The global information services company said 34 in every 10,000 applications were uncovered as fraudulent during Q1, the second busiest period for mortgage fraud ever recorded by Experian’s Fraud Index.
This rate was eclipsed only by Q2 2010, when the rate reached 35 in every 10,000 applications.
The report also revealed a sharp increase in fraudulent attempts to open current accounts in the UK during the first three months of 2011.
Some 35 in every 10,000 current account applications were detected as being fraudulent during the first quarter of 2011.
This was 58% higher than in Q4 2010 and saw current account application fraud overtake mortgage and automotive finance fraud rates to become the most targeted financial product for the first time.
Experian said 20 in every 10,000 applications for financial products were found to be fraudulent during Q1 2011, an increase of 24% on the previous quarter (Q4 2010). This was lower than the 27 frauds found in every 10,000 applications found during Q1 2010.
It added that 12 in every 10,000 insurance applications and claims were found to be fraudulent during Q1 2011. This represents an increase of almost 4% from Q4 2010 and 43% from Q1 2010.
Experian’s Fraud Index is based on data derived from National Hunter and Insurance Hunter operated by Experian on behalf of its members.
These systems enable financial institutions to cross-match applications against over 100 million previous application records in order to spot commonalities and anomalies that are potentially indicative of fraud for further investigation.
Nick Mothershaw, director of fraud and identity solutions at Experian, said: “As increasingly sophisticated identity verification and fraud prevention technologies have made life more difficult for fraudsters, some have turned their attentions to current accounts, believing them to be a softer target to then launch attacks on more lucrative credit card and mortgage products.
“With signs that account takeover fraud is also increasing, fraudsters are becoming even more calculating.
“It is vital that financial service providers accurately validate and verify the identities of the people they interact with and are using every technique at their disposal to restrict the significant damage fraud does to the bottom line.”
