August 2022
August 2022
Cases grow to 28,600, +31.1% compared to 2020. Average amount falls by 23.3% to €4,350.
Credit fraud carried out through identity theft continues to have a significant impact on Italian consumers, with the unlawful use of the personal and financial data of others to obtain credit or acquire goods with the deliberate intention of not repaying the loan or paying for the goods.
According to the latest figures recorded by the CRIF Credit Fraud and Identity Theft Observatory, in the last year over 28,600 cases of this type of fraud were detected in Italy (+ 31.1% compared to 2020). This increase is a result of the continuous rise in online purchases (+18% in 2021), which has contributed to the growth of cases perpetrated on virtual channels, where checks are often less effective.
The estimated damage reached €124.6 million, which is relatively unchanged compared to 2020, since most cases correspond to a simultaneous decrease in the average amount defrauded, which stands at €4,350 (-23.3% compared to the previous year).
“Credit fraud perpetrated through identity theft is constantly evolving, with criminal organizations making use of increasingly sophisticated techniques that the individual consumer is often unable to detect. After a decline in 2020 due to lockdowns and a contraction in financing activities, the resumption of normal operations in 2021 saw an immediate rise in cases. And this trend was not only seen in Italy; according to the Federal Trade Commission, fraud cases grew by 50% in the United States, while in the United Kingdom, according to CIFAS, the increase was 22%. Therefore, we must not let our guard down; the increasing use of e-commerce, the acceleration in the use of payment cards, and the digitalization of many processes may further increase risks and result in a surge in cases” commented Beatrice Rubini, Executive Director of the CRIF Mister Credit line.
In 2021, the cases detected were mainly for amounts below €1,500 (+52% compared to 2020), showing how criminal organizations are no longer dismissing fraud on lower-value goods. There was also a significant increase in cases of fraud for amounts between €5,000 and €10,000, which went from 9.6% to 14.0% of the total (+45.7%), and for those above €10,000, which reached 12.7% (+13.9% compared to the previous survey).
From the latest survey, only cases for amounts between €1,500 and €3,000 (-28.9%) and those between €3,000 and €5,000 (-10.1%) showed a decrease.
Despite representing the main type of finance most affected by fraud with 34.4% of the total, fraud cases relating to retail finance for the purchase of goods and services (such as cars, motorcycles, furniture, electronics, and household appliances, etc.) decreased by about -30%. However, there was a 17.5% increase in the average amount compared to 2020.
On the contrary, personal loan fraud, which with 22.5% of the total number of cases is in second place by type of finance, continued to increase (+56.6%), although recording an 8.2% decrease in the average amount.
Credit card fraud recorded a growth of 59.7% compared to 2020, after the sharp contraction the previous year due to the lockdowns imposed following the outbreak of the pandemic.
Finally, it is interesting to note some trends, which although minor, need to be monitored. Among these, is the emersion in 2021 of fraud relating to the payment in installments for e-commerce purchases ("buy now, pay later"), even if this type of fraud still accounts for a very small share (0.2% of the total).
Going into the detail of the goods and services purchased using fraudulently obtained retail finance, 40.7% of cases concern the purchase of household appliances, up 25.3% compared to the 2020 survey.
A significant share of the cases also involved the electronics - IT - telephone sector (9.0% of the total) and the car and motorcycle sector (8.8% of the total).
This was followed by loans for furniture (6.1%) and those for building works and renovations (5.4%).
From the CRIF – Mister Credit analysis, emerges that the majority of victims are men (63.5% of the total). Compared to 2020, the distribution of cases by gender saw a further increase in male victims (+2.7%).
Looking at the distribution of fraud by age group, on the other hand, the trends already highlighted in 2020 were confirmed: the age group in which there was the greatest increase in cases is the under 30s (+8.0%), while there was a decrease in the over 60s (-6.9%). The 41-50 age group followed the same trend as the youngest age group as the segment most affected by the phenomenon, with 22.5% of victims.
Analysis of the alerts on ID documents that emerged from queries made to the fraud prevention services managed by CRIF, with the intermediation of SCIPAFI databases, showed the predominant use of identity cards as an identification document, accounting for more than 80.7% of the total, followed by driving licenses at 17.7%.
More specifically, 1.9% of the documents presented during the identification phase were found to be counterfeit identity cards, or valid but not belonging to the subject. For driving licenses, on the other hand, 4.1% were found to be non-existent licenses or those not belonging to the subject.
With regard to the type of employment contract of victims, it emerged that 1.8% of loan documents for employees were found to be non-compliant, compared to 2% for self-employed workers, 1% for pensioners, and 0.9% for other categories.
In contrast to what was found in 2020, the time to detect fraud was shorter, with 42.4% of cases being discovered within the first six months (compared to 36.3% in 2020).
At the same time, cases discovered after more than 3 years decreased (-11.3%).
“Vulnerability to fraud is often increased by the risky behavior of victims, for example, with the careless posting of identification data on the web and on social media or personal information that can be used by criminal organizations to reconstruct false identities. For this reason, it is essential that consumers pay the utmost attention to adequately protecting their digital identity, activating an alert notification for credit card transactions, and services that promptly notify consumers if their personal data is being used to request a loan or if their personal information is illegally circulating on the web” explained Beatrice Rubini.
“Financial players have always been very aware of identification issues in the creditworthiness assessment phase. In the last 2 years, however, with the acceleration of digital transformation processes, anti-fraud controls have also intensified in other areas, such as the onboarding of customers when opening an online current account or renewing their credit card, and, more generally, in the protection of digital payment systems. The tools supporting these checks give access to a broad ecosystem of traditional and innovative data, as well as advanced analytics, all available on platforms that allow real-time checks to be carried out, with smooth processes for consumers” concluded Fabrizio Arboresi, CRIF Senior Director.
