants.’

‘Transient Renters’ are increasingly in the fraudsters’ crosshairs. This group is mainly 18-25 year olds who share private low-cost housing and move regularly. They make up the largest increase in third party fraud of any group over the last two years, up 2.7% with current account fraud rising by 4.82%. The largest number of victims live in Peterborough, Darlington, Grimsby, Luton and Hull.

The second group of tenants, ‘Rental Hubs’, saw a decrease in fraud of 4.85% but remain heavily targeted by criminals. These renters are typically single, in their 20s and 30s and rent privately in cities and towns predominantly early on in their careers or studying. Peterborough, Grimsby, Luton and Hull are also hot spots for frauds against these renters, but there is also a cluster in East Anglian towns and cities such as Ipswich, Cambridge and Norwich.

The research also found that the elderly are becoming less of a target with a decline of 5.42% from 2014 to 2017 in third party fraud against those aged 60 and above. In contrast, 20-24 year olds and 25-29 year olds have seen a 2.16% and 2.5% increase in third party fraud with the 25-29 and 30-24 age groups the most targeted by this tactic.

Unfortunately, men remain more likely to become a victim of fraud, a consistent theme since 2014. They are most likely to be a victim of current account fraud at 70% vs women’s 30% and automotive fraud hits men rather than women by 79%. Third party insurance fraud heavily targets men too with 93% of all cases being male.

Below are top tips for helping those most at risk of becoming a victim of fraud.

What advice can you give to your customers to limit their chances of being a victim of fraud?

1. 1.       Instruct them to always shred or destroy documents that contain personal information before throwing them away.  
2. 2.       Make sure they never respond to cold calls or e-mails asking for account details, PINs, passwords or personal information.
3. 3.       Instruct them to never give too much away on networking websites. For example, pets’ names or childrens’ names could be used as passwords.
4. 4.       Ensure they register to vote at their current address. If they don’t, thieves could use their previous address details to open new credit accounts and run up debts in their name.
5. 5.       Make sure they check their post regularly so they know when to expect important documents — and when to act if they don’t arrive.
6. 6.       Make sure they redirect their mail via the Post Office if they move to a new house.
7. 7.       Ensure they use secure, unique passwords for as many online accounts as possible, and ideally all of them. At the very least have a unique password for each type of service provider such as financial services, retail services and email.
8. 8.       Advise them not to store account names and passwords on smartphones, either in email or as a note, or to ‘autocomplete’ when opening a website or app.  It will be a goldmine for fraudsters if their device is lost or stolen.
9. 9.       Tell them to read all bank and card statements regularly to check for suspicious transactions.
10. 10.   Help them with checking their credit report, because it lists their credit accounts and what you owe, so you can spot applications and spending that are nothing to do with them.