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Current account fraud: record numbers of us lying to our banks

As current account fraud hits a new record high, John Fitzsimons finds out why so many of us are lying to our banks, and what happens if we get caught.

A current account is perhaps the most ubiquitous financial product around. A study by the Office of Fair Trading a couple of years ago found that 90% of us use them regularly. But according to new research, the humble bank account is also the subject of a fast growing form of fraud.

James Taylor, Head of PR at Experian, told me that the firm’s Fraud Index had found that current account fraud is now at a record high.

"Current account fraud has surged over the last few years," he said. "Going back five years, it was almost not a problem. Now it's the most targeted financial product. 44 in every 10,000 applications in the first quarter of this year were found to be fraudulent."

One area of particular concern is people lying about their financial status or history in order to try to get their hands on overdrafts or other credit that they would not normally qualify for.

So how good are the banks at spotting fraudulent activity? And what happens if you get caught?

Richard Hurley, Communications Manager of fraud prevention service CIFAS, explained that banks undertake rigorous checks before approving applications, to ensure you really are who you say you are.

He continued: "No bank is under any obligation to offer a bank account to an individual. If they detect fraud on the account, it doesn't mean they have to keep the account open." He cited the example of an applicant using falsified payslips to get a current account that they have every intention of maintaining properly. This is still fraud, so in all likelihood the bank will close the account, shutting the applicant out. This can then lead to further issues down the line with future bank accounts.

Getting caught trying to lie to your bank can have some pretty unpleasant ramifications. So why are more of us attempting to kid our bank managers?

Matt Hartley, Media Officer of the Consumer Credit Counselling Service, suggested it's a symptom of how tricky many people are finding things at the moment. He added: "Rather than trying to secure further lines of credit, it's important to look at the underlying causes of your difficulty. More credit is not the answer if you already have a debt problem, it will only make things worse.

Lying to your bank is never the answer. No matter how bad your money worries may be now, they’ll be an awful lot worse if you get caught attempting current account fraud.

More on current accounts:

GetCash: NatWest and RBS unveil cash withdrawals using smartphones

Barclays Feature Store: build your own packaged current account

M&S Bank to launch

Current accounts: Halifax relaunches £100 switching bonus

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  • 19 July 2012

    I find it interesting that for many years when demanding to see the manager of my local bank, I was told that they no longer had one, so I was palmed off with an office pleb. Now they have a speciman stuck at a desk behind the counter with the rest of the clerks with a sign on it saying "Manager". In the old days the local Bank Manager was a recognised pillar of the community. How the mighty have fallen along with the banks reputation.

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  • 26 June 2012

    @ Fenemore, I take it from your comments you are a charity worker then. If so good on you. A qualified IFA is not a front of house employee, if a child of 5 can see then need to protect against critical illness on a mortgage then you have just insulted over 41% of the whole of the UK Home Owners Market. This is the amount of people who do not have any life cover or critical illness protection in place to pay their mortgage off in the event of death or eailer critical illness. So please do your homework before you coming out with something as outrageous and ill-informed as your comments regarding something you quite clearly know nothing about. Only people that are qualified to offer financial advice should be able to give financial advice. I do not go to my dentist to see about my sore foot. You do not know me so again I take offence to your comment about what I would and wouldnt do in a given situation so stick to what you know rather than speculate on something you are clueless about. Oh and by the way, targets are there to give a company direction and also to map out a business plan for anticipated sales required in order to break even/make a profit. If you are so wet behind the ears not to realise that sales HAVE to be made for almost ANY company to survive then good luck on your pink cloud, the fact of the matter is there are enough good legitimate sales out there in all forms of business but unfortunately there will always be people that will try to take advantage of 'the system'

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  • 21 June 2012

    Back in the early 80's, I wanted to borrow £100 to buy a push bike to get to and from work. I spent half an hour explaining the reason for the loan to my bank manager who, at the end of the interview, granted me the loan. Sounds stupid now, doesn't it, what with instant credit etc., but that was how it was done then. Then, all of a sudden, we had instant credit (up to £1000 back in the mid 80's). Also, car manufacturers conceived a way to sell a brand spanking new car to the masses. Ford called this 'Options' and essentially meant that half the loan amount was deferred to the end of the initial loan period, splitting the loan in to two portion. You paid off half the car during the first period, but you paid interest on the full amount. To be honest, we have been conditioned to want it now, regardless of the cost. In the past, we saved hard to buy what we wanted, but now we get it now, and pay for it later. Oh, and there is peer pressure. Your mates are driving the latest premium brands, have iPhones and iPads, and watch SkyHD. If they can do it, so can you, and to hell with what it will cost you. Even advertising uses this sort of pressure to encourage people to part with money they don't have, in subtle ways. So, if you are going to borrow money, use it to buy what you absolutely need now, and not for what you desire now. Oh, and as for lying to your bank, tell them that you think they are a fantastic bunch of people. ;-)

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