Credit card fraud jumps to five-year high in Britain

Credit card fraud jumps to a five-year high: How can Britons protect themselves from identity theft and what you should do if you fall victim?

  • Huge 42% increase in credit card fraud in last three months of 2021
  • Majority of cases involve fraudster using victims’ address to apply for credit
  • Oversharing on social media can lead to personal info being used for fraud
  • Experian says cold-calling, text scams and crypto fraud will rise in 2022 

Credit card application fraud hit a five-year high in the last three months of 2021, analysis by Experian has revealed. 

The fraud rate for credit cards rose by 42 per cent between October and December 2021, when compared to the previous three months, according to data from the National Fraud Hunter Prevention Service – the highest rate since 2017. 

Although it isn’t unusual for a rise in fraud over the festive period, the data suggests that last year proved to be a particularly busy period for fraudsters.

Experian warns oversharing on social media can lead to personal details being used to commit fraud.

To open a fraudulent credit card, scammers need someone’s personal information, much of which is often readily available online, such as name, address and date of birth.

Almost three-quarters of cases detected involved the fraudster using the victims’ current address to apply for credit.

This highlights the importance of people doing what they can to keep their personal information secure, especially when using online apps and social media.

Existing and emerging fraud trends are likely to continue to grow in 2022, according to Experian.

It predicts established cold-calling and text scams, as well as new cryptocurrency schemes will become of increasing concern throughout the year.

Eduardo Castro, managing director of identity and fraud UK&I at Experian said: ‘Genuine applications for credit tend to rise as we enter the busy Christmas shopping period, but the extent to which fraudsters tried to take advantage this year is truly eye-opening.

‘These figures should serve as a warning as to how important it is that people look after their personal information.

‘We need to be more vigilant online. For example, oversharing personal details on social media platforms is easily done, but the consequences can be dire, with nearly three-quarters of the cases we found using the victim’s current address.’

However, the rise in recorded cases may also be partly due to financial services’ fraud teams using a sophisticated combination of newer technologies to automatically identify fraud.

This has allowed credit card providers to automate more of the application process and decline questionable applications more effectively, rather than flagging it for a review.

New forms of authentication are also becoming common practice.

One time passcodes sent to a person’s mobile phone have become typical, while biometrics systems – both physical and behavioural – becoming more familiar and accepted by credit card users.

How to protect yourself from identity fraud?

Identity fraud is a terrifying prospect. Not only does it come with a sense of personal violation, it is likely to come at financial cost.

Checking your credit report every now and again is a great way to spot anything untoward taking place, like a fraudulent credit card application.

Experian and Equifax offer 30-day free trials of their service online, but you will need to remember to cancel before the end of the promotion to avoid subscription fees.

For those wishing to avoid being charged monthly, free credit report options can be found by visiting Credit Karma and Clearscore.

Your social media channels are the next things to do a provisional sensor check on.

For example, ensure your privacy settings are updated and your personal information is not visible to everyone.

Also, avoid sharing too much personal information on social media, such as your mother’s maiden name, home address or when you’re away.

When you move address, always re-register on the electoral roll as soon as you can as this helps ensure your details are no longer registered at your previous address.

Although remembering multiple passwords might seem like a chore, having a unique password for each online account you have will mean fraudsters are less likely to gain access to multiple accounts in one go.

Finally, if you receive emails or text messages, always be cautious about attachments, links or telephone numbers. If in doubt, visit the company website and contact them directly. 

What to do if you’re a victim of ID fraud? 

  • Check your free statutory credit report, with all three credit reference agencies. You can then review all information that does not belong to you.
  • Contact any relevant lenders to inform them of the fraudulent information
  • Ask a credit reference agency to dispute the fraudulent information with all relevant companies and lenders. A notice of dispute will also be added to the fraudulent information.
  • Add a password to your credit report. This is called a Password Notice of Correction and should be unique and only known to you.
  • Add self-registration details 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 centre for fraud and cyber crime.