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Credit card fraud hits 10-year high

Fraud levels skyrocketed in the final quarter of 2022 as consumers looked to borrow to cover Christmas costs.

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Credit card application fraud rose to its highest-ever level last year, according to Experian analysis.

It rose by 18 per cent in the last quarter of 2022, bringing the overall fraud rate for the year up to the highest yearly rate that Experian has recorded in the last 10 years.

This extreme rise in fraud cases indicates that the scale of the issue is a problem for both consumers and financial services firms that look to prevent fraudulent activity.

“Our latest figures show the scale of the fraud epidemic facing consumers and financial services companies,” Experian UK&I managing director of identity and fraud Eduardo Castro said.

“The rise in first-party fraud is also striking, as it suggests that households are misrepresenting their financial situation to meet additional costs, or even cover everyday expenditure.”

First-party fraud – with individuals giving false information or misrepresenting their identity in order to gain access to products with better terms – has reportedly doubled over the last two years to now account for 27 per cent of all applications.

The figures surging in the last quarter of the year suggest that households were trying to borrow more over the Christmas period.

“It’s an ongoing, evolving battle, with fraudsters always looking at new ways to dupe victims,” Castro continued.

“However, lenders are deploying new technology to help them identify potentially fraudulent activity as early as possible, preventing it and minimising losses to both them and their customers.”

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