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Online fraud continues to grow
 Article 
Author
Martin Shobbrook
Date
13 July 2017

Online fraud continues to grow

Fraud is now the most commonly experienced crime in England and Wales, with the majority of frauds taking place online. This is according to a new report published by the National Audit Office (NAO).

The NAO reports that in the year ending 30 September 2016, fraud accounted for roughly 31% (3.6 million incidents) of all crime in England and Wales. Of these fraud incidents, online fraud accounted for approximately 53% (1.9 million incidents).

Statistics also show that fraud is on the rise. In particular, incidents involving the use of card details obtained fraudulently to make purchases (known as 'card not present' fraud) have increased by 103% since 2011. The NAO goes on to report that the cost of fraud in 2016 is estimated to be around £10 billion for individuals and around £144 billion for the private sector.

The report also highlights a number of deficiencies in the way the government has responded to the issue of fraud. In February 2016, the Home Office launched the Joint Fraud Taskforce to crack down on fraud. The members of the Taskforce consist of key representatives from government, law enforcement and the banking sector.

Mohammed Nazeer, a member of Mishcon de Reya's Fraud Defence Group says:

"The statistics once again show that fraud is a pernicious problem which continues to affect millions of people and businesses. It goes without saying that more must be done to combat it. The Home Office has yet to report on the Joint Fraud Taskforce's progress or establish measures for its performance. In addition, there is no proper mechanism for sharing good practice between members. It would clearly be advantageous for non-banking organisations such as those in retail, telecommunications and the digital sector to also be included in the Taskforce, to widen their knowledge of how specific frauds operate and to share their experience in combatting it. To widen the benefits of the Taskforce, it must also become common place for data to be widely shared on fraud incidents, trends and best practice between the public sector and the private sector. Hopefully at that stage we will start to see a gradual decline in fraud incidents."

Martin Shobbrook, a Partner at Mishcon de Reya says:

"To limit the chances of becoming a victim of this ever-growing form of fraud, keeping a diligent eye on one's own personal accounts is essential but may be practically difficult given the speed with which fraudsters operate in the online arena. Ensuring that current accounts do not hold more than necessary (any surplus being held in a separate savings account) is a good way to hopefully limit one's potential exposure in the event that a fraudster gains access to your current account. If you do become the victim of an online fraud, acting quickly is essential. The perpetrator of any online fraud will look to move the money as far away from the original account he paid it into as quickly as possible. A victim's chances of being able to stop onward movement of his money reduce dramatically the longer it is left before action is taken. In our experience, leaving matters just 24 hours may already be too late. Unfortunately, reporting matters to the police is unlikely to stop the stolen funds from being moved beyond the victim's reach. Instead, urgent action from the victim's own bank is essential and, if taken quickly enough, may result in the victim's bank being able to stop the funds from leaving the first account that the fraudster uses to take the money."