Account takeover fraud continues to rise

The hijacking of an existing bank, credit card or other account by a third party is something all individuals fear. Unfortunately, this type of fraud is quickly becoming one of the most prevalent fraud threats to individuals and organisations, as new figures from CIFAS, the UK’s Fraud Prevention Service, reveal.

The takeover of existing accounts by third parties can take numerous guises: from one-off hijacks in order to pay for goods, to the complete emptying of an account (such as cancelling existing cards or contracts and ordering replacements to be delivered to the fraudster’s address). In order to commit such frauds, the fraudster has to be able to circumvent the security processes of the organisation that holds the account: and this involves knowing the answers to security questions, passwords, PINs etc.

The convenience of the Internet is something that most consumers would not do without. The same applies to the fraudster. Some 71 percent of all takeover frauds were carried out online in the first four months of 2012 (compared with 54 percent in the same period of 2011), with the figures even more alarming for plastic card (e.g. credit card) accounts: where nearly nine of every 10 account takeovers were committed online.

Richard Hurley CIFAS Communications Manager says the takeover of an account requires data: “From a password and username, through to PINs or security answers, the availability of data is something that society is coming to terms with, but individuals and businesses must see the clear dangers in these figures which show how fraudsters are able to exploit habits or systems to acquire such data.”

Richard says that regular changes to passwords, using strong passwords with a mix of cases, symbols and digits, a full internet security package and not using unsecured public connections to carry out transactions are the minimum standards that consumers must follow in order to minimise the potential of becoming a victim of financial crime.