In November last year, Cifas’ Fraudscape report revealed that the UK was likely heading into 2023 with unprecedented levels of fraud. The report highlighted that in the first 3 quarters of 2022, over 309,000 cases were recorded to the National Fraud Database, a 17% rise compared to last year and an 11% increase on pre-pandemic levels.
This year has already seen the news agenda paying close attention to fraud with the Crimestoppers Covid hotline shutting down; news of multi-million-pound crypto scams occurring and the Government confirming its intention to put forward a failure to prevent fraud offence as part of the Economic Crime and Corporate Transparency Bill.
With the current economic uncertainty and cost of living crisis making people and businesses more financially vulnerable, it’s incredibly likely we’ll see fraudsters taking advantage.
In light of this, we’ve put together a list of some of the top fraud trends to be aware of this year.
Fraud trends to watch in 2023
According to Nationwide Building Society, more than two thirds of people in the UK are worried about having their identity stolen and 17% have fallen victim. The same survey demonstrates that criminals carry out a number of fraudulent activities with stolen identities, including ordering goods in the victim’s name, accessing or stealing from bank accounts, or borrowing money via credit cards or personal bank loans.
Egress’ 2022 report, Fighting Phishing: The IT Leader’s View, found that 44% of organisations were tricked into making fraudulent payments due to invoice fraud during a 12 month period. Invoice scams typically occur when account details on an invoice are changed, or emails are intercepted, so the money is wrongly paid into a scammer’s account, according to Barclays.
According to Ravelin, online payment fraud costs global businesses 1.8% of revenue. The company states that online payments are a prime target for fraudsters as they don’t need to have the real card, they only need the card details which are typically stored digitally on browsers. With the number of people shopping online nowadays ever-growing, it’s only inevitable that this kind of fraud will follow the same trend.
APP, or authorised push payment fraud, happens when a person or business is tricked into sending money to a fraudster posing as a genuine payee. According to a report by ACI Worldwide and Global Data, losses to APP fraud will double across the UK, India, and the US in the coming years, hitting £4.44bn by 2026. What’s more, a recent change from the Lending Standards Board to its Contingent Reimbursement Model (CRM) Code to stamp out APP scams, shows how seriously industry bodies are taking this type of fraud.
According to UK Finance, the advanced security systems used by banks prevented just under £584 million from being stolen in the first half of 2022. Although this shows a positive step in fraud prevention, in the 2022 Business Payments Barometer, 29% of companies interviewed stated that they were victims of fraud. Coupled with the trends outlined in this piece, this shows that the demand and need for fraud prevention and detection solutions is still high.
Luckily, the fraud prevention and detection market includes a range of solutions suited to different types of businesses depending on the industry they belong to and the type of fraud they’re most commonly targeted by. This comprises solutions such as:
- AI/machine learning-driven fraud detection platforms
- Anti-money laundering solutions
- Those helping with KYC compliance, ID verification and frictionless onboarding
Although some are still sceptical about the use of AI or machine learning, a use case where the technologies are really showing their use is fighting fraud. Whether it’s for detecting fraudsters calling into contact centres, flagging illegitimate mobile payments or preventing account takeover, companies like Cybertonica, Veriff, Smart Numbers, and many others, are channelling the power of the technology to protect businesses and consumers alike.
Rebuilding trust and reputation
Although we’re seeing positive steps being taken in the fraud prevention and detection market, the trends mentioned show that businesses and consumers alike still have a lot to combat and be aware of. As such, the likelihood of both parties falling victim to fraud is still high.
For consumers, falling victim to fraud usually means an immediate loss of money, a call to their bank and days of attempting to recuperate the funds. For businesses, the same happens, however, fraud can also have wider business and reputational impacts.
This is where having a reputation management team on hand is invaluable. Having a group of experts to bring in an objective, third-party view, provide support with messaging to customers and other external or internal stakeholders, as well as advise on how to respond to journalists or communicate on social media, can be the difference between a well-handled response to fraud or a full-blown PR crisis.
If you’re a technology company with a solution that can solve any of the trends discussed in this blog but need help in getting your name out there and reaching your key audiences, don’t hesitate to contact our team of expert Tech PR consultants, we’d be happy to discuss how we could help.