Britain Facing Fraud Epidemic of Epic Proportions

Britain Facing Fraud Epidemic of Epic Proportions

A recent wide-ranging investigation by British newspaper the Daily Mail has revealed that the UK is the global fraud capital. More than 40 million Britains have fallen foul to financial criminal activity, with some other sources branding it as an “epidemic” to the detriment of large swathes of society.

With a total population of just over 67 million, the figures put forward by the daily suggest that almost every adult was targeted by fraudulent behavior in Britain in 2021. The total losses of these incidents total some GBP 3 billion, with higher losses per person than any other western country such as the US, Australia, or Canada. what to say to a scammer to scare them

Not only is the situation currently bad, but it is also getting much worse. Amid rising inflation and the ongoing cost-of-living crunch, criminals seek to exploit even more. In particular, they target more elderly and those who are considered vulnerable. Also, In April 2022 alone, thieves stole some GBP 700 million, over GBP 200 million more than the same month in the previous year.

In addition, the investigation found that only one in seven incidents reported to the police meaning the real figures could be much higher. In fact, the annual cost to the British economy could be more than GBP 137 billion. Even more concerning is the fact that only 1 in 1000 complaints result in a criminal charge, and only 2% of police are dedicated to combatting the issue. This can also equated to one police officer dedicated to fraud for every 2500 scams.

Preventative Measures

As a response to the findings, the paper has called for a raft of stringent measures to tackle the problem; such as appointing a minister for fraud, making tackling fraud a police priority; improving the fraud reporting system, and forcing banks to reimburse all fraud cases and increase protection for customers. They also call for tech giants like Google to be held more accountable for their role in the fraud, including reimbursing fraud victims caught on their platforms with fines being levied against those who do not manage to prevent it.

Nonetheless, it is not just up to tech companies to work on fraud analytics and roll out measures to prevent fraud. Across multiple industries, measures are in place to prevent various kinds of fraud, such as AML fraud; which is where money is illegally laundered through your products or services as criminal circumvent measures; or other kinds such as identity theft, account takeovers, and credit card fraud. As all kinds of fraud are on the rise, it is important to understand the different types; as well as what warning signs are worth looking out for.

AML Fraud

Money laundering is a big issue, particularly due to the increase of people using the internet to buy; sell, shop, trade, and conduct a variety of financial transactions. In short, money laundering is where funds derived from illicit activities such as drug and human trafficking, corruption; and organized crime are filtered through legitimate services to clean them; and introduce them into the banking system without arousing suspicion.

All companies dealing with money are required to follow AML compliance measures designed to stop their businesses from being used for this purpose. However, AML fraud is where nefarious actors find ways to bypass these measures and controls; and achieve their goal of successfully laundering the money without detection. These can include using fake and stolen IDs or even synthetic IDs that are used in conjunction with accurate data; for example, that of children.

Statistics show that at least GBP 88 billion is laundered through the UK every year; out of GBP 1.8 billion globally. Significant amounts laundered through gambling sites, online trading, retail, and payments; meaning all industries need to be on the alert for anti-money laundering fraud.

Identity Fraud

Identity theft is a form of fraud that is also on the rise, both in the UK and further afield. In 2021, there almost a quarter of a million reported incidents of identity fraud throughout the country, mostly targeting older adults. The problem is that many people might be unaware their identities have been stolen and are at risk of fraud. Typically, criminals will buy credentials such as IDs and personal data on the internet and use them to take out loans; run up credit card debts, and carry out other activities to the victim’s detriment.

Often, victims do not even know they have experienced a security breach until it is too late and they notice an issue with their credit score or get a court summons. It can be very challenging for victims to prove it was not them who carried out the actions; and this can lead to long resolution times causing significant inconvenience.

Account Takeover Fraud

While account takeover fraud is technically a form of identity fraud; it has some key differences and thus, should be addressed in its own right. Account takeover fraud occurs when an individual has their account accessed without permission by a criminal. This criminal then proceeds to undertake a series of minor changes; such as changing the account email, then the password; in order to gain complete control of the account and lock out the original user. They would then proceed to use the account for illegal activities- anything from money laundering to the theft of funds.

According to Action Fraud, in 2021, account takeover fraud was the leading online fraud in the UK. It also impacted almost 90% of financial services firms in the same year, and numbers are increasing, according to KPMG.

Overall, the UK is facing an “epidemic” of fraud and it is up to companies to do more to protect themselves and their customers. Of course, there are steps customers should also take to help themselves, including being aware of warning signs; tightening their own security, and being careful when choosing passwords and logging out of accounts. There is a long way to go in fighting this issue; and it will take time but steps such as those proposed by the Daily Mail; along with solutions provided by other stakeholders will all have an impact.

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