Types of Financial Crime

Fraud Advice

Account Takeover

An account takeover occurs when an innocent party’s account is hijacked by a third party who subsequently commits unauthorised activity on the account.

The takeover usually happens via the theft of existing security details. Unauthorised activity could involve changing security details, performing bank transfers, and contact detail changes, as well as issuance of new products and replacement cards.

Any account could be taken over by fraudsters, including bank, credit card, email, and other service providers.

The theft of security details can take place in a number of ways but it is usually in the form of a confidence trick, so by first gaining the victim’s confidence. Some of the common methods of security compromise are electronically via phishing, spyware or malware, and also via vishing (phishing via a phone call).

Fraud has been committed if a financial loss is incurred.


Compromised Card Fraud

This is where a card transaction occurs without the card holder’s authority.

In order to commit this type of financial crime, the fraudster has been able to obtain the security details relating to the card, such as card number, ‘valid from’ date, ‘valid to’ date, PIN, three digit security number, and of course the cardholder’s name. 

These details may have been obtained using various means such as phishing emails, vishing calls, social engineering, hacking, or a point of compromise at a retailer.

One of the most prevalent ways that fraudsters conduct this type of financial crime is via online purchase of goods or services.


Impersonation Fraud

Impersonation fraud occurs when an individual’s identity is stolen.

The perpetrators will use personally identifiable information (including name, date of birth, contact details and bank account information) to gain access to resources, credit, and other benefits in the victim’s name, which may then be used to facilitate other criminal behaviour such as terrorism.

The most common use of impersonation fraud is to obtain financial benefits including obtaining credit cards, loans, insurance policies, goods, and services.


Money Mules

This relates to instances where a person allows, either knowingly or unknowingly, the receipt of funds into their bank account and then arranges to move the funds on, typically sending the funds overseas. It is highly likely these funds have been stolen from an innocent person by an account takeover of that person’s bank, savings or card account.

Persons are recruited by email, most likely purporting to be an offer of employment, via job search websites, or a social environment.

The remuneration offered is usually a percentage of the funds transferred via the account. The offer may seem very plausible but remember handling money that has been obtained fraudulently is a crime, even if you are unaware of where the money originated from.


Property Hijack

This occurs where fraudsters attempt to obtain mortgages on or facilitate the sale of properties which they do not own.

Properties which are unencumbered (so there is no existing mortgage or financial liability associated to it) are at most risk and this is further heightened where the property is vacant or is a rental property, due to the reduced monitoring and focus.

Insurance Fraud

Ghost Broking Insurance Fraud or Illegal Intermediaries

Best described as an individual or group of individuals who deliberately misrepresent themselves as an insurance broker or agent in order to provide insurance policies, ghost broking see a person fraudulently act as an intermediary between the customer and the insurer. They tend to target the vulnerable such as members of non-English speaking communities, student communities, or those looking for cheap insurance.

The customer may provide correct information to the ‘broker’ but this information is altered by the ‘broker’ in order to obtain a cheaper price from the insurer. Unfortunately, the insurance policy provided to the customer will be invalid because it will not match their true details.

Alternatively the ‘broker’ will provide the customer with fake insurance documents without even attempting to place the policy with an insurer but still taking a premium from the customer.

Whichever occurs, it is likely the customer will not be aware that they are not insured until stopped by the police.


Induced Accidents

This is an accident which is induced by organised, collusive parties who target innocent motorists.

By inducing accidents, organised criminals look to facilitate compensation payments for injury damage, hire vehicles, recovery, and storage.

A typical induced accident scenario would involve a fraudster deliberately pulling his car in front of a victim and slamming on their brakes in the hope of being shunted in the rear. If executed correctly, the unsuspecting victim has little chance of avoiding the accident. Fraudsters have also been known to disable brake lights on their vehicles to increase the likelihood of the accident occurring.


Staged Accidents

Two vehicles, both in the hands of collusive criminals, are crashed together to facilitate an insurance claim. In some instances, the cars aren’t even crashed but damaged through other means to give the impression of being involved in an accident before a claim is raised.


Contrived Accidents

Contrived accidents are virtual frauds, which involve the submission of fabricated claims for accidents which never actually took place.


Social Crime

Doorstep Crime

This type of criminal activity can include:

  • Distraction burglary: Individuals will use false information, tricks or distraction methods in order to gain access to the premises and to steal property which belongs to the victim.

Rogue trading - Individuals will target consumers and will deliberately overcharge for unsatisfactory goods and/or services. This includes:

  • Charging for unnecessary or unfinished work
  • Charging for work which is required due to deliberate damage which is caused by the perpetrator
  • Charging for work which was not carried out
  • Using intimidating behaviour in order to force payment

The victims of this criminal activity can vary, however older and vulnerable adults are most at risk.

Safe Guarding Yourself Against Fraud

Sometimes taking some simple precautions can reduce your chances of being a victim of financial crime.

Personal Information

  • When disposing of documents that contain personal information, you should look to shred or safely dispose of the documents so that it places them beyond further use. Such documents include bank or card statements, receipts, utility bills, and even mail shot letters that are personally addressed to you. Rubbish bin raiding is one of the ways that identity thieves can build up all your personal details in order to commit impersonation fraud or account takeovers, even if that means piecing together snippets of information from several documents
  • Unless required or needed, try not to carry documents such as your passport, driving licence, or even credit cards. In addition to being costly to replace if your bag or wallet should be stolen, the documents can provide the thief with your identity
  • Should you find that you are not receiving your mail as expected, in particular bank or card statements, speak to the Post Office immediately and, of course, your bank or card issuer. Mail interception is also practised by identity thieves to enable them to obtain personal information. Be especially vigilant if living in a building with a communal hall where mail is delivered

Bank, Savings, and Card Accounts

  • Check your bank and credit card statements when received. Unexpected entries, even credit items (funds paid into the account) may be the first indication that someone has gained access to your account or has your card security details
  • Don’t leave your till receipts behind when a purchase is completed or drop or throw away the receipt. Shred it or safely dispose of the receipt when it's no longer required
  • Limit the number of credit or store cards you have and look to cancel any inactive accounts. Even unused accounts with a nil balance can be used by fraudsters should they obtain the security details
  • Never write down a card PIN and do not choose obvious numbers such as sequential numbers, dates of birth, or telephone numbers
  • Do not give account numbers over the telephone or complete card transactions over the telephone in public places or even at your place of work
  • Do not allow a card out of your possession, such as at a restaurant when paying the bil.

Online Security

    More and more organisations are providing online access to make interactions easier and more time saving. Additionally, there has been a proliferation of social media applications that help us keep in touch and up to date with family and friends, near and far. All this helps us to manage our lives better. Whilst, for the majority of the time this is safe, there are people looking to take advantage of vulnerabilities and indiscretions. To reduce that risk, when online:

    • Ensure you have anti-virus software on your device, even your smartphone, and that the anti-virus software is up to date. Likewise, ensure updates to software on your device are downloaded as these can include security updates to protect against discovered vulnerabilities
    • Do not use the same password in the log on process to different applications. Avoid using your name, the name of family members or pets, and date of births as passwords. Create strong passwords by including capital and lower cases letters, special characters, and numbers
    • Do not divulge passwords to anyone, either on or offline
    • Whilst it's great to keep in touch with family and friends via social networks, ensure the security options are set to restrict who can view your profile. Be mindful about the level of details added to your profile such as date of birth, nicknames, your children’s and pet’s names, places of work, employment, and addresses. This level of detail can provide someone with sufficient information to use your identity. As tempting as it is, try to avoid posting updates on your profile about forthcoming absences from the home such as holidays
    • Be wary of emails from unknown sources, especially where they include hyperlinks or ask you to confirm security details. It's highly unlikely that a bank or card issuer will send a mail that requests you to confirm security details. Other tell-tale signs are poor spelling and grammar
    • Use spam mail filters if provided by your email provider

    Moving House

      Moving house, already a stressful time, can be worsened as it may be used as an opportunity for a fraudster. To minimise this risk, ensure that you:

      • Speak to the Royal Mail regarding their Mail Redirection Service so that your mail is forwarded to your new address for at least a year
      • Contact all the organisations you deal with to update them of your new address, so banks, card issuers, building societies, DVLA, pension companies, insurers, HMRC (tax), utility companies including your mobile telephone provider, catalogue companies, and others. 
      • Contact your new council and arrange to be registered on the electoral roll at your new address and de-register at you old address. Finance organisations not only use this information to check that you live where you say you do but also to identify when an unknown party is using your identity (identity theft).

      Protecting Your Property

      • In an attempt to mitigate the risk of property hijack, it's good practice to ensure that your property is registered with the Land Registry (see Useful Links)
      • Furthermore, you can register with the Land Registry’s (free of charge) Property Alert Service which will provide you with alerts if a fraudster attempts to obtain finance against your property.

      Driving, Insurance and Claims

         Members of the public can unfortunately be affected by the likes of ghost broking or intermediary fraud and induced accidents. When dealing with an unfamiliar or unrecognised insurance broker take some steps to verify that the broker. Do a check with the British Insurance Brokers’ Association (BIBA) either online or by telephone. Alternatively, brokers are authorised and regulated by the Financial Conduct Authority (FCA) and are provided with a registration number. Ask the broker for their FCA registration number and validate the broker’s details via the FCA Financial Services Register. If in doubt, walk away. And remember, if it sounds too good to be true, it most likely is!
        Despite our own driving ability and how careful we are, there are those out there who induce an accident and involve the unwary. Ways to avoid being a victim of an induced accident are:

        • Keep a safe distance to reduce the risk of running into the back of someone. 
        • Beware of tailgaters whose purpose is to deflect your attention from the vehicle. The vehicle in front is participating in the deception with the aim to brake suddenly forcing you to hit the back of them
        • Busy roundabouts and filter lanes at rush hour can be an ideal opportunity for induced accidents; whilst keeping pace with the traffic, the car in front suddenly brakes and a rear end collision results. Don’t be rushed in these situations and always be wary of the car in front
        • A more recent technique being used to induce an accident is a play on good manners creating a false sense of security. Whilst you are waiting at a junction or side road, a driver flashes his headlights to allow you to pull out. Unfortunately, once you are committed and your attention is diverted to the direction you are now travelling in, the driver either does not stop at all or slows down and crashes into the side of your vehicle.

        If you are unfortunate enough to be involved in an accident and you have suspicions about the intentions of the other driver, do the following:

        • Note as much detail of the incident as possible
        • Take witness details if available
        • Note the other drivers details including their insurer
        • Note the other vehicle details including registration
        • Count the number of passengers in the other vehicle. When the other driver submits a claim it may also include personal injury claims relating to “passengers” who were not present at the time of the incident
        • Try to take photographs of the damage to both vehicles. In some cases of induced accidents, the other vehicle may have been damaged before the incident or after the incident to increase the compensation claim
        • If safe to do so, take photographs of the location of the incident
        • Advise your insurer of your concerns when reporting the incident providing the above information as any of this information could help your insurer identify an induced accident. Consider reporting the incident to the police

What to do if you are a victim of fraud

If a you are a victim of identity impersonation fraud

It is likely that the first you will know of this is due to the receipt of a letter from a finance organisation asking you to contact them about an application they have received or an account that they have opened that is now in arrears. Even though you may not recognise the organisation as one you have had dealings with you should not ignore this because:

  • It could have implications to your credit worthiness
  • Further applications could be made or accounts opened using your details

Contact the organisation and advise that you did not make the application or open the account. You may be asked to confirm in writing and/or provide evidence of your identity but, once done, the organisation should take steps to remove details of the application or account from your credit file. If they are also a member of CIFAS (see useful links below) they will register information that alerts the reset of the CIFAS membership that you have been a victim.

Consider applying for your statutory credit report which can be obtained from a credit reference agency. There is a relatively small charge for this but it will provide you with two important pieces of information: a list of accounts registered to your name, and a list of credit searches made by organisations as a result of applications for accounts that they have received. The report also gives the name of the organisation that opened the account or did the credit search. This will allow you to contact the organisation if there are any accounts or searches that you do not recognise.

Consider placing a protective registration with CIFAS. In addition to alerting the CIFAS membership that you have been a victim, it incorporates other features to prevent further fraudsters using your details, and also reduces potential impact to applications you genuinely apply for.

It most cases, all of this is fairly straight forward to deal with but occasionally it is not so; in this instance consider approaching the Citizens Advise Bureau for assistance.


Account takeover, compromised card fraud, or unknown transactions

Banks and card issuers are very alert to the instances of fraudulent transactions taking place without the customer’s authority and it is most likely that your bank or card issuer will try to contact you about the transaction or transactions. However, if this has not happened and there is a transaction you do not recognise, speak to your bank or card issuer immediately. They will be able to deal with the matter and, more importantly, take action to prevent any further fraudulent transactions debiting your account.

Useful Links