Why is fraud running rampant in our modern society?

Looking at the latest annual fraud report by UK Finance, it is clear that fraud continues to be a major issue in our society. Despite efforts by law enforcement and other organizations to crack down on this crime, it seems that there are still many victims of fraud each year.

At the core of this issue is a fundamental problem – the fact that people are seemingly willing to commit fraud because they see it as an easy way to get ahead. This is particularly troubling, as fraud victims are often left feeling angry, frustrated, and violated.

That said, there is still much work to be done in the fight against fraud. Law enforcement and other organizations must continue to develop new strategies and techniques for detecting and preventing fraud, while also working to raise awareness about this issue among the public.

Only by taking a comprehensive, multi-pronged approach can we truly hope to combat the damaging effects of fraud in our society.

Latest findings from the 2021 Annual Fraud Report (FSA)

The Financial Services Authority (FSA) has found that banks and card companies prevented £1 billion in unauthorised fraud last year alone! They are also reporting an alarming rise of push payment scams where people's cards being accessed without permission or knowledge.

The number of people affected by financial fraud in the UK has decreased over last year, with banks and cards companies preventing £1.4 billion worth or 71 pence out every pound lost to authorized push payments on credit card accounts that were scams attempts--this is an increase from 2020's figures where they prevented 60%.

But how is this happening?

Criminals are constantly adapting the methods they use to try and trick consumers into handing over account details.

They typically employ a range of techniques, like having you enter your login information for an online banking website one time code (OTP) or log-in page before asking if they can follow any links in order access more sensitive data on their victims' accounts.

There are also as requests made via social media platforms where a conversation seems legitimate, but then turns out that the person you are chatting with is not the owner of their account.

This happens when the user's computer becomes infected with malware after clicking through friend request messages without realizing what has happened.

Without a doubt, modern technologies facilitate scams.

It's no secret that we've become increasingly reliant on the internet over the last year. With more of us working from home, spending longer online, and doing more internet shopping, criminals have been able to take advantage and target people directly in their homes across different online platforms. This is likely to have made people more susceptible to these scams, as they seem more personal. 

There has also been a spike in money mule activity, investment, delivery and purchase scams over the last year. 

Smishing and phishing fraud take advantage of people’s vulnerability while at home and needing to access new or unfamiliar online services rather than doing it in person. While customers of all age groups are falling victim to these scams, it is younger age groups that are often the prime target. 

These types of scams can be very costly and cause a lot of stress, so it's important to be aware of them and know how to protect yourself. If you think you've been a victim of fraud, report it to Action Fraud as soon as possible.

But who are the fraudsters actually targeting?

Anyone can become a victim of social engineering. It's a sad reality that we live in an era where people are targeted for impersonation scams. One type of this, the romance scam is especially pernicious because it can lead to emotional victims and even complete fantastical stories about how someone found you online or on social media - which could then result them sending money orders or wires based off these lies!

However, the most common victims of fraudsters are people who are socially isolated, older and considered vulnerable. Many of these people may not even realize that they've been a victim until it's too late and their savings have been drained or their credit has been ruined.

We must recognize the damage that fraud causes to our society, both financially and emotionally.

As technology continues to evolve, so do the methods used by fraudsters to trick people into giving their personal and financial information away.

But with increased awareness about the dangers of these scams, we can work together to fight back against this growing problem and help keep our communities safe.

But are our governments doin

g enough to tackle this pandemic of scam calls, personal data leaks and impersonation fraud?

Or do we need to take more responsibility ourselves and be vigilant online at all times?

The answer is a complicated one. Looking at the statistics from the annual fraud report, the banking industry has made significant progress in combating fraud in recent years.

The new data from UK Finance shows that this trend continued in 2021. A total of £1.4 billion of unauthorised fraud was prevented during the year, equivalent to 65.3p in every £1 of attempted unauthorised fraud being stopped.

This is a significant improvement on the £1 billion of fraud that was prevented in 2020, and it means that more than two-thirds of all attempted fraud is now being thwarted!

There are a number of reasons for this improvement, including better use of technology to detect and prevent fraudulent activity. banks are also working closely with law enforcement agencies to share information and target offenders.

However, there is still more that can be done to protect customers from fraud, and UK Finance is urging customers to remain vigilant and report any suspicious activity to their bank or card issuer. If we all work together, we can continue to make progress in the fight against fraud.

OK, So the banks are trying to reduce the numbers of annual fraud, but what about our UK government?

Economic crime is a complex and ever-evolving challenge that requires a coordinated response from both the public and private sectors.

The UK government and financial services industry are therefore working together on a new Economic Crime Plan and Ten Year Fraud Strategy.

The Economic Crime and Corporate Transparency Bill, announced in the Queen’s Speech in May 2022, will provide a framework for all sectors to work together more effectively.

This is a vital step in the fight against economic crime, and one that we are confident will make the UK a leader in this global effort.

The good news is, banks and UK government share their intelligence.

In 2021, the UK banking and finance industry proposed new powers on information and intelligence sharing in order to better protect customers from emerging threats, data breaches, and compromised card details.

The Intelligence and Information Unit (I&I Unit) is responsible for receiving and disseminating intelligence across the industry in order to enable card issuers to take the necessary precautions to protect their customers.

In 2021, the Unit received 1.6 million compromised card numbers from law enforcement sources and disseminated this information to enable card issuers to take the appropriate measures to protect their customers. The industry has proposed new powers on information and intelligence sharing in order to better protect customers from these threats.

These proposed powers would allow the I&I Unit to share information more broadly and quickly with stakeholders across the industry, enabling them to take the necessary precautions to protect their customers.

In 2021, the DCPCU prevented a record £101 million from being stolen in the UK, the highest amount in the unit’s 20-year history.

The DCPCU is a specialist police unit that tackles the organised criminal groups responsible for financial fraud and scams. In 2021, the DCPCU arrested 123 suspected fraudsters and secured 83 convictions.

The DCPCU works tirelessly to protect people in the UK from financial fraud and scams, and their efforts have prevented £101 million from being stolen in 2021. This is a record amount for the DCPCU, and their work is vital to protecting people in the UK from financial harm.

Furthermore, both the government and UK banks are working with OFCOM!

Who are OFCOM and why are they important to prevent fraud?

Ofcom is the independent regulator and competition authority for the UK communications industries. One of their main responsibilities is to protect consumers from being misled or otherwise harmed by unfair or illegal practices.

In recent years, there has been a growing problem of criminals using "spoofed" phone numbers to trick people into thinking they are calling a trusted organisation such as their bank or the police. This is known as "number spoofing".

To crack down on this problem, Ofcom has been working with the phone industry to develop and enhance the "do not originate" list. This is a database of phone numbers that are not allowed to be used for spoofing.

As a result of this work, there have been significant successes in preventing criminals from spoofing the numbers of trusted organisations. This work is ongoing, and Ofcom will continue to work with the industry to crack down on this problem and prevent further fraud losses.

What about fraudulent conduct that is committed by scammers outside of the UK?

While the government and UK banks are working hard to prevent fraud within the UK, there is also important work being done to combat fraudulent conduct that is committed by scammers outside of our borders.

The National Economic Crime Centre (NECC)was established in July 2019 as a joint venture between the Home Office and the National Crime Agency (NCA).

The NECC is the UK's lead organisation for coordinating cross-border efforts to tackle economic crime. It works closely with international partners and law enforcement agencies around the world to prevent scams, detect and disrupt criminal networks, and bring those responsible for fraud to justice.

In 2021, the NECC has made significant progress in its efforts to combat fraud committed by scammers outside of the UK, including launching new initiatives to improve intelligence sharing and bolster cross-border investigations.

Through these efforts, we can be confident that people in the UK are better protected from financial harm no matter where it is committed. Ultimately, working together is our best defence against financial fraud, and professional organisations will continue to do everything they can to prevent reported fraudulent scam businesses from operating in the UK.

What happens to fraudsters that commit fraud?

If a person is found to have committed fraud, they will face serious consequences. Depending on the severity of the offense, fraudsters can be prosecuted and fined or even sent to prison.

In addition, those who are caught engaging in fraudulent activities may also have their assets frozen or seized and be ordered by the court to pay restitution to the victims of their crimes.

To prevent further financial harm, it is crucial that we take a zero-tolerance approach to fraud in all its forms and work together to protect people from being victimized by criminal scammers. By continuing to increase awareness, develop new protections, and strengthen our responses to fraudulent activities, we can create a safer and more secure financial landscape for all of us.

What can you do to help fight fraud?

There are several things you can do to help fight fraud and protect yourself from becoming a victim.

The first is to be aware of the common warning signs that may indicate that you are dealing with a fraudulent business or person. Some red flags to watch out for include pressure to make quick decisions, requests for personal information or financial details, and overly aggressive or pushy behaviour.

You can also take steps to secure your personal information online, such as using strong passwords on all of your accounts and avoiding giving out sensitive data over unsecured networks or public Wi-Fi.

In addition, you should always be vigilant about checking your bank statements for any suspicious activity, and you should also report any suspected fraud to your financial institution or the authorities as soon as possible.

Spread the word and inform your family, friends and acquittances

New scams are continuously on the rise. By raising awareness about the various tactics scammers use and taking steps to protect yourself online, you can help reduce the risk of fraud and prevent people from being harmed financially, loosing access to their bank accounts, and reduce the impact that fraudulent activities have on our day to day lives.

So, the next time you come across a questionable offer or suspicious activity online, take a moment to pause and trust your instincts. And if you have any concerns about fraud or cybercrime, share them with others and work together to help keep our financial landscape safe for us all.

Together, we can fight fraud and stop scammers in their tracks. Let's work together to protect ourselves and our communities from financial harm.

Summary

Fraud is a serious issue that affects millions of people each year. To prevent scams, detect criminal networks, and bring those responsible for fraud to justice, the NECC is working to strengthen its efforts and protect people from financial harm.

This includes taking a zero-tolerance approach to fraud, ensuring secure online data, and raising awareness about common warning signs and best practices for protecting yourself from scams.

So let's join together in the fight against fraud and protect ourselves, our families, and our communities from harm.