Fraud threats change but the damage remains

Research carried out by CIFAS - the UK's Fraud Prevention Service, among its 260 Member organisations, reveals that two of the largest fraud threats facing businesses during the recession are facility takeover and online fraud.

Facility takeover

Facility takeover fraud (also known as account takeover fraud) has seen the sharpest rise. A staggering 207% increase in these frauds was recorded by CIFAS Members in 2008 compared with 2007, with plastic cards, bank accounts, mail order and telecoms being particularly vulnerable. Fraudsters obtain account information in many ways, with ‘phishing' being one that has largely entered the public consciousness. The rise of ‘smishing', however, where an attack comes via SMS text message (banks and other financial services providers increasingly contact customers this way) means that there is a new threat that is not so well-known. Potentially, this represents a very profitable line of attack for fraudsters.

Online fraud

CIFAS Members also view online fraud as one of the highest priority threats during the current climate. Figures from APACS show that card not present fraud (which admittedly includes phone and mail order frauds as well as internet transactions) amounted to £328.4m in 2008, a 13% increase from 2007. This type of fraud relies upon compromised card details, and is popular with fraudsters because it is perpetrated remotely, from what the fraudster perceives as a ‘safe distance' - while still offering substantial gains. Headlines have also been made of the fact that it is very cheap and easy for organised criminals to access compromised card details online - for as little as 50p a card.

Other fraud threats

Other particular threats identified by CIFAS Members include staff fraud and identity fraud which are both on the increase and remain as dangerous and threatening as ever - causing damage to businesses and customers in equal measure.

Richard Hurley, CIFAS Communications Manager, concludes: "While the rest of us are reining in our behaviour as a result of the recession, the increase in facility takeover and online frauds demonstrates clearly that fraudsters are simply redirecting their efforts. A renewed and collaborative focus on anti-fraud procedures is therefore becoming even more essential."