The fraud prevention organisation, Cifas, which was set up with the aim of combatting fraud has published a report providing analysis of key fraud trends in the UK.
Fraud and cybercrime now rival car crime, robbery and burglary as the high volume crime of the twenty first century, with official UK government statistics recording almost one in every two crimes as a fraud or cybercrime. Of particular note:
- Identity Fraud cases have reached their highest levels with almost 173,000 cases being reported (accounting for over 53% of all fraud cases in 2016).
- Facility takeover fraud (where a fraudster gains access to the accounts of victims via abuse of their personal data for their own personal gain) has increased by 45% to up to over 22,500 cases. Over 50% of cases involving account takeovers were committed over the telephone, with a particular trend emerging involving the targeting by fraudsters of mobile phone accounts (typically to call centre staff) in order to obtain upgrades.
- There has been a continued increase in 'Mule' activity whereby accounts are being opened to facilitate the laundering of criminal proceeds and involve genuine account holders being implicated in the transfer of funds obtained illegally - often as a result of scamming members of the public into transferring their own money over to fraudsters.
- Dishonest actions by staff to obtain a benefit by theft or deception i.e. stealing a customer's cash (accounting for 22 % of cases of these kind) and/or the manipulation of third party accounts whereby an employee abuses their position in order to remove charges or change limits on accounts on behalf of friends and family (accounting for just under 19% of dishonest actions in 2016), are now the most common types of 'Insider fraud'.
Sara Manchanda, an Associate in Mishcon de Reya LLP's Fraud Defence team says:
"There is an increasing need for companies and organisations to be proactive in implementing protective measures to ensure that they are best prepared to prevent, detect and react to fraud. As highlighted in the Cifas report, a key strategy for companies to combat their exposure must involve educating and training their staff, who are uniquely placed to scrutinise the activities of customers, suppliers and, indeed, their colleagues, to increase awareness across the organisation. Individuals and businesses alike should undertake risk assessments of their practices and procedures to ensure a fraud response plan is in place.
"Taking facility takeover fraud as an example, companies should ensure that any requests or instructions received from customers are followed up separately with a call to the designated contact to ascertain whether the request is genuine. Robust security checks to verify a customer's details and training staff to ask the right questions coupled with more generally keeping abreast of trends in the fraud culture should be at the forefront of priorities on both an individual and broader organisational level.
"In this climate, it is clear that having the right internal controls in place is vital to ensure that organisations are able to protect themselves from fraud and data breaches of this sort, and the financial and reputational risks they carry with them."