FICO.com defines application fraud thusly:
Application fraud is a form of deception where individuals misrepresent information or illegitimately use someone else's personal information (PII) to obtain various benefits, typically financial, such as opening bank accounts or applying for credit cards.
And from the always interesting Biometric Update, February 11:
Trust as a target: The parallels between application and romance fraud
At National Hunter’s annual conference, many experts reflected on the parallels between romance and application fraud. Sharing one of the key takeaways, Dave Rossi, Managing Director at National Hunter, highlights: comparing these mechanisms and learning from them is essential if individuals, lenders and banks are to combat these threats effectively.Romance scams aren’t only heartbreaking. They are big business for criminals.
Every year in the UK, there are more than 9,400 reports of romance fraud. This equates to a loss of more than £106m or around £11,200 per victim on average. The reports of romance fraud continue to rise at a time when identity fraud as a whole is surging. The common thread tying them together? Trust is exploited and identities are misused.
Romance scams are often seen as personal crimes rather than financial ones. However, behind this emotional narrative sits an uncomfortable truth. The same social engineering techniques used to extract money and information from victims increasingly feed application fraud and identity misuse.
By looking at the tools and tactics used in both of these scams it is quickly made clear that misplaced trust remains fraudsters’ most effective tool. Learning how to combat this effectively is critical.
How criminals turn trust into a weakness
Social engineering tactics are commonly used across several types of fraud, but are arguably most effective in romance scams. The criminals committing romance fraud are experts at identifying the right person to target. These victims are not careless. Warning signs are simply harder to spot, especially when emotions are involved. Additionally, advances in AI-generated images and deepfake videos have made it increasingly difficult to distinguish between what is real and what is fake. These fraudsters rely on two key ingredients: turning trust into a weakness and creating urgency as they move from emotional to financial exploitation.The parallels with application fraud begin to emerge at this stage. While romance scams exploit emotional trust, application fraud exploits procedural trust. Financial organisations rely on identity data appearing accurate and consistent across applications. In both cases, the deception succeeds when the individual or financial institution accepts the details at face value.
The transition from emotional to financial fraud
This overlap becomes increasingly prominent when romance scams move beyond conversation to emotionally driven and coerced action. At this point, criminals request financial help or access to accounts or identity details. Financial help is often positioned as temporary or practical support. Requests for identity or account details are framed as a necessary step to move the relationship forward.Criminals’ success rate is increasing rapidly, with TSB’s latest romance fraud report showing that money sent to scammers jumped by 37% in a year, with a 15% increase in case volume. Once a fraudster has your details, they will keep them even after the relationship ends and use them to open new accounts, transfer money and create fraudulent applications....
....MUCH MORE
