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Banks warned 'hidden frauds' on the rise
Published 24 February 2012 by Daniel Culpan
Fraud experts from FICO and Equifax have warned banks that, as card fraud has fallen in the last 10 years, criminals are now turning to 'hidden fraud'.
Card fraud has fallen to its lowest level for more than 10 years, but according to two experts, instances of 'hidden fraud' are on the rise, Credit Today reports.
At a meeting yesterday, fraud experts from FICO and Equifax - who were talking as part of a collaboration aimed at reducing fraud - talked about ways that banks that issue cards and the organisations that process them could work together to help detect criminal activity in the future.
Figures released by FICO last month revealed that counterfeit card fraud across Europe fell by 60% between 2009 and 2011 - due to the use of chip and PIN technology and improved fraud analytics.
However, as card security has improved, criminals are turning to other methods, such as internet crime and first-party fraud - where people take out credit in their own name, but have no intention of paying it back.
Head of Consumer Products at Equifax, Neil Lewis, said: "There are opportunists who sign up for loans with a bank where others have recently gotten away with first-party fraud, and there are 'sleepers' who make payments for months in order to fool a bank into relaxing its rules and granting more credit."
A spokesperson for thinkmoney commented: "Anyone who notices any suspicious activity on their bank account statements should speak to their account provider immediately, so the necessary action can be taken."