How to spot financial fraud & its effects on credit history

Fraud is one of the most common crimes in the UK. According to the UK Finance Fraud Report, £629.3 million was stolen in the first half of 2025 alone, showing a 17% increase from the first half of 2024. 

Now you know how common financial fraud is, it could help you spot it in the future. 

Here’s what you can do to avoid becoming a victim of financial fraud and what could happen to your credit history if you do. 

What is financial fraud?

Financial fraud is any deceptive act designed to illegally deprive you of your money or property. 

Fraudsters pose as trusted organisations or family members to manipulate their victims, use stolen information, or exploit digital systems to gain access to finances. 

These scammers are quick and sneaky. This is why it’s so important to know what to look for so you can spot suspicious activity before it causes any damage. If you are caught up in financial fraud, it can happen to anyone, and you can get it sorted out.

The common types of financial fraud

Financial fraud is split into two categories: direct banking fraud and credit card fraud. Both can feel invasive and can have knock-on effects if not dealt with. 

Direct banking fraud can happen when the fraudsters get access to your bank account and take money from there through withdrawals, standing orders or unauthorised transfers. These could be small or big amounts. It all depends on the fraudster and what scam they are running. 

Credit card and credit fraud target your borrowing power as well as your cash. They could open credit accounts in your name (identity fraud), take out loans without your knowledge, or get access to and use your existing cards. 

Investment fraud is also common in the UK. It can look like cold calls, emails or direct approaches encouraging you to invest in opportunities which are worthless or don’t exist. This is also known as “boiler room” fraud, and the fraudster will often use professional-sounding language or fake credentials to look more legitimate.

Spotting the signs of fraud

It can be tricky to spot fraud if you don’t know what to look for (and sometimes it can be tricky even if you do!). 

Keep a close eye on your bank statements. It will help you catch any issues or strange activity early. 

Here are some common red flags:

• Unexpected transactions on your bank or credit card statements
• Messages or calls claiming to be from trusted organisations (such as banks, HMRC, utility providers, or Royal Mail) asking you to share personal information or move money urgently
• Phishing emails or texts containing strange links to fake websites
• Hard searches appearing on your credit report (even though you know you didn’t apply for credit around that time)
• Payments which are declined or bounced when you have enough money in your account
• Emails (or letters) about credit accounts you don’t recognise
• Missed payment notifications for debt you didn’t take out

A good rule of thumb is this: If you’re not sure about the source of the money request, or any money-related information you receive, go directly to the bank, lender, or business to verify the information. 

We’ve got a whole blog dedicated to helping you spot online scams. Check it out here to learn more.

Does fraud affect your credit history?

The fraudulent activities could cause problems such as:

• Missed credit repayments
• Unpaid balances for accounts opened by fraudsters
• Defaults recorded against your name

If you notice any of these issues on your report after you’ve been a victim of fraud, it’s important you get them resolved as soon as you spot them. Leaving them as they are can cause problems for your credit history (and in turn your credit score). 

Get in touch with the credit reference agencies (CRAs) and any lenders you might have an account with to get any problems fixed, so the fraud issue doesn’t have lasting effects on your credit. Follow our guide on how to reach out to the CRAs in the UK.

What to do if financial fraud happens to you

Get in contact with your bank and lenders to freeze any affected accounts as soon as possible. Make them aware that there’s a security issue and can take steps to assist where they can. 

It’s a good idea to report the issue to the CRAs as well if you think any of your credit accounts have been compromised. Keep an eye out for any incorrect information that might be added to your report in the coming months, too. 

Keep a record of all of the communication you have with your banks and lenders so you can refer back to it if needed. 

It can feel overwhelming when you have to fix issues caused by fraud, but taking control of the situation is the best thing you can do to protect your financial future.