The scale of Britain’s fraud problem was laid bare this week, with new figures revealing worryingly high rates of financial crime.
125% Increase in Identify Theft
According to data from Cifas, the UK’s leading fraud prevention service, cases of identity theft reached 175,000 last year — a record high. That is only a marginal increase on 2016, but shows a 125% surge over the past decade.
One in Three People Open to Being “Money Mules”
There has also been a rapid rise in the number of young people laundering illegal money through a legitimate bank account for a small fee — known in the industry as “money mules”.
One in three people say they are open to being a money mule, leading to the 27% increase in the number of 14-24-year-olds taking part in the criminal activity, according to Cifas.
The number of British bank accounts known to be used as mule accounts increased by 11% between 2016 and 2017, Cifas’s report Fraudscape claimed.
Cybercriminals Target Elderly
And more than one-third of bank account “takeover” victims, who unwittingly disclosed their account details to a criminal, were more than 60 years old, suggesting cybercriminals are targeting the elderly.
The report also noted that cybercriminals are targeting new sectors such as telecoms, online retail and insurance, in addition to banking. The fraudsters are shifting towards more accessible products, too — including mobile phone contracts, online shopping accounts and short-term loans.
Mike Haley, deputy chief executive of Cifas, said: “As some targets become harder to crack, criminals turn to what they consider are softer targets.”
Fraud Levels Are ‘Frighteningly High’
Sarah Lewis, head of ID and fraud for the UK at Equifax, said that the level of cybercrime is now “frighteningly high”.
She said: “Fraudsters are always on the move, on the hunt for their next scam, expanding their target pool and focusing on the identities of people young and old.
“Criminal fraud networks can use this information to generate high quality ID data to sell via the dark web, creating more opportunities for unlawful activity.
“People are unaware of the value and opportunity their basic personal details offer to fraudsters. The depth of personal information available on social media gives fraudsters an expanding pool of data they can easily abuse.”
Password Protection no Longer Enough
Lewis said that passwords are no longer enough to protect digital data. “Fraudsters are wise to our thinking when we create a password, making them all too easy to crack,” she said.
“Businesses need to invest in new technology like biometrics and device recognition, creating multiple layers of defense.”
Banks and other sectors have fought back, opening up dating sharing which helped to prevent more than £1.3 billion of fraud losses in 2017.
Haley said: “Fortunately, many of these sectors such as telecoms and insurance, share their fraud data and are detecting more fraud attempts. [But] as fraudsters see their attempts to obtain these products become more difficult, the question will arise about where they will target next.”
Conor Burns, British MP and chair of the all-party parliamentary group on financial crime and scamming, said: “Fraud is the 21st century volume crime and the issue is not going to go away. With more and more people sharing data, transacting, setting up businesses, dating and chatting online, this trend is only going to continue.
“Fraudscape shows how prevalent this crime is and all of us — government, industry, third sector and individuals, have a role and responsibility in preventing it.”