Under 30s increasingly committing misuse of facility fraud

Posted by George Coburn in Personal Finance on 13 December 2016 - George is a Credit Analyst at checkmyfile

Have you seen an advert recently on social media offering quick money? What about an advert that has some money-making scheme that seems too good to be true? Well, not only could it be a scam, you may also be committing a crime if you sign up for them.

According to research published by Cifas, those under 30 are the most likely age category to commit misuse of facility fraud, whether it be intentionally or through naivety having not understood what they’re doing. Currently, 54% of this type of fraud is committed by someone under 30.

Misuse of facility fraud is when someone misuses their own account in a fraudulent way. An increasingly common practice is criminals encouraging individuals to act as a stepping stone to transfer money from one place to another in the hope to launder it. The account holder is then paid for their part of the money laundering process. What many people don’t realise is that being involved in money laundering could land you in prison for as many as 14 years!

Another common example is when someone takes out a credit agreement with no intention of paying it. When an individual has done this, it is pretty obvious when viewing their credit report and the accounts will usually show as being opened, entering arrears and then subsequently defaulting. According to Cifas, the most common accounts to be misused in this way are bank, communication and online retail accounts.

It may also be treated as misuse of facility fraud if you pay someone despite knowing the payment will bounce, or selling your bank account to someone else so they can commit fraud using with it.

There are a number of fraud databases in the UK and when a lender concludes someone has acted fraudulently and report the information, this could cause the individual to get declined future credit at a minimum.

According to Cifas’ chief executive Simon Dukes, “Our figures show that young people are disproportionately at risk of this type of fraud. With Christmas only a few weeks away we want to warn young people, in particular students, to be wary of anyone approaching them in the student union or elsewhere with promises of cash for the use of their bank account.

“Criminals may make it sound attractive by offering a cash payment but the reality is that letting other people use your account in this way is fraud and it’s illegal. You may end up with an extra £200 at Christmas but you could also end up with a fraud record – it isn’t worth it. We want to send a clear message to try and deter young people from getting involved in this kind of activity.”

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