Fraudsters prey on low income families

London, UK, 28 April 2017: Families in Britain who are struggling financially are increasingly becoming prime targets of financial fraud, according to new research from Experian. This group, made up of more than 4 million* people in the UK, have experienced the highest growth rate in fraud between 2014 and 2016.

Of all the fraudulent credit applications made using an individual’s personal details, this low-income demographic, which often faces financial pressures, experienced an increase at double the rate of any other group. Recognising that these families are often dependent upon credit and loans, and likely to make several credit applications per year, criminals are using this intelligence to their advantage.  

“Analysis of Experian data from 2016 shows that fraudsters are unscrupulous in targeting young people and families who are already under financial pressure. When a person makes a credit application they are likely to receive information about the application, or a card and pin, in the post. Fraudsters are intercepting this post, to gain control of the credit facility.” explained Nick Mothershaw, Director of Fraud and Identity Solutions at Experian.

“Cyber criminals are making the lives of those struggling to make ends meet even tougher, that’s why we are encouraging people to take the time to think about the information they share with others.”

Representing 8% of the UK population, people in this vulnerable group are typically in their twenties and thirties, have very low incomes, or are unemployed or in low-skill and low-wage jobs. They usually rent their homes from a social housing landlord and have very limited savings, investments, pensions or retirement provisions.

Here’s how to avoid becoming a victim of fraud:

1. Always shred or destroy documents that contain personal information before throwing them away.
2. Never respond to cold phone calls or e-mails asking for account details, PINs, passwords or personal information.
3. Don’t give too much away on networking websites. For example, pets’ names or children’s names could be used as passwords.
4. Register to vote at your current address. If you don’t, thieves could use your previous address details to open new credit accounts, and run up debts in your name.
5. Monitor your post regularly so you know when to expect important documents — and when to act if they don’t arrive.
6. Redirect your mail via the Post Office / Royal Mail if you move house.
7. Always use secure, unique passwords for as many online accounts as possible, and ideally all of them. At the very least have a unique password for each type of service provider such as financial services, retail services and email.
8. Don’t store account names and passwords on your smartphone, either in email, as a note, or to ‘autocomplete’ when you open a website or app. It will be a goldmine for fraudsters if your device is lost or stolen.
9. Read all bank and card statements regularly to check for suspicious transactions.
10. Check your credit report, because it lists your credit accounts and what you owe, so you can spot applications and spending that are nothing to do with you.

“It’s very easy to lapse into the assumption that fraud is something that happens to someone else,” continued Nick Mothershaw.  

“However, we all have a responsibility to be vigilant and take measures to protect ourselves, online and offline. The threat is growing and it requires us all to be extra vigilant.”

Experian’s ID Fraud Tracker, a quarterly analysis of fraud rates across a variety of consumer financial products, reveals a 203% increase in the total number of fraudulent credit applications over the last two years. Current account, credit card and loan fraud were the most common types of credit products that fraudsters applied for in other people’s names, making up 94% of the total.

Households with high salaries, large disposable incomes and accruing assets remained another priority target for criminals, accounting for 35% of all third-party fraud (fraud committed without the knowledge of the person whose identity is used) in 2016.

Young professional families with children, and mature families with older children, also continue to be fraud targets because of their higher levels of income. Making up 28% of the UK population, and representing 17 million individuals collectively, these groups tend to live in market towns and cities across England.

ENDS

*Figure based on UK adult population from ONS 2011 census, Experian segmentation analysis of FSS Family Pressures group (85 of UK) and Hunter data on the number of third party applications made in 2016.

Heat map showing concentration of low income families across the UK available on request. 

Methodology: 

Information is based on 2016 Experian fraud data. Experian works closely with National Hunter, the UK’s leading fraud prevention system, operated by Experian on behalf of members. It enables financial institutions to cross-match applications against more than 100 million previous application records in order to spot commonalities and anomalies that are potentially indicative of fraud for further investigation.

Experian has combined the insight available from Hunter with FSS, Experian analysis on the financial behaviour and attitudes of the UK population. Each group exhibits different behaviour with regards to their attitudes to finance, lifestyle, social, economic and behaviour.

About Experian: Experian is the world’s leading global information services company. During life’s big moments – from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers – we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organisations to prevent identity fraud and crime. 

We have 17,000 people operating across 37 countries and every day we’re investing in new technologies, talented people and innovation to help all our clients maximise every opportunity. We are listed on the London Stock Exchange (EXPN) and are a constituent of the FTSE 100 Index. Learn more at www.experianplc.com or visit our global content hub at our global news blog for the latest news and insights from the company.

Contact:

Priya Sahib

Mobile: +44 (0) 7816 491152 Email: priya.sahib@experian.com

Helen Line

Mobile: +44 (0) 7825 000598 Email: helen.line@marlinpr.com