Combating Fraud in 2023: Strategies for UK Businesses and Individuals
For many years, fraud offences have been the most prevalent crime in England and Wales. 2023 is no different, with a significant rise in fraud cases over the first half of the year. Fraud doesn’t just impact the economy to the tune of millions of pounds each year, it also causes significant emotional distress for victims.
According to UK Finance's "Half Year Fraud Update 2023", fraudsters stole over £580 million across 1.4 million incidents. Incredibly, this is equivalent to one fraud case every 12 seconds.
This surge is particularly concerning given the sophisticated nature of these frauds, ranging from authorised push payment (APP) scams to intricate investment and purchase scams. APP scams alone accounted for £293.3 million.
The Impact of Fraud
The financial impact of fraud in the UK is colossal. In the financial year 2021/22, businesses and individuals lost £2.46 billion to fraud, a 17% increase from the previous year. Unfortunately, this is a trend that doesn’t seem to be slowing.
The digital era has significantly amplified the reach and complexity of fraud. Data breaches have become a major enabler, allowing criminals to access personal and financial data for fraudulent activities.
While we’ve become very comfortable in online spaces, the global nature of the internet means you can be vulnerable from international threats. An estimated three-quarters of UK-targeted fraud originates overseas. These figures demonstrate why caution is required at all times.
Prevention and Protection Strategies
Fraud poses a major risk to employers. Not only could you be impacted financially, if your data becomes compromised, there could be reputational damage, or worse, you could be held to ransom by criminals.
Awareness and preventive education are key in mitigating fraud risks. Initiatives like Take Five and Cyber Aware provide invaluable advice on recognizing and avoiding fraudulent schemes.
Below we’ve shared our top ten tips for employers to bear in mind when trying to prevent fraud:
Stay Informed About Common Scams: Regularly update employees on the latest scam tactics. This can be done through newsletters, meetings, or training sessions.
Recognize Red Flags: Teach employees to identify suspicious behaviors, such as unsolicited requests for sensitive information, high-pressure tactics, or offers that seem too good to be true.
Safeguard Personal Data: Encourage employees to keep their personal and financial information secure. Remind them not to share sensitive details over unsecured channels.
Use Strong, Unique Passwords: Promote the use of complex passwords and consider implementing a password management tool for company systems.
Double-Check Requests for Money Transfers: If an email request for a transfer seems unusual, confirm it by calling the requester on a known number.
Scrutinize Email Addresses and Links: Train employees to examine emails carefully for signs of phishing, such as misspelled domain names or uncharacteristic language.
Encourage Reporting of Scams: Create an environment where employees feel comfortable reporting attempted scams without fear of judgment or reprisal.
Share Experiences: Encourage staff to share their experiences with scams, both successful and unsuccessful, as learning tools for others.
Create Verification Protocols: Establish clear procedures for verifying the legitimacy of requests involving sensitive information or financial transactions.
Train on Verification Techniques: Provide training on how to verify identities and requests, such as using established contact information to confirm requests.
Government and Industry Response
In response to this escalating threat, the UK government and financial institutions have undertaken legal measures. The Online Fraud Charter and the Online Safety Act 2023 represent landmark steps in the fight against online fraud. Financial institutions have successfully employed advanced security systems, preventing a potential loss of £651 million. This collaborative approach across various sectors is crucial in countering the multifaceted nature of fraud.
The rise in fraud directly correlates with society’s digitization. While digital and web-based tools are indispensable in the modern age, everyone needs to be aware of the risks, how to safeguard themselves and not fall victim to frauds. Unfortunately, due to the huge digital skills shortage in the UK, many working age adults do not have the proper education on how to handle these risks.
For businesses, empowering your employees with knowledge and tools to recognize and respond to fraud attempts, can not only help protect your assets but also contribute to a broader societal effort against this ever-evolving threat.