Credit card companies last year had to deal with more fraudulent applications than ever before as people tried to get hold of more money to cope with the soaring cost of living.
In particular, banks had reported a jump in “first-party fraud”, Experian said. The number of people lying in their applications to try to borrow more than they could afford or intended to pay back had more than doubled over the past two years, the credit-checking group said. That accounted for a quarter of fraudulent applications and Eduardo Castro, of Experian, said: “It suggests that households are misrepresenting their financial situation to meet additional costs, or even to cover everyday expenditure.”
Fraudsters trying to open accounts using other people’s names and details remained the most common form of credit card fraud, Experian said.
The number of fraudulent credit card applications rose by 18 per cent in the final three months of last year compared with the previous quarter.
Of the applications that credit card companies received in 2022, 0.65 per cent were deemed fraudulent, Experian’s data showed, the highest percentage for a decade.
“Our latest figures show the scale of the fraud epidemic facing consumers and financial services companies,” Castro said. “It’s an evolving battle, with fraudsters always looking at new ways to dupe victims. Lenders are deploying new technology to help to identify potentially fraudulent activity as early as possible, preventing it and minimising losses to them and their customers.”
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Cost of living blamed for jump in credit card fraud