Equifax sees increase in 'recession fraud'

27/04/2009

Many consumers turn to fraud in times of recession, pushing overall rates up, Equifax said today.

New analysis from the financial research firm suggests that people become "increasingly desperate" when the economy suffers a downturn, causing many to turn to ID theft and other forms of financial fraud.

This is likely to prove worrying news for UK consumers, as the economy entered recession at the end of last year and shrunk by another 1.9 per cent over January-March - the sharpest three-month drop since 1979.

Personal incomes have been hit by a rise in unemployment, with the jobless total hitting 2.1 million at the end of February, a 12-year high.
Figures from CIFAS, the fraud prevention service, also showed an overall rise in fraud levels of 16 per cent last year - although ID theft numbers were found to have dropped by 3.7 per cent.

Neil Munroe, external affairs director for Equifax, said: "People become increasingly desperate when their financial circumstances get worse and turn to these types of activities. Also, we are aware that consumers become more tempted by offers in such circumstances and are therefore more willing to take risks with their personal data."
He added: "The figures from CIFAS do show a slight downward trend [for ID fraud] but they do not cover all types of identity theft, for example individual credit card transactions."

Tags; Debt Management and Banking, Recent Graduate Debt, Credit Card Lifestyle,

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