Financial fraud: Belfast Telegraph

THIS year will go down as one of severe recession: it is also turning into one of the worst ever for fraud. The two things are closely connected.



As the recession bites harder, more people teeter over the edge into dishonesty. And organised crime gangs have become more determined to steal from honest people their credit card details, gain access to their bank accounts, or find that that criminals have taken over control of their accounts.

Fraud can hit anyone — even those whose profession is financial management. One of the UK’s larger financial institutions, the Chelsea Building Society, has just admitted it has lost £41m through a sophisticated mortgage fraud.

Nor is it right to assume that fraudsters mostly operate in poorer districts.

According to a summary of statistics produced for the Belfast Telegraph by the 3rd Man fraud analysts, the hot spots in Northern Ireland are Antrim, which had the highest amount of fraudulent transactions, and Hillsborough, with the largest proportion of frauds amongst total transactions.

It is dangerous to judge by appearances.

“Fraud is very much on the increase,” says James Jones, consumer education manager at credit reference agency Experian. “And it has been for a number of years. But during the downturn we are seeing a significant escalation.”

According to CIFAS, the UK’s fraud prevention service, there has been a 74% jump in identity theft to conduct fraud and a 43% rise in the number of people who have been impersonated by others to gain access to their accounts.

Peter Hurst, chief executive of CIFAS, says: “The recession has an impact throughout society. The rise in the numbers of victims, and these very specific types of fraud, demonstrate that fraudsters have no regard for economic, social and personal fragility.”

Shortening odds

The odds for being hit by fraud have shortened significantly. This year, more than one in 200 people will be a victim of financial fraud. Given that many of these people lose thousands of pounds a time and that it can take months, or even years, to sort out the mess, then it makes sense to protect yourself as best as possible.

Some frauds are more difficult to guard against than others.

One person who contacted us has just returned from Turkey, where her debit card was retained by what appeared to be a legitimate cash machine.

But she lost nearly a thousand pounds — which the bank initially refused to refund — because a fraudster used her card to make large withdrawals from her account.

The cash machine may have had a sophisticated ‘cover’ which not only swallowed the card, but also recorded the PIN number.

Many others, say Experian, are having their bank account details stolen direct from their computers through so called ‘Trojan viruses’, which arrive via spam email and install themselves as unwanted software on the PC.

Having recorded your bank account numbers and passwords, your computer sends this information without your knowledge to a criminal who can access your bank account to remove funds.

Careful who you trust

Consumers can, and should, take some simple steps to protect ourselves from fraud — remembering that threats are not always obvious.

According to a new report from insurers LV=, one in six of us has given our debit or credit card and PIN number to another person, asking them to get money out of a cash machine, or to buy goods with them. In one in four cases, the person was then defrauded.

Criminal gangs are becoming more sophisticated — and many make large investments to generate their criminal returns.

One common fraud involves setting-up websites that look professional, but fail to deliver.

The Office of Fair Trading last week launched a campaign warning consumers about the use of ‘scam’ websites to sell concert and sports tickets — which never arrive.

Taking out a mortgage also opens up consumers to the risk of fraud.

The body representing legitimate finance brokers has just warned of the increasing number of rogue brokers who demand fees up-front to arrange mortgages — and then disappear without arranging the loans.

Tips to avoid fraud

  • Install and maintain virus protection software on your computer
  • Never share your PIN number or lend your banks cards to anyone
  • Notify your bank quickly when you move address
  • Monitor your accounts regularly to spot unauthorised transactions
  • Only transact with people and businesses you trust
  • Don’t assume a website is legitimate just because it looks professional

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