Incidents of fraud rose by 10 per cent in the first quarter of 2008 compared with last year, according to figures from CIFAS, the UK's fraud prevention service.
The number of fraud cases filed with CIFAS rose to 52,285 by the end of the first quarter, as credit conditions have tightened and gaining access to credit has become increasingly challenging, driving people to turn to fraud as a means of borrowing.
CIFAS reported an 'alarming' rise of 146 per cent in the number of facility takeover cases compared with the same period last year. This is a form of identity fraud
whereby a fraudster impersonates the victim in order to 'take over' and control one of their existing current accounts
Telling lies on application forms in an attempt to commit fraud, when the applicant provides false information about themselves in order to be granted credit, has also seen a 13 per cent increase on last year's figures, increasing to 21,780 cases.
The report revealed that the most common lie in such cases is failure to disclose a previous address where the applicant's credit history has been impaired, to avoid that credit history becoming known to the potential lender and affecting its decision of whether or not to afford the applicant credit.
"Those who think that lying on application forms will give them any advantage need to realise that their efforts are counter-productive." said Peter Hurst, chief executive at CIFAS. "Fraud data sharing means that such lies are easy to detect and, far from enhancing an applicant's chances, will be detrimental to their application. Telling the truth, even if it is slightly less palatable, remains the best policy."
It is not all bad news, however, as the decreasing trend of identity fraud has continued, with CIFAS reporting a 19 per cent drop in numbers compared with 2007's first quarter.
Mr Hurst said that the figures reflect how "in a time of economic change and uncertainty, patterns in fraudulent activity also change", and that "the increase in application fraud (often to hide adverse credit history) demonstrates that because people are getting into debt earlier, and because the ‘credit crunch’ has diminished their access to finance, they are now resorting to fraudulent applications for funds."
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