Almost $2 billion worth of credit applications in the past year were flagged as potential fraud risks, with identity theft fast becoming the modus operandi for fraudsters.
Credit information company Veda analysed $1.6 trillion worth of credit applications in the year to June 30 and found that $1.9 billion worth of those applications posed fraud risks.
Veda red-flags applications if any of the details, like address or driver’s licence, are associated with a previous known fraud.
Red-flagged applications have increased by 52 per cent in two years and are rising as a percentage of all credit applications, the company says.
Veda’s general manager of fraud and identity solutions Imelda Newton said a number of lenders were processing high-risk applications, unaware of the possible links to fraudulent activities.
Ms Newton said identity theft was the fastest growing form of credit application fraud, as fraudsters continuously change their tactics.
“What we’ve found is that the fraudsters have adopted using stolen identities as opposed to using fictitious identities,” Ms Newton said.
“In fact, over the past year, we’ve seen the use of those stolen identities increase 103 per cent.”
The information can be collected by fraudsters breaking into people’s homes, taking mail from their letter boxes or stealing wallets and handbags, Ms Newton said.
The fraudster then assumes the victim’s identity and applies for credit in their name.
Ms Newton says people can protect themselves against identity theft by putting an alert on their credit file.
It’s a good idea to check your credit report every year. As well as affecting your ability to get a loan, incorrect listings can alert you to things like identity theft.
Loan Smart has a free factsheet “Your Credit Report” that gives you information on what might be listed in your report and details on how you can get a free copy of your own personal credit report. If you would like a copy of the factsheet just send an email to firstname.lastname@example.org.