UK financial fraud increases by 40% in 2016

A fishing hook pierces a stack of credit cards
By Alex Burden, Student Blog

9 February 2017

New data from the Office for National Statistics reveals a 40% increase in UK financial fraud from September 2015-2016.

Fraud relating to finances, including card fraud or online scams, is largely unreported by the general public, suggesting that the real figure is far higher than reported.

The potential ‘embarrassment’ from falling victim to a believable scam is believed to be preventing people from coming forward, combined with the fact that banks will not always report the fraud if resolved before any money was taken.

The ONS survey’s coverage was extended in 2016, and Experimental Statistics highlighted 3.6 million fraud and 2 million computer misuse offences.

When Financial Fraud Action’s (FFA) data was taken into account, it revealed 1.9 million cases of card fraud, which is a 39% increase on 2014-2015, when losses reached £775m.

Insufficient intelligence or evidence hindered investigation by the police. Banks request that victims contact Action Fraud to investigate cases, but Action Fraud will only refer to the police where there is the belief of an organised criminal network scamming large sums.

This is helpful for card skimming victims, but of little help to individuals who may give financial details to spoofed websites, for example. 

Most of the transactions we make now are digital and our research suggests more than a quarter of people carry as little as £10 in cash. Jody Baker, comparethemarket.com

The changing face of crime

“When the Crime Survey of England and Wales started, fraud was not considered a significant threat and the internet had yet to be invented, said John Flatley, Crime Statistics and Analysis for ONS. “Today’s figures demonstrate how crime has changed, with fraud now the most commonly experienced offence.”

The FFA reported that a fraud or scam happened every 15 seconds during the first six months of 2016 – a 53% rise on 2015!

A survey of 2,000 adults by comparethemarket.com in September 2016 support the findings, with one in ten stating that they required replacement debit or credit cards after hacks, skimming, cloning and online scams.

“We’re constantly being warned of the dangers of cyber attacks but it is still a shock if it happens to you,” warned Jody Baker, head of money at comparethemarket.com. “Most of the transactions we make now are digital and our research suggests more than a quarter of people carry as little as £10 in cash.

“With so many of us shopping and banking on the internet, combined with a rise in contactless payments, it is more important than ever to be vigilant when managing your money.

“It is a good idea to regularly check your bank statements for any unusual activity, as criminals often make small but regular thefts which are harder to spot than larger one-off purchases.”

Failure by companies to adapt their practices or provide appropriate advice to their customers to help avoid such instances can have severe implications.

Financial fraud in e-commerce

Alasdair Douglas, TPS subject controller, highlights how fraudulent activities related to e-commerce and why companies should adapt their practices for the future: 

"The increase in the volume of spoofing of websites, cyber-attacks and online scams highlights the growing risk to businesses from e-commerce activities, which are commonly a core part of business operations. 

"Business owners and management have to be aware of the threats that such activities pose to their businesses in order to ensure that their operations include suitable controls to attempt to mitigate potential risks.  

"The increased flexibility of payment options such as contactless and fast track payments and the overall decline in face to face transactions increases the opportunity for fraudsters to impersonate both customers and businesses. 

"Failure by companies to adapt their practices or provide appropriate advice to their customers to help avoid such instances can have severe implications, both from a financial and reputational perspective, and consumers expect to see appropriate actions being taken."  

Common e-commerce risks and examples of controls to mitigate such risks are covered within the e-commerce module of the TPS ABS course.

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