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BizReport : Law & Regulation : April 26, 2012

CIFAS reveals rise in fraudulent use of bank accounts by owner

The UK's fraud prevention service, CIFAS, has revealed that fraud increased 13% in the first quarter of 2012. However, it's not just criminal activity, says CIFAS, but desperation on the part of some struggling account holders.

by Helen Leggatt

cifas_logo.gifInstances of fraud in the UK during the first quarter of this year rose 30% year on year, found CIFAS, and 13% from the previous quarter. Identity fraud was up 40% and account takeovers 86%.

However, a worrying trend of deception and fraud by genuine account holders has been revealed. Law-abiding citizens, dogged by financial woes, are contributing to this rise in fraud.

CIFAS found that the misuse of accounts by the account owner grew 13%, making it the second most-common kind of fraud. Account holders may be using their accounts to receive stolen funds or falsely claim not to have received purchased goods, credit cards or money. In some cases criminal organizations target desperate bank account holders and coerce them in to being "money mules".

According to CIFAS, "these frauds are as likely to be the result of financial pressures on otherwise honest people as they are to be attributable to those who unwittingly or knowingly allow their accounts to be used for criminal purposes, to receive and send illegal payments."

The CIFAS report, "Fraudscape", can be viewed online. (.pdf)

Tags: banking, fraud, identity theft, UK

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